News & Analysis

Equity Markets continue higher – Dow Jones breaks above 25K; Gold fires back to life closing above $1320; EURUSD adds 52 pips close to 3-Month highs

Jan 5, 2018 | Daily Market Outlook

Today’s high impact news:

▸21:00 CPI Flash Estimate
▸00:30 US data; USD – Average Hourly Earnings m/m – Non-Farm Employment Change – Unemployment Rate
▸00:30 Canadian data; CAD – Unemployment Rate – Employment Change – Trade Balance
▸02:00 USD – ISM Non-Manufacturing PMI

U.S markets – continued their strong start to 2018 with further gains overnight, the Dow Jones added 152.45 to close above 25,000. The S&P500 added 10.93 and the NASDAQ closed 12.38 points higher. Jobs data drove the run as the Dow Jones tries for its fastest 1000 point gain. The Dow broke above 24,000 for the first time on Nov. 30, or 35 calendar days prior to hitting 25,000. It also took the Dow just 35 days to rise from 20,000 to 21,000 last year. “Right now, we’re in this Goldilocks scenario,” said Tim Courtney, chief investment officer at Exencial Wealth Advisors. “The news has been good. Confidence is up. Everything is lining up just right.” The U.S. private sector added 250,000 jobs in December, ADP and Moody’s Analytics reported before the opening bell. Economists polled by Reuters expected a gain of 190,000. This data could be a positive lead for tonight’s Non-farm payrolls and Unemployment rate. European markets  – moved higher on Thursday, the CAC and DAX being the standouts. The CAC added 82.41, the DAX surged 189.68 and the FTSE closed 24.77 points higher. Automotive stocks led the gains on better-than-expected U.S. car sales data, and the sector was up 1.9 percent. Britain’s FTSE 100 hit a record high of 7,701.93 during yesterday’s session.

Forex – Wednesday’s brief recovery reversed last night as sellers once again set the tone for the USD. A stronger-than-expected U.S. private-sector jobs report briefly helped the dollar pare losses versus the euro and extend gains against the yen. But those moves were short-lived. Investors are now focused on Friday’s U.S. non-farm payrolls report, which is expected to show job gains of 190,000 for December. The AUDUSD continued its charge adding another 30 pips locking in .7824 as support. The Australian trade balance just came in at a miss, this has put pressure on the AUD in this morning’s trade. The EURUSD rallied further overnight closing in on 3-month highs. 1.2090 showing minor resistance on the daily chart. The GBPUSD made a small recovery last night but lagged the others to a weaker USD. The Cable closed 35 pips higher. The JPY continued lower, the USDJPY added 22 pips closing higher for a 2nd session. The AUD and EUR made further new weekly highs to the JPY. Gold bounced back strongly to the USD weakness adding $9.50 to close above $1320. We discussed short-term support at 1305 yesterday and it has confirmed. As the NFP is due out Saturday morning traders should be wary of current technical levels as any misses in tonight’s data could reshape them. It could be do or die for the USD tonight as its vulnerable at the moment and any negative driver could really send it tumbling!.

EURUSD  – moving out of consolidation, one more high remains for buyers to beat, which was just about tested last night. Tonight’s Euro Zone CPI Flash Estimate and NFP could have a big influence on buyer momentum.

Good trading from Eightcap.

Sources; CNBC.  All times are AEDST


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