Daily Review for January 8, 2021
Market awaits NFP data in the US
FTSE with upward momentum, but with pressure cause of its macroeconomic data
Traders begin to mark their positions in the GBPUSD
Gold breaks the 1.900 support. Bulls are expecting a price recovery if the NFP data is bad
S&P500 continues the rally, but analysts are worried about the brake that the NFP could generate
FTSE 100 +0.30%
UK index is rising consecutively since Monday of this week, driven by possible new economic stimulus packages in the US and because investors are optimistic about today’s NFP numbers. Analysts are forecasting an NFP figure of 71,000 today.
Previous figure was 245,000 out of a forecast of 469,000. On the other hand, Democrats in the US have presented a series of priorities, among them greater public spending on infrastructure, which is positive for FTSE companies that do business in the US.
- Support 1: 6,844
- Support 2: 6,837.9
- Support 3: 6,829
- Resistance 1: 6,859
- Resistance 2: 6,867.9
- Resistance 3: 6,874
- Pivot Point: 6,852.9
Upper Bollinger Band above 6,839 points, and the Ichimoku cloud supports the index’s upward trend, indicating a possible trading range for today between 6,807 and 6,715. Next level of the Bulls is 7,000. Pivot point at 6,852.
GBPUSD +0.05%
The currency is currently up 0.05%, but is beginning to feel pressure from the NFP. In the economic context, the Brexit agreement was positive for the currency. However, the new lockdown puts stress on companies, which must ask for state aid.
The government having more spending, will have to increase its debt level, which could indicate that the Bank of England could move the interest rate to negative. On the other hand, if the NFP data is positive, the GBPUSD could fall. If the report is bad, the currency could rise.
- Support 1: 1.3571
- Support 2: 1.3564
- Support 3: 1.3556
- Resistance 1: 1.3586
- Resistance 2: 1.3594
- Resistance 3: 1.3601
- Pivot Point: 1.3579
The currency is forming a decent channel, with support in 1.3536. The RSI ratio is neutral. Traders are watching the NFP data; however, they have already begun to mark positions. Expected trading range between 1.3586 and 1.3601. Pivot point at 1.3579.
Gold -1.45%
Gold finally broke down the support of 1,900 and is currently trading at USD$1,886 per troy ounce. Traders are beginning to mark out positions in gold, estimating that the NFP figure will be worse than the November 2020 figure. If the report is lower than expected, the Bulls target levels of 1,954 and 1,969.
Meanwhile the Bears know that if the NFP data is good and the unemployment data is better than expected, the price target is 1,869 and 1,850.
- Support 1: 1,903.84
- Support 2: 1,901.92
- Support 3: 1,898.59
- Resistance 1: 1,909.09
- Resistance 2: 1,912.42
- Resistance 3: 1,914.34
- Pivot Point: 1,907.17
Expected trading range between 1,898 and 1,914 with Pivot Point at 1,907. US economy is under pressure from the coronavirus and therefore traders are watching the movements of the metal. Gold continues to be the natural hedge for market volatility. Other assets have started to become safe havens like Bitcoin, but with higher degree of speculation.
S&P500 +0.36%
This week the index has shown a significant rise, driven by greater economic stimulus packages planned for the US, due to the control of the Senate and the Presidency by the Democratic Party.
Today, the rally could be slowed down by the outcome of the NFP, where economists are more pessimistic than optimistic. The first impact could be felt by the S&P500, which concentrates a large part of the largest companies in the USA.
- Support 1: 3,812.12
- Support 2: 3,810.12
- Support 3: 3,808.62
- Resistance 1: 3,815.62
- Resistance 2: 3,817.12
- Resistance 3: 3,819.12
- Pivot Point: 3,813.62
The index has managed to break through the 3,800 resistance and continues its upward momentum. The RSI is entering the overbought level, and the next resistance to break is 3,860 which is above the 100% Fibonacci retracement level. If the Bulls manage to break this level, the next target is 4,000. Expected trading range between 3,808 and 3,819.
Sources
- Reuters
- Market watch
- Bloomberg
- Capitalix Market Research
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