Stock Market Corrects Lower as we Approach Year End

USD AND OTHER SAFE-HAVENS REBOUND, RISKY ASSETS PULL BACK

The US dollar traded higher against all but two of the other major currencies on Tuesday and during the Asian session Wednesday. The currencies against which it failed to eke out any gains were JPY and CHF, with USD/JPY and USD/CHF found virtually unchanged this morning. The greenback strengthened the most versus NZD, CAD, AUD, and EUR.

DAX — TECHNICAL OUTLOOK

The German DAX cash index has been in a recovery mode since December 20th, when it hit support at 15065. Yesterday, it cleared the 15860 zone, marked by the high of December 7th, and hit resistance at 15980. In our view, with no sings that the recovery is running out of steam, we would expect it to continue for a while more.

EUR/USD — TECHNICAL OUTLOOK

EUR/USD traded somewhat lower yesterday, after it hit once again resistance at 1.1335. That said, the slide was stopped, at least for now, near the 1.1290 level. Overall, the pair remains within the sideways range that’s been in place since November 26th, between the 1.1233 and 1.1375 barriers, but it also trades below the downside resistance line taken from the high of May 25th, which, in our view, increases the chances for a downside exit out of the range, rather than an upside one.

AS FOR TODAY’S EVENTS

The only releases worth mentioning on today’s schedule are the US pending home sales for November and the EIA report on crude oil inventories for last week. Pending home sales are expected to have slowed notably, to +0.5% mom from +7.5%, while the EIA report is forecast to show that inventories have slid by 3.233mn barrels, after falling by 4.715mn the week before.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
JFD

JFD

JFD is a leading Group of Companies offering financial and investment services and activities.