Macro Morning (volatility rules)

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by Chris Becker

A wild night on markets with oil falling again before spiking, while US stocks followed the positive move in Europe before volatility returned with vengeance and plunged most bourses into the red.

SP500 had a massive 3.5% range, surging 20 points on the open and then losing 50, as oil price volatility played its part. The four hour chart shows significant selling pressure overhead with downside at 2000 points still on target, and then perhaps a capitulation below:
Chart SP500, H4, 2015.01.13 21:42 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

The DAX was up 1.6%, reflective of most European bourses, before it was pushed down in post close futures trading but has managed to breakout above its previous high and still remains on trend:

Chart DAX30, H4, 2015.01.13 21:44 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

SPI futures are pointing to a 30 point slump on the open of the ASX200 this morning and I expect further volatility in iron ore stocks, alongside energy again.

In currency land, the US Dollar Index (DXY) ticked up as it continues to surge:
dxy

Yen is strengthening as Abe’s third arrow takes hold, although Kyle Bass is still pushing for a move up 140 Yen against USD. The 117 handle will be under pressure soon:
Chart USDJPY, H4, 2015.01.13 21:56 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

Euro felt the strength of USD but so far no breakdown through terminal support, again we wait for the ECB:
Chart EURUSD, H4, 2015.01.13 21:57 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

Cable was volatile on the lower timeframes overnight, mainly on the back of the CPI release but is still hovering around 1.5150 point of control with no signs of a breakout.

After Monday’s surge, Aussie actually eschewed the volatility of the night, placing itself around the 81.50 level, probably on market positioning before the all important unemployment release tomorrow:

Chart AUDUSD, H1, 2015.01.13 21:59 UTC, VantageFX Pty Ltd., MetaTrader 4, Real
Gold fell slightly and for mind looks overbought here on its four hourly uptrend, but this could just be a small distribution before the next upleg:
Chart XAUUSD, H4, 2015.01.13 22:01 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

As silver is up 3% overnight with a potential breakout here on the daily charts if it can close above its previous highs in early December 2014:
Chart XAGUSD, D1, 2015.01.13 22:03 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

With the other breakout of the night being WTI crude, at least on the hourly charts. Dipping down below the 45 handle, WTI leaped  up and could move higher from here, but this could just be a short exhaustion rally, so caution!
Chart CL-OIL, H1, 2015.01.13 22:03 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

Data today is very light in Asia and indeed Europe with all eyes on the advanced retail sales for December print later tonight.

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