Investing.com - Financial Markets Worldwide
Get 40% Off
Get 40% Off
🤯 Perficient is up a mind-blowing 53%. Our ProPicks AI saw the buying opportunity in March.Read full update

Market Brief: Volatilty Remains Calm As Tensions Recede

ByCity Index
AuthorMatt Simpson
Published 01/09/2020, 12:44 AM
Fx-Daily % Candles

FX Brief:

  • Both U.S. and Iran continued to signal their desire to avoid further conflict.

  • China’s inflation steadies at 4.5% YoY and, whilst still relatively high, is not feared high enough to stave off further stimulus from PBOC. Producer prices fell for a fifth consecutive month, although at a slower pace.

  • The lack of geopolitical tensions or economic data made for a session of tight ranges. GBP and AUD are the strongest majors, JPY and CHF are the weakest.

    • Price Action:

  • DXY trades just off of yesterday’s highs after it broke above 97.11 resistance. However, its found resistance at the September trendline (which broke in December) so upside may be limited over the near-term.

  • USD/JPY is considering a break of yesterday’s high. Near-term bias remains bullish above 108.86.

  • USD/CAD closed back above the 2019 low to suggest a correction is underway. However, keep an eye on the bearish trendline on the 4-hour chart which could aid as a bullish target or area for bears to fade into.

  • Gold remains anchored to the September 2019 high around 1557. Given the elongated, bearish hammer (also and outside and engulfing candle) and its failure to break 1600, it’s likely this could be the beginning of a retracement from its highs.

  • NZD pairs are carving out a base and currently consolidating in tight ranges after printing a series of large hammers or doji’s yesterday. The bias remains bullish whilst they hold above their respective lows.
    • 3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .
    Stock Indices

    Equities Brief:

  • Most Asian stock markets have recovered all their respective earlier losses inflicted by the U.S-Iran tensions that blew up on last Fri, 03 Jan. Right now, the leaders of both sides have acted in “good faith” to restrain further physical retaliation moves after yesterday’s Iran missile strikes on U.S. military bases in Iraq.

  • China’s Production Price Index (PPI) for Dec has declined slightly below expectation (-0.5% y/y versus -0.4% y/y consensus where previous data stood at -1.4% y/y). The pace of contraction has continued to subside since Oct 2019 where the risk of deflation recedes.

  • On the other hand, China’s inflation rate has continued to stay at a 8-year high where the Consumer Price Index (CPI) recorded a rise of 4.5% y/y in Dec (slightly below consensus forecast of 4.7% y/y) on the backdrop of rising pork prices due to the prolonged African swing fever epidemic.

  • Muted performance in the Singapore stock market where the benchmark Straits Times Index stood almost unchanged; Huge gains of almost 2% seen in Singapore Exchange and CapitaLand Commercial Trust have been offset by losses in Comfortdelgro and UOL; -1.30% and -1.19% respectively.

    • Price Action (derived from CFD indices):

  • U.S. S&P 500: Another attempt to retest the current all-time high area of 3263/67 in today’s Asian session. No clear signs of bullish exhaustion at this juncture with a further potential to see another push up to target the 3280 key medium-term pivotal resistance; short-term key support at 3242 (former minor descending trendline from 03 Jan 2020 high that has been taken out yesterday after U.S. President Trump’s official address on Iran’s retaliation missile strikes & 23.6% Fibonacci retracement of yesterday’s push up from 3181 low to 3267 high).
    • 3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

  • Japan 225: Short-term/4-hour Stochastic oscillator has reached an extreme overbought level with price action now below 23770 (former swing low areas of 20/26 Dec 2019 that saw an upside price rejection on 03 Jan 2020). Watch the 23480 key short-term support (former minor descending channel resistance from 27 Dec 2019 high & ascending trendline). An hourly close below 23480 negates the bullish tone for a slide back to retest 23040/23000.

  • Hong Kong 50: Short-term/4-hour Stochastic oscillator has reached an extreme overbought level with price action now at the recent intermediate swing high areas of 03/07 Jan 2020 acting as resistance at 28470. An hourly close below 28100 negates the bearish tone to retest yesterday low of 27825.

  • Australia 200: Current push up has seen rejection again at the 6880/90 (current all-time high area) for the 4th time with a bearish divergence signal seen in the short-term/hourly RSI oscillator. A break below 6820 may see a push down to retest the minor ascending trendline from 02 Jan 2020 low now acting as a support at 6760.

  • Germany 30: Pushed up to retest the 13450 medium-term range resistance in place since 13 Dec 2019 with an extreme overbought reading seen in the 4-hour Stochastic oscillator. Watch the 13275 near-term support and an hourly close below it may see a slide towards the 12950/900 medium-term range support.
    • Calendar

    Original Post

    Latest comments

    Install Our App
    Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
    Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
    Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
    It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
    Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
    © 2007-2024 - Fusion Media Limited. All Rights Reserved.