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ASX200 joins record-setting start to 2020, NFP to come

jeffriess
January 10, 2020
by Joseph Jeffriess, Market Analyst

Article Recap

Tonight's US and Canadian Employment data is due out at 12:30 am AEDT tonight 

ASX200 breaks records after US indexes set new records for the second day in a row.

Wednesday’s sell-off seems like a distant memory now as risk markets (especially stocks) bounced back to the safe havens like the yen. The USD has shown resilience over the last 24 hours making sold gains to the CAD and JPY, and holding the AUD, GBP and EUR at bay. The USDJPY has had a great week adding 1.56%.

The ASX200 has been another star this week surging 3.12% into new record prices. (current buy 6923.60) Let’s think back to Christmas and the last week of 2019. Sellers took 1.56% off in two weeks while other indexes continued higher. Things on the ASX looked very weak until the 2nd the January when we finally saw some buyer interest. Price closed 1% higher that session and set the low for the current 3.72% rally.

Below is the monthly chart of the ASX200, its been a long time between record drinks! (12 years)

It’s been business as normal on US indices as markets hit new records in last night’s session and the overnight session has hit new records today. The Nasdaq currently is the strongest out of the big three, the NDX100 cfd has added 2.15% since Wednesday’s open and 0.32% so far today.

The USD has seen buyer demand since Wednesday which has been a touch surprising. Its made solid gains to the CAD +.47% and stunning gains to the JPY  +1.04%. The USDJPY now faces one to two tests, buyers have now returned to the December 2019 key resistance this area starts at 109.50 and runs up to around 109.68.  Buyers have been unable to break above this level since it started in November 2019 and last main test in December led to a 1.54% decline. Combine that with tonight’s NFP and price could be in for solid moves depending on the data. Earnings are expected at 0.3% Payrolls 162K and Unemployment steady at 3.5%.

Traders will be looking for higher or lower than expected data to create market moves, that could see the USDJPY break or fail at its current resistance point. The data could also have an effect on the current stock index positions. A lot weaker than expected could have a short term negative impact while higher could support buying while maintaining the position of the neutral rates from the FED.

Tonight’s US and Canadian Employment data is due out at 12:30 am AEDT tonight.

Good trading from Eightcap.
All times are AEDT.