Last night most risk markets shrugged off the attack on the US Federal Reserve’s independence by the Trump regime with a small blip against USD while Wall Street eked out a small return as European stocks outperformed again. Precious metal prices continued to soar against USD however, while oil markets also saw more upside on the Iranian revolts. Despite a small reprieve Euro remains under a lot of pressure while the Australian dollar remains just below the 67 cent level.
Looking at stock markets from Asia from yesterday’s session, where mainland Chinese share markets did quite well in the afternoon session with the Shanghai Composite up more than 1% to 4159 points while the Hang Seng Index made a similar move, lifting 1.4% higher to extend well above the 26000 point level.
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 does not have a lot of momentum:
Japanese stock markets were closed for the first of seemingly 100 holidays for the year with Nikkei 225 futures indicating
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 although it has gotten ahead of itself. This looks like a launch point through longer term overhead resistance:
Australian stocks finally put some runs on the board as the ASX200 closed nearly 0.5% higher at 8759 points. SPI futures are up nearly 0.4% with a good showing on Wall Street overnight moving things higher again today despite the higher Australian dollar.
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 still possible:
European markets were the standout on Friday night and managed to push up further overnight across most of the continent as the Eurostoxx 50 Index closed 0.3% higher at 6016 points, reinforcing the recent rally.
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 managed to move slightly higher across the board with the NASDAQ lifting nearly 0.3% while the S&P500 gained just 0.2% to close at 6977 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 have failed to reverse their move against King Dollar as the December NFP print came to pass on Friday, without the anticipated Supreme Court ruling on tariffs but are now pivoting on the attack on the Fed by the Trump regime. The USD reversed course briefly overnight with Euro coming back alongside other majors but it too remains under threat with a late rollover sending it back below the 1.17 handle.
The union currency had already been pushed down to the 1.17 handle during the Xmas period and after a small bounceback put on a dead cat bounce here as the end of NATO looms on the horizon. Watch for a break below the recent lows at the 1.16 level next:
The USDJPY pair pushed well above the 157 handle on the new year sessions, gave it all back and then accelerated higher again despite stronger inflation in Japan with a move towards the 158 level on Friday night with a long weekend providing minimal volumes 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. This is now slightly overbought but has more upside potential:
The Australian dollar was weakening throughout the pre NY period but weakened slightly down to the 67 handle on the NFP print on Friday night before a small bounce like all the other undollars on the Powell putdown.
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 short term support is barely shoring up again so I don’t see a lot of upside here:
Oil markets have been on a multi week/monthly downtrend prior to the Venezuelan invasion with not much upside thereafter, but things are brewing as Brent crude shot up above the $62USD per barrel mid last week and have made a new monthly high above the $64 level overnight.
The daily chart pattern shows an extended downtrend that is now well under threat and broken in the short term so watch for this to potentially turn into a proper reversal:
Gold has made a serious comeback on USD volatility with a continued breakout above the $4500USD per ounce level on Friday night as it approached the $4600 level overnight on the Powell putdown.
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!