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05 January 21
Economic Data Puts the EUR in Focus, with the Senate Race and COVID-19 also Key Drivers
Economic data from Germany will put the EUR in focus early on. The senate race and COVID-19 updates will likely be the key drivers, however.
The Day Ahead:
For the EUR
It’s another particularly busy day ahead on the economic calendar. German retail sales figures for November and unemployment figures for December are due out later this morning.
While retail sales figures will influence, expect unemployment change numbers to have the greatest impact on the EUR.
Away from the economic calendar, COVID-19 vaccine updates and new cases will also influence. On the geopolitical front, expect the Senate race to also provide direction.
At the time of writing, the EUR was up by 0.02% to $1.2251.
For the Pound
It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out today to provide the Pound with direction.
COVID-19 containment news will likely be the key driver on the day.
At the time of writing, the Pound was up by 0.04% to $1.3576.
For the USD
It’s a relatively quiet day ahead on the economic calendar. The market’s preferred ISM manufacturing PMI figures are due out later today.
Expect some sensitivity to the numbers.
Ultimately, however, the Georgia runoffs for the Senate race will decide the fate of the Dollar.
E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Strengthens Over 12710.50, Weakens Under 12588.25
Trader reaction to the pair of 50% levels at 12588.25 and 12710.50 will determine the direction of the index into the close.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum may be getting ready to shift to the downside with the formation of a closing price reversal top.
A trade through the intraday-high at 12959.75 will signal a resumption of the uptrend. The main trend will change to down on a move through 12461.00.
The first minor range is 12461.00 to 12959.75. Its 50% level comes in at 12710.50.
The second minor range is 12217.00 to 12959.75. Its 50% level is at 125a88.25.
The short-term range is 10936.25 to 12959.75. If the main trend changes to down then its retracement zone at 11948.00 to 11709.25 will become the primary downside target area.
Short-Term Outlook
Trader reaction to the pair of 50% levels at 12588.25 and 12710.50 will determine the direction of the index into the close.
A close below 12885.50 will form a closing price reversal top. If confirmed on Tuesday then look for the start of a 2 to 3 day correction. Potential downside targets are the pair of main bottoms at 12461 and 12217, and the retracement zone at 11948.00 to 11709.25.
https://www.investing.com/indices/nq-100-chart
USD/JPY: Further retracement is on the cards – UOB
24-hour view: “We expected USD to weaken yesterday but we were of the view that ‘102.85 is a solid support and this level is unlikely to yield so easily’. We highlighted that the ‘next support is at 102.60’. USD subsequently cracked 102.85 before rebounding strongly after touching a low of 102.69. The rebound has scope to edge above 103.30 but is unlikely to threaten the strong resistance at 103.65. Support is at 102.95 followed by 102.75.”
Next 1-3 weeks: “We highlighted yesterday that ‘the risk of a break of 102.86 has increased, any weakness is likely limited to 102.60’. USD subsequently took out 102.86 before rebounding strongly after touching a low of 102.69. While the risk is still for a lower USD, downward momentum is not strong and 102.60 may not break so soon. Looking forward, the next support below 102.60 is at 102.30. All in, USD is deemed to be under mild downward pressure as long as it does not move above 103.65 (no change in ‘strong resistance’ level).”
https://www.fxstreet.com/news/usd-jpy-further-retracement-is-on-the-cards-uob-202101050632
https://www.investing.com/currencies/usd-jpy-chart
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