Daily Review for January 15, 2021
EURUSD recovers some of its decline helped by the FED
Market expects volatility in the companies that compose the Nasdaq 100, as a result of increased regulation and corporate taxes by Biden
Crude oil continues to rise, pointing to next resistance at USD$54 per barrel. The market keeps momentum by reducing supply, but not by increasing demand
Short-term downward trend for gold, but possible light at the end of the tunnel, as the FED may be forced to raise interest rates to control inflation and the price of USD
EURUSD -0.08%
Yesterday the currency showed a significant drop as the market anticipated the FED’s announcements. During Jerome Powell’s speech, the EURUSD recovered some of its decline. He stated that the US economy is still waiting for the impact of the pandemic.
Economists believe that the FED may begin to raise interest rates to mitigate the inflationary effect in the medium term, caused by the high money supply generated by the economic stimulus packages. The currency is currently trading at 1.2143 and traders are aware today of US retail sales data.
- Support 1: 1.2139
- Support 2: 1.2132
- Support 3: 1.2128
- Resistance 1: 1.2150
- Resistance 2: 1.2154
- Resistance 3: 1.2161
- Pivot Point: 1.2143
EURUSD is forming a head-shoulder pattern, which according to technical data is a downward indicator. The currency is below the 1.2150 support. Bears are targeting 1.2060. Pivot point for a change in trend at 1.2143.
NASDAQ 100 -0.17%
Following Biden’s speech and the rise in bond yields in the market, investors and Nasdaq companies are concerned about a possible rise in corporate tax rates and regulation.
Therefore, volatility in the index is expected in the short term. Biden’s proposed stimulus package is about USD$1.9 trillion.
- Support 1: 12,856.30
- Support 2: 12,848.09
- Support 3: 12,839.18
- Resistance 1: 12,873.42
- Resistance 2: 12,882.33
- Resistance 3: 12,890.54
- Pivot Point: 12,865.21
The index is entering a bearish trend. Bears have managed to break through the 12,900 resistance and the index is below the 50-day moving average. Next target is 12,767. Expected trading range between 12,839 and 12,890. Pivot point at 12,865.
CRUDE OIL -0.95%
Crude oil is currently falling by 0.95%, but has managed to stay above USD$53 per barrel. Yesterday the price reached USD$53.85 per barrel level caused by OPEC’s production cut and Nigeria’s Force Majeure for its oil exports.
The market is continually reviewing oil demand. If vaccines are quickly put in place, the industry could have a V-shaped recovery rather than a U (extended) or L-shaped one (Long), so the price could reach higher levels. Key factor is that supply is maintained only with slight increases.
- Support 1: 53.04
- Support 2: 52.98
- Support 3: 52.93
- Resistance 1: 53.15
- Resistance 2: 53.20
- Resistance 3: 53.26
- Pivot Point: 53.09
Oil is trying to break the resistance of USD$54 per barrel, which is at the 50% of Fibonacci expansion level. If it breaks, the next target is 61.8% level at USD$55.84. Expected trading range between 52.93 and 53.26. Pivot point at 53.09.
Gold -0.02%
The metal continues in a phase of slight recovery compared to the important fall that it presented during the last week and beginnings of this one. Yesterday, it almost broke through the $1,800 support and managed to climb to $1,856 again as the market is assimilating that the FED will be pressured to move into a quick monetary policy strategy, to stabilize the USD, inflation, and in general the US economy.
USA economy can be in a path of growth, but the big flow of money coming from stimulus packages, can cause instability in some market assets.
- Support 1: 1,849.44
- Support 2: 1,846.87
- Support 3: 1,845.14
- Resistance 1: 1,853.74
- Resistance 2: 1,855.47
- Resistance 3: 1,858.04
- Pivot Point: 1,851.17
The price is in a congested area, trying not to fall towards the USD$1,800 support. If it breaks it, next level is USD$1,747. Bulls are trying to clear the area in order to push prices to 1,860 to 1,870 and then to 1,900. Short-term downward trend. Possible change of trend, if the new regulation in the USA affects the companies listed in Nasdaq.
Sources
- Reuters
- Market watch
- Bloomberg
- Capitalix Market Research
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