Daily Market Review January 08



The NFP data shall be released today and the U.S. job market seems to be healthy enough to generate a much better result for the NFP. The pace of hiring in U.S. was quite strong but a slowing economy noted at the start of January could add to the worries. Only a solid employment could ease fears of the recent weakness of the economy. Elsewhere, in the Eurozone, unemployment rate decreased which was a good sign for the Euro, however, a sharp fall in the retail sales data for a third straight month may urge the ECB to take more measures to soothe the Euro.

As of January this year, U.S. indices were further dragged down for a fourth-straight day yesterday, given a drop in Chinese equities and oil prices. The downtrend for U.S. indices has begun to instill fears over the market. The Dow Jones Industrial Average slumped down by 392.41 points to settle around 16,514.1 points while the S&P 500 lost 2.37 percent, being dragged to 1,943.09 points. The same sort was noticed for the NASDAQ which fell by 146.34 points, grabbing the handle of 4,689.43 points. Most of the indices lost quite much points towards the end of December, despite a superb Santa Rally.

Good news by the side of crude prices, as with the rise of China shares, oil prices also managed to jump higher by 2 percent. Global supply glut will continue to add negative effects for crude prices and prices are expected to drop again by the end of today’s session. Market analysts and investors are not satisfied with this little hike seen for crude prices and remain unwilling to see an end to falling prices. Turmoil in the Chinese market will drag on crude prices, while prices are said to fall below the level of $34 a barrel.

Technical Analysis:
An improvement by the side of Eurozone’s unemployment rate boosted the Euro, while at the same time, plunging retail sales data held back the euro. The EURUSD pair initiated the session around the 1.077 level and slowly climbed up to the 1.082 level before being dragged down again to the 1.078 level. However, due to a soaring unemployment rate, the pair picked up momentum again and jumped to the 1.086 level by the help of some momentary jumps. The pair succeeded in climbing higher to the 1.093 level but with the NFP data awaited today, the pair might be jeopardized. The pair commenced a bearish session today, certainly because of fears pertaining to the NFP, therefore traders are advised to verify market trends before trading on this pair.
The pair USDJPY is the pair to watch today, as normally after the NFP this pair is the most affected. The pair USDJPY started the session around the 118.6 level and within hours, the pair was dragged down to the 117.8 level. Later, the pair climbed up to the 118.1 level and consolidated within a specific range. Following, some pullbacks and momentary jumps, the pair closed the session around the 117.5 level. This level is quite low from what is expected from the USDJPY. The pair has fallen to unexpected lows since a few months now. Currently, the pair is trying to gap higher around the 118.4 level, navigating below the Ichimoku cloud. The pair might move above than the Ichimoku cloud, which may signal a bullish session. The two lines of the Ichimoku cloud might cross around the 118.0 level which may turn out to be an intersection indicating a change. Thus, keep an eye on market trends to trade safer here.

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The pair GBPUSD continues to hover around the lower support line on the charts and had finally fell around support seen six years ago. Yesterday, the pair was dragged down to the 1.456 level which was extremely low for the pair. The GBPUSD pair commenced the session around the 1.462 level and consolidated for a while before it was pulled down to the 1.456 level. Fears around this pair caused more woes to the trading session. The pair did try to gap higher at the 1.462 level but closed the session around the same level. Given, the NFP data awaited today, the pair might be further dragged down or a formation of a shooting star could be anticipated. Therefore, in order to trade safely here, look out for trends set after the NFP, grab some PUT options if the NFP is positive.

 

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