Daily Market Report: January 22, 2021

Review:

U.S. stocks were higher after the close on Thursday, as gains in the Technology, Consumer Services and Consumer Goods sectors continued to lead shares higher. At the close in NYSE, the Dow Jones Industrial Average gained 0.10% to hit a new all-time high, while the S&P 500 index climbed 0.18%, and the NASDAQ Composite index powered on, adding another 0.66%.

Technical comment:

The immediate trend remains up, but the momentum is weak.

Preference scenario:

Long positions above 3,816.00 with targets at 3,894.00 & 3,919.00 in extension.

Alternative scenario:

Below 3,816.00, look for further downside with 3,780.00 & 3,749.00 as targets.

Resistance	3,894	3,919	3,959
Support	3,816	3,780	3,749

Review:

The USD/CAD pair rose slightly on Thursday, offering a reprieve from the downtrend of the last week, closing at 1.2648.

Technical comment:

The RSI is bullish and calls for further upside.

Preference scenario:

Long positions above 1.2620 with targets at 1.2665 & 1.2685 in extension.

Alternative scenario:

Below 1.2620, look for further downside with 1.2605 & 1.2590 as targets.

Resistance	1.2665	1.2685	1.2715
Support	1.2620	1.2605	1.2590

Review:

Gold prices lost little vigor on Thursday as it continued its rebound from recent $1,800 lows as the Biden administration’s plans to aggressively stimulate the U.S. economy with huge spending further weakened the dollar.

Technical comment:

Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

Preference scenario:

Long positions above 1,858.00 with targets at 1,875.00 & 1,885.00 in extension.

Alternative scenario:

Below 1,858.00, look for further downside with 1,848.00 & 1,840.00 as targets.

Resistance	1,875	1,885	1,894
Support	1,858	1,848	1,840

Review:

Oil prices were little changed on Thursday ahead of weekly inventory data from the U.S. government which is expected to show another build in fuel stockpiles. New York-traded West Texas Intermediate, the key indicator for U.S. crude, settled down 18 cents, or 0.3%, at $53.13 per barrel. London-traded Brent, the global benchmark for crude, settled two cents higher at $56.10. The Energy Information Administration is scheduled to report on Friday the closing balances for crude, gasoline, and diesel-led distillates for last week.

Technical comment:

The RSI is bearish and calls for further downside.

Preference scenario:

Short positions below 53.15 with targets at 52.40 & 52.05 in extension.

Alternative scenario:

Above 53.15, look for further upside with 53.40 & 53.70 as targets.

Resistance	53.15	53.40	53.70
Support	52.40	52.05	51.80

Review:

The Euro ticked higher before a meeting of the European Central Bank on Thursday, with the dollar declining versus major peers. Plans for a massive U.S. stimulus package continue to fuel market optimism and sap demand for safe-haven currencies.

Technical comment:

The break above 1.2140 is a positive signal that has opened a path to 1.2180.

Preference scenario:

Long positions above 1.2140 with targets at 1.2180 & 1.2200 in extension.

Alternative scenario:

Below 1.2140, look for further downside with 1.2115 & 1.2095 as targets.

Resistance	1.2180	1.2200	1.2220
Support	1.2140	1.2115	1.2095

Review:

The Pound/US Dollar exchange rate remained just above the key $1.37 level today as the pairing remains strong on President Joe Biden’s first full day in office. The pairing is currently trading around $1.371.

Technical comment:

Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

Preference scenario:

Long positions above 1.3700 with targets at 1.3745 & 1.3770 in extension.

Alternative scenario:

Below 1.3700, look for further downside with 1.3675 & 1.3650 as targets.

Resistance	1.3745	1.3770	1.3800
Support	1.3700	1.3675	1.3650