Daily Review for January 5, 2021
New lockdown in UK impacts the FTSE and GBPUSD and tests the country’s strategy to protect the economy
The Dow Jones awaits the results of the Georgian elections
Retail sales in Germany exceed market expectations
Traders aware for delayed vaccinations in the US and Europe. New lockdowns are estimated
FTSE 100 -0.36%
FTSE 100 is currently trading at 6,514 points, which represents a 0.36% decline from yesterday. Actual fall is due to the announcement of the United Kingdom to issue a new lockdown to counteract the significant increase in cases (50,000 cases yesterday) of the new covid strain in the UK. This lockdown affects companies in the index, as it slows down their business and affects their sources of income.
- Support 1: 6,499.3
- Support 2: 6,492.4
- Support 3: 6,480.8
- Resistance 1: 6,517.8
- Resistance 2: 6,529.4
- Resistance 3: 6,536.3
- Pivot Point: 6,510.9
The FTSE 100 is forming a rising triangle with a resistance at 6,677. The index is above the 25 and 50 day moving averages. In the short term the index is expected to continue in the uptrend channel with the presence of volatility caused by new lockdowns and the delay of vaccinations in Europe and the USA.
DOW JONES -0.26%
Global markets started 202 with significant gains as a result of investor appetite for the beginning of the year. However, news of rising infection rates, delayed vaccinations and possible new lockdowns caused hedge funds to sell some of their portfolio assets, causing the indexes to close in red. The Fear and Greed index reads 52 out of 100 points, indicating a neutral level.
On the other hand, traders are watching Georgia elections in the US, where they expect the Republicans to win a seat, which could stop President-elect Biden from raising taxes.
- Support 1: 30,117.6
- Support 2: 30,087.8
- Support 3: 30,064.6
- Resistance 1: 30,170.6
- Resistance 2: 30,193.8
- Resistance 3: 30,223.6
- Pivot Point: 30,140.8
Yesterday the index broke the 30,000 support and reached 29,897 points. It is currently trading at 30,010 points, indicating that the price is below the 25 and 15 day moving average. The Bulls are looking to regain the index level above 30K, therefore they are targeting resistance at 30,677 points.
GBPUSD -0.05%
The currency continues to decline following the new lockdown determined yesterday by Prime Minister Boris Johnson. At the moment the currency is falling by 0.05%. Today’s economic data, such as the US Manufacturing PMI, may cause volatility in the currency.
Meanwhile, despite UK efforts to conclude a Brexit agreement to contain the counter effects on the economy, the new strain of coronavirus may impact its strategy.
- Support 1: 1.3591
- Support 2: 1.3580
- Support 3: 1.3571
- Resistance 1: 1.3610
- Resistance 2: 1.3620
- Resistance 3: 1.3630
- Pivot Point: 1.3600
The currency is forming a bearish pattern. At this moment it is at the same level as the 25 and 15 day moving average. The RSI has moved from the oversold level of 25 to 50. Expected trading range between 1.3571 and 1.3630 with a pivot point for a change in trend at 1.3600.
DAX 30 +0.04%
At the moment the German Stock Exchange index is trading at 13,710 points. At the opening of the markets in Europe, there was an interesting volatility as a result of the fact that despite the lockdown, retail sales in Germany increased by 5.3% with respect to 2019.
Interestingly, this shows that household demand and consumption was not affected and that demand for e-commerce services in the country increased.
- Support 1: 13,713.37
- Support 2: 13,700.01
- Support 3: 13,687.37
- Resistance 1: 13,739.37
- Resistance 2: 13,752.01
- Resistance 3: 13,765.37
- Pivot Point: 13,726.01
Expected trading range between 13,687 and 13,765. Pivot point for trend change at 13,726. Index has managed to stay above the support of 13,700. Ichimoku cloud estimates a movement towards 13,743 with support at 13,692.
Sources
- Reuters
- Market watch
- Bloomberg
- Capitalix Market Research
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