The first full trading week of the year brought significant movements in the financial markets, highlighting a few key trends and events.
A notable trend this week has been a correction in major indices. The S&P 500 is marking its fifth consecutive bearish day and has slipped below the crucial 4700 points support level. This shift suggests a potential target around 4600 points. Similarly, NASDAQ recorded its sixth straight bearish day. The DAX also showed bearish signals, trading below the 16500 points resistance, indicating a mid-term sell signal.
The Japanese Yen experienced a notable correction, emerging as the weakest currency. In contrast, the American Dollar gained strength, making the USD/JPY pair particularly bullish with a continuous upward trajectory observed throughout the week.
The strengthening of the Dollar had an impact on commodities, particularly precious metals, which trended lower. Oil, however, charted its own course, starting the week with a drop but attempting a bullish reversal towards the end.
Economic Calendar Highlights:
- Thursday: Lower inflation figures from Germany and higher than expected ADP non-farm employment change in the US.
- Friday: A focus on non-farm payrolls from the US, anticipated at 168,000 with the unemployment rate expected to increase slightly. The CPI flash estimate from the Eurozone and ISM services PMIs from the US will also be closely watched.
As the week concludes, all eyes are on these crucial economic releases, particularly the non-farm payrolls and CPI data, which could further influence market directions. This week's dynamics underline the importance of being vigilant in such a volatile trading environment, especially when major economic indicators are released.