DJIA closed above 26,000 while US T-Note yield rallied

Market Recap

Prices as of previous day instrument closing.

• US indices rebounded and made a record close: DJIA rose 322.79 points or 1.25% to 26,115.65 while the Nasdaq Composite gained 74.59 points or 1.03% to 7,298.27. S&P500 closed at 2,802.56, up 26.14 points or 0.94%. In Europe the Euro Stoxx 50 slid 0.25% or 9.23 points to 3,612.78 and the Nikkei in Japan lost 104.97 points or 0.44% to 23,763.37.

• In the FX market EURUSD slid 0.6% to 1.2186 and GBPUSD rose 0.28% to 1.3831. USDJPY rallied 0.76% to 111.29. The Bank of Canada hiked rates by 25 bp to 1.25% and USDCAD increased its intraday volatility. However the rate closed the session almost unchanged, up 0.02% to 1.2438.  US 10 year Note yield jumped to 259 bp, up 2.1%.

• Gold closed at 1,326.84 $/oz, down 0.86% while silver dropped 1.11% to 17 $/oz.

Charts of the day

US 10 Year T-Note yield

The yield is making a multiple top in area 2.596 and a breakout could see 10 year T-Note rates testing 2.64. Above this static resistance there could be a consolidation and the rate it may reach the psychological area 3%. Beneath 2.50 the rate it may slide to 2.4 and then test again the multiple support at 2.3.

Economic Calendar

Chinese GDP was released at 08:00 CET and the data was 0.1% above the expectations at 6.8% YoY. Industrial production data were also better than expected at 6.2% YoY,while the consensus was at 6%. Retail sales data at 9.4% YoY did not match the expectations. Both the European and the US session will evaluate the impact of the Chinese data on risk appetite.  Crude Oil data inventories could trigger intraday volatility on Crude Oil at 17:00 CET.

Technical Analysis

EURUSD (Daily timeframe)

EURUSD went below 1.22 and it may test 1.2090 area. Beneath this level there could be a test of the demand line that links higher lows. Above yesterday high 1.2323 EURUSD it may rally to 1.2425, its 161.8% Fibonacci retracement.

USDJPY  (Daily timeframe)

USDJPY rebounded but is still trading below the most relevant moving averages. Only a breakout above 112.35 could lift the pair to 114.5 area. Beneath 110 the rate it may test its September low at 107.44.

IBEX  (Daily timeframe)

The stock index is trading in a range with higher side at 10,536 and lower range at 9,919. Above the higher side of the range IBEX could rise to 10,705, the 61.8% Fibonacci retracement of the selling wave started last May. Beneath the lower side of the channel it may be possible a test of 9,500.

EURGBP

EURGBP failed to rise above 0.8925 and it may test 0.8735 and then 0.87. Above 0.8925 the rate it may test 0.90.