Daily Market Report: January 8, 2021

Review:

U.S. stock market finished higher after the close on Thursday, as gains in the Technology, Oil & Gas and Consumer Goods sectors led shares up. The Dow Jones rose by 0.69 %, the S&P 500 gained 1.48% and the NASDAQ added 2.56% to its value.

Technical comment:

The Dow Jones RSI is mixed to bullish.

Preference scenario:

Long positions above 30,690 with targets at 31,300 & 31,690 in extension.

Alternative scenario:

Below 30,690, look for further downside with 30,480 & 29,880 as targets.

Resistance	31,300	31,690	31,900
Support	30,690	30,480	29,880

Review:

The USD/JPY pair jumped from a fresh multi-month low of 102.58 to 103.44, rallying alongside Wall Street, but mostly supported by US Treasury yields. The yield on the benchmark 10-year note jumped to 1.05%, above 1.0% for the first time since March. Democrats victory in Georgia fueled risk-appetite as upcoming US President Joe Biden’s party will dominate both chambers.

Technical comment:

The RSI calls for a new upleg.

Preference scenario:

Long positions above 103.45 with targets at 103.95 & 104.25 in extension.

Alternative scenario:

Below 103.45, look for further downside with 103.25 & 103.05 as targets.

Resistance	103.95	104.25	104.50
Support	103.45	103.25	103.05

Review:

Gold prices rose on Thursday as investors began making a beeline for the yellow metal despite a rebound in the dollar, as the win of the U.S. Senate by President-elect Joe Biden’s Democratic Party opened the path for stimulus that would benefit gold.

Technical comment:

Intraday technical indicators are mixed.

Preference scenario:

Short positions below 1928.00 with targets at 1900.00 & 1890.00 in extension.

Alternative scenario:

Above 1928.00, look for further upside with 1935.00 & 1946.00 as targets.

Resistance	1,928	1,935	1,946
Support	1,900	1,890	1,880

Review:

Oil headed for a ninth weekly gain in 10 as Saudi Arabia’s unilateral output cut eased over-supply fears and a Democratic sweep in the U.S. paved the way for more stimulus spending.

Technical comment:

A support base at 50.40 has formed and has allowed for a temporary stabilisation.

Preference scenario:

Long positions above 50.40 with targets at 51.30 & 51.70 in extension.

Alternative scenario:

Below 50.40, look for further downside with 50.00 & 49.50 as targets.

Resistance	51.30	51.70	52.20
Support	50.40	50.00	49.50

Review:

EUR/USD is consolidating just to the north of the 1.2250 mark after dropping about 0.5% or roughly 60 pips on the day as a result of a resurgent US dollar. The dollar reaction to the Democrat’s Georgia election victories earlier in the week, which handed them control of Congress, has been on balance positive thus far.

Technical comment:

As long as 1.2280 is resistance, the pair is likely to decline to 1.2210.

Preference scenario:

Short positions below 1.2280 with targets at 1.2210 & 1.2180 in extension.

Alternative scenario:

Above 1.2280, look for further upside with 1.2305 & 1.2325 as targets.

Resistance	1.2280	1.2305	1.2325
Support	1.2210	1.2180	1.2150

Review:

Cable has not seen much of a reaction in recent trade to concerning news that Congress had been stormed by a pro-Trump mob.

Technical comment:

The RSI calls for a new downleg.

Preference scenario:

Short positions below 1.3580 with targets at 1.3530 & 1.3500 in extension.

Alternative scenario:

Above 1.3580, look for further upside with 1.3610 & 1.3635 as targets.

Resistance	1.3580	1.3610	1.3635
Support	1.3530	1.3500	1.3475