Asian Open Lower yields didn’t help US equities

Bond yields moved lower for a second session, but it wasn’t enough to turn around bearish momentum on Wall Street, despite a positive start to the session.

Charts (3)

Thursday US cash market close:

  • The Dow Jones Industrial fell -313.26 points (-0.89%) to close at 34,715.39
  • The S&P 500 index fell -50.03 points (-1.11%) to close at 4,482.73
  • The Nasdaq 100 index fell -201.386 points (-1.34%) to close at 14,846.46

Asian futures:

  • Australia's ASX 200 futures are up 17 points (0.23%), the cash market is currently estimated to open at 7,359.40
  • Japan's Nikkei 225 futures are down -290 points (-1.04%), the cash market is currently estimated to open at 27,482.93
  • Hong Kong's Hang Seng futures are up 97 points (0.39%), the cash market is currently estimated to open at 25,049.35
  • China's A50 Index futures are up 60 points (0.39%), the cash market is currently estimated to open at 15,559.52

20220121moversFX

The Nasdaq 100 once again led the major US benchmarks lower, falling over -1.3% despite gapping higher and trading up around 1% earlier in the session. The S&P 500 was down -1.1% and the Dow around -0.9%. Peloton (PTON) fell over 20% after reports said they were pausing production to cut costs. United Airlines (UAL) and American Airlines (AAL) were also lower after they warned cost were to remain high despite expecting to increase passenger flights from March.

Futures markets across Asia point to a weak start for the tech-sensitive Nikkei 225, although futures markets for Australia and China have opened higher, likely due to the latest round if easing measures from PBOC yesterday. 

EUR/JPY breaks out of bearish flag pattern

The euro was lower against all majors except the Kiwi dollar after the ECB’s December minutes reaffirmed their widely contested dovish view. EUR/USD formed a bearish engulfing candle on the daily chart and is also on track to form on the weekly.

20220121eurjpyFX

 

Euro explained – a guide to the euro

 

Among the euro crosses, EUR/JPY fell the hardest by around -0.5% and reached our initial target outlined in yesterday’s European open. Now the move has evolved it appears to be part of a flag breakout which projects a measured move to the monthly S1 pivot around 128.32. Given it currently trades around 129 which is a likely support level then we are on guard for a countertrend move initially. But if this is a flag breakout, we would not expect a strong round of bullish momentum before losses continue.

USD turns higher

The weaker euro allowed DXY to form a bullish engulfing candle on the daily chart at 95.52 support, which is constructive for the bull case. As is the fact we recently saw it rally from the September highs and reverse ack inside a lower keltner band. Dare we say it could now be headed for the highs around 97? Video to follow.

ASX200 touches a near-1-month low

20220121moversASXfx

The ASX 200 fell to a 19-day low yesterday, although it formed a Doji on the daily chart around a 61.8% Fibonacci level. And despite lower US equities the nearest futures contract for the S&P 200 is slightly higher. Assuming prices don’t selloff immediately at the open, we are on guard for a potential bounce over the near-term, yet our core view remains bearish below 7400 and for a move to the 7257 lows.

ASX 200: 7342.4 (0.14%), 20 January 2022

  • Materials (2.99%) was the strongest sector and Telecomm Services (-1.23%) was the weakest
  • 4 out of the 11 sectors closed higher
  • 7 out of the 11 sectors closed lower
  • 4 out of the 11 sectors outperformed the index
  • 130 (65.00%) stocks advanced, 59 (29.50%) stocks declined

Outperformers:

  • +11.2% - Northern Star Resources Ltd (NST.AX)
  • +8.92% - Evolution Mining Ltd (EVN.AX)
  • +7.46% - Chalice Mining Ltd (CHN.AX)

Underperformers:

  • ·-9.91% - Summerset Group Holdings Ltd (SNZ.AX)
  • ·-6.08% - Dicker Data Ltd (DDR.AX)
  • ·-3.88% - Uniti Group Ltd (UWL.AX)

Up Next (Times in AEDT)

20220121calendarAEDT

 

 

How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

  1. Open a Forex.com account, or log in if you’re already a customer.
  2. Search for the pair you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.
EUR/JPY

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account