Market indices around the globe hit new highs last week on the back of receding finical fears and better corporate outlooks.
This week kicks off the with US markets closed for Martin Luther King Jr Holiday so focus is likely to first turn towards the Euro Zone finance ministers meeting in Brussels followed later by the start of the Bank of Japans two day meeting, where both interest rates and inflation will be the topics up for discussion.
Late in the week it will pay to watch out for figures on the German economy Figures from Europe’s largest economy will be keenly watched for any sign of continued recovery in the region.
The US comes back into focus later in the week with both unemployment claims and New Home Sales. Will these figures help to support the current rally or will it be the slew of corporate earnings that determine which way markets head as the week progresses?
Key News This Week
- Monday – EUR – Eurogroup Meetings, JPY - Monetary Policy Statement (Rate)
- Tuesday – EUR - German ZEW Economic Sentiment,/ ECB President, USD - Home Sales, CAD - Retail Sales (m/m)
- Wednesday – GBP – MPC Meeting Minutes, CAD - Rate statement, CNY - HSBC Manufacturing PMI
- Thursday – EUR - German Flash Manufacturing PMI, USD – Unemployment claims
- Friday – EUR - German Ifo Business Climate, GBP - Prelim GDP (q/q), CAD - Core CPI (m/m), USD - New Home Sales
In Focus – EUR/USD
CALL – The EUR/USD continues to look ‘bullish over the medium term and has so far enjoyed short term support from its moving averages (5, 10, 20).
13250 looks good medium term support with temporary pullbacks to the moving averages used to enter long (hourly, end of day or weekly contracts).
EUR/USD - (see above)
USD/JPY - Having hit psychological support at 90.00 the pair has temporarily reversed. Key policy decisions on Tuesday will have important ramifications on near term direction. Advice is to stand aside.
USD/CHF - Opinions change and the break of the longer term falling trend line point to continued gains. While above 9285 remain bullish.
GPB/USD - The pair looks a lot weaker at present that its European counterpart. It I had to make the call I would look lower but given the EUR/USD offers a clearer setup I will stand aside this week.
DOW- Last week both the DOW and S&P500 closed out at new 5 year highs on the back of the early earning reports and improved growth data from China. Look to corporate earnings to dictate movements this week before the Home sales figures due on Friday.
NASDAQ - Any continued gains this week are most likely to be off the back off good corporate earnings. A number of large tech firms are due to report quietly earnings this week. If the figures start coming in good then I would continue to look higher - CALL
FTSE- The Index has held onto gains above 6000 made at the start of the year and now sits at a one year high. Treat 6000 as a line in the sand with moves back towards this level providing the opportunity to go long.
Oil - The black stuff burst through 95.00 in a higher move as predicted and gains look set to continue towards highs above 100. - CALL
Gold -I focused on Gold last week and it didn’t disappoint, moving as up to test support at 1692. On a daily close above this level I would look higher - CALL.
Tech Stocks – This is a busy week with a number of large companies reporting quarterly earnings, the most notable being Apple, Google, IBM, Microsoft.
With many of these companies disappointing the previous quarter, any results that beat the revised expectations will fuel gains. Try using hourly binary contracts to capture the dominant movements following the release of news.