S&P 500, ASX 200, Nikkei 225 Rise on Weaker USD, Yellen’s Testimony in Focus

S&P 500, ASX 200, NIKKEI 225, ASIA-PACIFIC MARKET OUTLOOK:

• S&P 500 index futures edged larger alongside Asia-Pacific fairness indices after an prolonged vacation weekend within the US.
• Janet Yellen’s Senate listening to is in focus right this moment, adopted by Joe Biden’s inauguration on Wednesday.
• The US Greenback receded as markets anticipate a ‘hands-off’ strategy from the brand new Treasury secretary.

Yellen’s testimony, USD, Asia-Pacific Shares Outlook:

Asia-Pacific markets look set to open broadly larger after a combined buying and selling session on Monday, as traders await Treasury Secretary nominee Janet Yellen’s Senate affirmation listening to later right this moment. The previous Federal Reserve Chair is prone to endorse a market-determined greenback worth and make it clear that the US doesn’t search a weaker forex for aggressive benefit, based on experiences from WJS. Yellen’s feedback could function a recent catalyst for the Dollar, after it registered a 1.5% acquire over the past two weeks. Ongoing QE and recent fiscal stimulus hopes could reinforce the Dollar’s downward trajectory within the medium time period. This morning, the DXY pulled again barely from its one-month excessive, assuaging stress on valuable metals, crude oil and shares.

DXY US Greenback Index

Chart by IG

In the meantime, the Covid-19 pandemic continued to develop world wide, with international every day instances hitting 688,015 on 16th January. The fast unfold of recent coronavirus strains and the follow-on tightening of restrictions could trace at a slower tempo of restoration on Foremost Avenue. Particularly for the tourism, restaurant, leisure and transportation sectors.

Trying again to Monday, China This autumn GDP development hit 6.5% YoY, beating market forecast of 6.1%. Industrial manufacturing expanded at a faster-than-expected tempo of seven.3%, whereas retail gross sales development registered a decrease print of 4.6% in December. Markets responded very in another way to Chinese language information, with mainland’s CSI 300 index and the Grasp Seng Index surging greater than 1 % whereas the remainder of Asia-Pacific suffered a gentle pullback. The Hong Kong-Shanghai inventory connection registered a considerable amount of southbound influx on Monday, reflecting sturdy urge for food from mainland traders for Hong Kong shares.

The ASX 200 index rebounded 0.93% on Tuesday morning, led by industrials (+1.24%), actual property (+1.14%), healthcare (+1.00%) and financials (+0.99%), whereas power (-0.20%) trailed behind. Base metals costs together with copper, nickel and iron ore superior on a weaker US Greenback, however didn’t elevate the steel and materials shares. The Nikkei 225 index superior almost 1% on the open.

ASX 200 Prime 10 Shares Efficiency at Open 19-01-2021

Supply: Bloomberg, DailyFX

Trying forward, merchants are dealing with a comparatively quiet day when it comes to macroeconomic information because the US market stays closed. Hong Kong’s unemployment charge, German inflation and Eurozone’s ZEW financial sentiment index are among the many key occasions to observe for. Discover out extra on DailyFX calendar:

S&P 500 Index Technical Evaluation:

Technically, the S&P 500 index prolonged its upward trajectory inside an “Ascending Channel” as highlighted within the chart under. The bull development is well-supported by its 20-Day Easy Shifting Common (SMA) line albeit the higher ceiling of the channel could function fast resistance. Help and resistance ranges will be discovered at 3,749 (61.8% Fibonacci extension) and three,804 (76.4% Fibonacci extension) respectively.

S&P 500 Index – Every day Chart

ASX 200 Index Technical Evaluation:

The ASX 200 index has been range-bound between 6,575 to six,770 since late November, as highlighted within the chart under. The higher and decrease certain could function an instantaneous resistance and help degree respectively. MACD divergence and a narrowing Bollinger Band recommend that upward momentum could also be faltering nevertheless. The index can be testing its 50-Day SMA, breaking under which can sign a deeper pullback..

ASX 200 Index – Every day Chart

Nikkei 225 Index Technical Evaluation:

The Nikkei 225 index hit the 100% Fibonacci extension degree of 28,770 and has retraced barely since. The general development stays bullish as highlighted within the two “Ascending Channels” under. A widened Bollinger Band width displays sturdy upward momentum, though a bearish MACD crossover could trace at short-term promoting stress. Rapid help and resistance ranges will be discovered at 27,800 (76.4% Fibonacci extension) and 28,770 (100% Fibonacci extension) respectively.

Nikkei 225 Index – Every day Chart

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Feedback part under or @margaretyjy on Twitter