News & Analysis
Dow – NASDAQ continue recovery charge; Oil breaks back above $63; JPY making new push this morning
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US markets – finished Friday higher capping off a strong week to further the recovery. The Dow closed 347.51 higher. The S&P500 closed 43.43 higher and the NASDAQ jumped up by 127.30! After a soft start to the week, the Dow Jones finished with new weekly highs. The Dow and S&P 500 were on track to close down by 1 percent for the week. They finished the week with gains of 0.4 percent and 0.6 percent, respectively. “We have a champagne problem,” said Nick Raich, CEO of The Earnings Scout. “The economy is running too hot and that brings fear of higher rates. But that’s better than having to jump-start an economy that’s running cold.”
Taking a look at the US30 daily chart, we still see a mixed picture, overall a bearish continuation pattern is hanging in there but only just as buyers are testing 25,400 resistance this morning. On the short-term, the recovery rally remains true with a last week’s higher low. A new higher high break out above 25,400 starts to put some cracks in the bear pattern. Tonight’s session could set the tone.
Oil – We spoke about the higher low last week, buyer strength prevailed on Friday as buyer’s maintained control of the market adding 95 cents to close above $63. Buyers supported by a dip in Libyan production and upbeat comments from Saudi Arabia that an OPEC-led effort to erode stockpiles is working. Buyers started their rally on Thursday fighting back from a failed low. Buyers have added 226 cents since Thursday’s open.
European markets – closed mixed on Friday, the FTSE lost 7.98. the DAX gained 21.88 and the CAC closed 8.14 points higher. Retail was the biggest loser Friday afternoon, with Zara-owner Inditex struggling at the bottom of the sector. Telecoms rallied Friday afternoon, ending the day over 2 percent higher. The GER30 closed the week on a bullish note breaking above its short-term range to close at 12,542. We see 12,670 as the next high for buyers on the 4H chart.
Forex – Friday saw a late fightback to the USD excluding the EUR as it continued its decline. The cable finished higher and the AUDUSD climbed off its lows. The JPY had a mixed session, the EURJPY ended lower but other majors had positive sessions. This morning we’ve seen gaps higher to the JPY from the majors. Canadian CPI rocked the USD as it beat expectations sending the CAD charging. The USDCAD finished 75 pips lower. 1.2625 came in as a resistance point for sellers and may develop into a low. This morning the USD has started stronger to risk currencies after buyers opened with higher gaps. The EURUSD continues show seller pressure testing Friday’s low.
Gold – finished lower on Friday losing $2.10 but finishing off daily lows. Sellers have been active this morning taking price $1.60 lower, buyers look to have set a short-term low from 1326.50, seen on the 4-hour chart. We’re seeing a higher descending triangle with a higher low. If buyers can hold 1326.50 we could see buyers attempt a pattern break-out.
Good trading from Eightcap.
Sources; CNBC. All times are AEDST
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