Overnight we saw the Asian session make steady advances for the first time in three days. The main driving force behind this move to the upside was was the strong GDP reading out of the Chinese economy, the economy expanded 7.9% in the fourth quarter according to published government data last night. This data highlights the global growth recovery story and has given support to the rally that we have witnesses from the start of January.
We saw the Yen break through the psychological 90.00 level against the USD its lowest level in over 3 years, analysts across the board seem to be extremely bullish on the Japanese market on the back of the weaker Yen which will boost Japanese exporters earnings.
We saw the EUR/USD pair touch the 1.34 handle overnight but large sell orders at this level now have the pair back down at 1.33728 at the time of writing. The direction of the euro today we need to keep an eye on the EUR/JPY which is currently trading above 120, however this level on both weekly and daily charts is overbought which would suggest a correction may occur but we should wait and see if the rally continues or we see some profit taking at the end of the trading week.
In the US equity markets we had good data out of the us yesterday which helped indices take another leap to the upside. An Interesting level to note on SPX is 1474 any level above this will support the bullish rally, and it may act as a new floor going forward. The DOW broke through the 13600 level during yesterdays trading session however it failed to close above here which could be interesting to note.
I think we might see some profit taking alter on into the European close, and later on into the US close. All asset classes have made major advances this week and it would only natural to see some people taking some money out of the market and cashing in on profits.
Happy Trading
@Lowkeycapital
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