Dollar weighed as risk appetite grows

Market Recap

 

Market Recap	%	Close Price
NATGAS(FEB 18)	1.34%	2.953
XAUUSD	0.60%	1302.8
EURUSD	0.52%	1.2005
USDJPY	-0.16%	112.69
USDMXN	-0.32%	19.659
DAX(MAR 18)	-0.42%	12910

 

• Dollar kicks off the new year with fresh losses weighed by heightened risk appetite, and bullish commodities and emerging market currencies.

• EURUSD closes the year above 1.2000, up 0.125% to 1.2032 so far on Tuesday.

• Dollar Index falls to 91.76, drops almost 10% in 2017, its worst annual showing since 2003

• Gold leads commodities, closes 2017 0.60% higher above 1300$ per ounce.

• Asian currencies set the tone so far on Tuesday, with Chinese yuan surging higher pushed by strong Chinese equities.

• WTI Crude oil rises towards $61 per barrel as US drilling activity remains flat. Unrest in Iran, OPEC’s third largest producer, buoyed oil future prices higher as the death toll from clashes with armed forces rose.

• Aussie and Kiwi climb higher, as higher-yielding antipodean currencies were lifted by risk-on sentiment. The Aussie advanced to a ten-week high

• S&P500 records best year since 2013, futures accelerate above 2680 in Asian trade on Tuesday.

 

Tuesday January 02, 2018  CET Time			Forecast	Previous
Holiday	JPN	Japan - Exchange Holiday
09:55	EUR	German Manufacturing PMI (Dec)	63.3	63.3
10:00	EUR	Eurozone Manufacturing PMI (Dec)	60.6	60.6
10:30	GBP	UK Manufacturing PMI (Dec)	58.0	58.2
15:45	USD	US Manufacturing PMI (Dec)	55.0	55.0
22:30	USD	API Weekly Crude Oil Stock		-6.000M

 

 

Chart of the day

NATGAS (Feb2018) (Daily timeframe)

 

NATGAS (Feb18) jumped higher extending its bullish run to $3.097. Prices opened with a gap higher, with the opening of gap at $3 expected to provide the day’s support. The 61.8% Fibonacci retracement of the September high to December low move at $3.1083 will act as key resistance on the upside.

 

Technical Analysis

 FTSEMIB (Daily timeframe)

FTSE MIB Index tumbled lower below the key 22000 psychological level and seems to be confirming a head and shoulders reversal pattern. The target if the pattern is realized will be just below 21000, while the neckline above 22000 will act as an important resistance level.

EURUSD (Daily timeframe)

EURUSD extended its gains above 1.2000, and steadily approaches a key multi-year high at 1.2088. A break of this key resistance level may see the pair extend its gains towards 1.2230, the 127% Fibonacci extension of the September to December move. Support lies at the breakout point at 1.1961.

WTI Crude February 2018 (Daily timeframe)

WTI Crude oil (Feb 2018) climbed towards 61$, edging further away from a key breakout point at $59.  Price action should run into resistance ahead at $61.90, represented by the low of March 2015. Prices should be well supported by $60 and the breakout point at $59.