EU and US Equities Rebound, but Asian Ones Slide

Sentiment Improves Temporarily on Earnings and Trading Restrictions

The US dollar traded mixed against the other G10 currencies on Thursday and during the Asian session Friday. It gained against CAD, JPY, and CHF in that order, while it underperformed versus NOK, NZD, GBP, AUD and SEK. The greenback was found virtually unchanged against EUR.

DAX — Technical Outlook

Looking at the technical picture of DAX on our daily chart, we can see that the index is currently stuck between short-term tentative lines, a downside one taken from the high of January 8th and an upside one drawn from the low of November 10th. Given this week’s negativity in the equity world, DAX may continue sliding a bit further, however, if it rebounds from that upside line, this could lead the index back up again.

NZD/JPY — Technical Outlook

NZD/JPY continues to balance above a short-term tentative upside support line taken from the low of December 21st. Yesterday, we saw the pair reversing higher from the area near that upside line and making its way closer to the current high of this week, at 75.12. If the rate remains above all of its EMAs on our 4-hour chart, we will aim for slightly higher areas, at least for now.

As for Today’s Events

During the European morning, Germany’s preliminary GDP for Q4 is coming out and although no forecast is available for the qoq rate, the yoy one is anticipated to have risen somewhat, to -3.4% from-3.9%. In any case, bearing in mind that we already have the ZEW and Ifo surveys for January out, as well as the preliminary PMIs for the month, we doubt that the GDP data for the last three months of 2020 will prove a major market mover. Given that investors have already an idea of how the German economy has entered the new year, they may treat the GDP data as outdated.

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