Wall Street steadies after a strong week

US indices consolidated a bullish week on Friday, though the ongoing US government shutdown capped sentiment. A Japan holiday today could impact liquidity in the Asian session. China releases trade data for December, which could dictate near-term direction.

US30USD Daily Chart

Source: OANDA fxTrade

• The US30 index posted its biggest weekly gain since late-November last week, buoyed by a dovish shift from the Fed

• The 61.8% Fibonacci retracement of December’s drop is at 24,308, while the 55-day moving average has edged lower to 24,411

• US consumer prices matched expectations in December, falling 0.1% m/m, the first decline in nine months. There are no major data releases today but markets will be keeping an eye on the US government shutdown situation.

DE30EUR Daily Chart

Source: OANDA fxTrade

• The Germany30 index snapped a three-day winning streak on Friday as the UK’s looming parliamentary Brexit vote (tomorrow) dented sentiment

• The 55-day moving average at 11,098 looks as if it might continue to cap the recent upmove, as the slow stochastics momentum indicator turns bearish

• Euro-zone industrial production data for November is due today. It’s expected to decline 1.0% m/m and a worse number could suggest a near-term top is in place for German equities.

CN50USD Daily Chart

Source: OANDA fxTrade

• China shares rose four out of five days last week, the third weekly advance in a row, as trade talk hopes increased

• The 55-day moving average is at 10,916. The index has traded below this average since December 13

• China’s trade data for December are due today. Imports are expected to increase to 5.0% y/y from +3.0% in November, while export growth is seen slowing to +3.0% from +5.4%.