Green across the Atlantic share markets overnight with lower than expected inflation numbers in Europe helping buoy stocks while rumbles of more “acquistions” by the Trumpian Empire – Greenland next – kept Wall Street lifting higher. The USD strengthened against most of the majors, particularly Canada as their oil stocks took a small hit on the Venezuelan invasion, while the Australian dollar was the standout as it made another new monthly high above the 67 cent level. Oil prices fell back to their pre-weekend position while bond markets are still seeing some bids although US 10 year Treasury yields remain elevated at their recent monthly highs.
Looking at stock markets from Asia from yesterday’s session, where mainland Chinese share markets are seeing more bidding with the Shanghai Composite up more than 1% to climb well above 4000 points while the Hang Seng Index has finally caught up, surging more than 1.6% higher to 26815 points.
The daily chart of the Hang Seng Index showed a lot of wish washy action around the 26000 point level in the last couple of months with some recent weakness now turning into strength. The latest small bounce off support did not have a lot of momentum but there is potential to get moving up above that level again:
Japanese stock markets are also blasting off into the stratosphere with the Nikkei 225 gaining another 1% to climb above 52000 points.
Daily price action wavered a little during the BOJ hike in the previous weeks but has firmed up strongly with the 50000 point level forming key support to make a new year rally stick here:
Australian stocks fell back unlike the rest of Asia with the ASX200 falling 0.4% to 8690 points. SPI futures are up nearly 0.5% on another strong session from Wall Street overnight but remains to be seen if this can be translated to gains as the Australian dollar firms.
The daily chart pattern shows that short term support has been reinforced after a period of hesitation before Christmas with a bounceback above resistance at the 8800 point area possible – watch the outcome on today’s release of the November CPI print as a possible catalyst:
European markets were positive in the end on the release of local inflation figures but only just with the German DAX unchanged while the Eurostoxx 50 Index gained 0.6% to close at 5931 points, extending the recent rally high.
The market had been failing to make headway in recent months due to the too high valuations but short term support was very solid and has pushed well above recent highs to start 2026 with some gusto as a new breakout accelerates:
Wall Street also moved higher across the board with the NASDAQ gaining 0.7% to climb back towards its recent highs while the S&P500 lifted the same to close at 6945 points.
The daily chart showed a belated Santa rally that took back some of the gains to match the November highs but it still looking well supported on the four hourly chart below with the potential to lift up towards the 7000 point level next:
Currency markets were in a holding pattern due to the looming break over the New Year but are now trying to move against King Dollar again despite the recent volatility around the BOJ rate hike and the imperial volatilty from the Trump regime as it scoops up its “own” hemisphere. Euro was on the backfoot again overnight falling below the 1.17 handle following Pound Sterling retracing mildly while the Canadian Loonie also fell back.
The union currency was pushed down to the 1.17 handle during the Xmas period and after a small bounceback is playing like a dead cat bounce here as the end of NATO looms on the horizon. Watch for a break below the recent lows:
The USDJPY pair pushed well above the 157 handle on the new year sessions but since gave it all back and remains somewhat in the doldrums overnight.
The previous price action was sending the pair beyond the March highs and had the potential to extend those gains through to start of year position at the 158 handle. Watch for any break below the 156 handle closely next:
The Australian dollar was weakening throughout the pre NY period but found support at the mid 66 level where it has broken out on commodity prices again but contrary to the Canadian Loonie correlation, now extending above the 67 handle overnight.
Price action was not looking good for the Pacific Peso in the medium term as the interest rate differential squeeze sent it back to the doldrums, but this has inverted as the RBA moves to a much hawkish position. A new monthly high as we head into the new year which could be reinforced by today’s November inflation print:
Oil markets have been on a multi week/monthly downtrend prior to all the Venezuelan invasion with Brent crude and a potential rally was brewing but reality – that it will take months or years to actually physically change the output of heavy crude – is setting in, as it fell back to $60USD per barrel again overnight.
The daily chart pattern shows an extended downtrend that is coming under threat but this really just getting back to the trendline proper and not yet a breakout:
Gold had been using the $4300USD per ounce level as strong support throughout the NY/Xmas period and has made a comeback on USD weakness with a continued surge that almost saw it breach the $4500USD per ounce level overnight.
As I previously mentioned that after some stability, another large upside potential move was looming again for the shiny metal as the desire for USD dwindles and here we are, albeit very overbought as short term resistance forms slightly:
Glossary of Acronyms and Technical Analysis Terms:
ATR: Average True Range – measures the degree of price volatility averaged over a time period
ATR Support/Resistance: a ratcheting mechanism that follows price below/above a trend, that if breached shows above average volatility
CCI: Commodity Channel Index: a momentum reading that calculates current price away from the statistical mean or “typical” price to indicate overbought (far above the mean) or oversold (far below the mean)
Low/High Moving Average: rolling mean of prices in this case, the low and high for the day/hour which creates a band around the actual price movement
FOMC: Federal Open Market Committee, monthly meeting of Federal Reserve regarding monetary policy (setting interest rates)
DOE: US Department of Energy
Uncle Point: or stop loss point, a level at which you’ve clearly been wrong on your position, so cry uncle and get out/wrong on your position, so cry uncle and get out!