The Dow Jones Hits 30k as Trump Accepts the Transition of Power Must Begin | - International

  • The Dow Jones (US30) finally topped the 30k level for its first time in history, the S&P 500 (US500) made a partial new record high and the Nasdaq 100 (USTEC) appears set to retest its own record high.
  • Sentiment remained positive overnight for markets due to the optimism surrounding COVID-19 vaccines and news that Trump will proceed with the transition of power to Joe Biden. Of course, Trump has stopped short of actually conceding but it removes a dark cloud of uncertainty over markets as we enter a Santa’s rally season.
  • Gold (XAU/USD) continued to fall and came close to testing 1800, its lowest level since July.
  • Oil prices rallied and broke key resistance levels, with WTI on track for its most bullish month since May and now trades at its highest price since March.


Today’s Calendar Events (Times are GMT+11 Sydney)

  • No major economic data is scheduled for the Asian or European sessions today.
  • Without a catalyst we may find trading ranges to be less than average.
  • US data makes up the baulk of calendar events in the early hours of tomorrow, which brings US pairs and US indices into focus for news traders.


WTI (WTI): Bulls Break Above the August Highs

  • Yesterday’s bullish range expansion closed firmly above August’s high.
  • Traders could consider entering long during a period of consolidation within yesterday’s range or wait to see if a retracement respects the support zone around 43.85 (August highs and 38.2% Fibonacci level).
  • Whilst prices hold above support the bias is for a run towards 78.73.


Nasdaq 100 (USTEC): Tech Stocks to Play Catchup?

  • Whilst the Dow Jones is clearly enjoying the limelight at record highs, price action on the Nasdaq also looking increasingly bullish.
  • A double bottom formed at 11,815 to confirm support (demand) at this key level and range expansion has broken a correction line to suggest the next leg higher has begun.
  • A break above 12,100 assumes bullish continuation and for a re-test of 12,267 (October high) and the 12414 – 12480 range (November high and record high).


USD/NOK: Canary in the Coalmine?

  • Whilst the US dollar index (DXY) has held above key support, we note that USD/NOK and USD/SEK have broken their key support levels. If they are taking the lead, they may be the ‘canary in a coalmine’ indicator to signal a weaker dollar against FX majors.
  • With a daily close beneath yet support, traders could consider entering short on a period of consolidation within yesterday’s candle, or waiting for a retracement towards 8.9645 resistance.
  • A break above 8.8964 invalidates the bearish bias.


Watchlist Update:

NZD/USD: Removed from watchlist. USD strength resumed and risk-on sentiment pushed NZD/USD to fresh highs. We await fresh opportunities for long entries.

Gold (XAU/USD): Target reached around the 1790 – 1800 support zone. We prefer to step aside and week fresh opportunities after a period of consolidation.

DJIA (US30): Initial target around the 30,000 highs has been achieved. A break above yesterday’s high assumes bullish continuation with an open upside target.

Bitcoin (BTCUSD): A bullish engulfing candle on H4 formed between 18k – 19k. The bias remains bullish within the bullish channel although 18k can also be used to fine-tune risk management.

AUD/JPY: The target around the 77.00 high has been achieved. We prefer to step aside and week fresh opportunities after a period of consolidation.

NZD/JPY: The target around the 72.78 high has been achieved. We prefer to step aside and week fresh opportunities after a period of consolidation.

CHF/JPY: Removed from watchlist. Momentum quickly lost steam and prices returned back within its consolidation after a failed breakout.

USD/SEK: Prices have broken beneath 8.5527 support to signal a major breakout.

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