Swingový výhled 50. týden
Even though the Omicron variant is a new source of uncertainty, recent reports suggest that it should not have a devastating effect on the economy. And the stock indices were responding positively to this piece of hope last week by offsetting previous losses. The VIX fear index fell to 20 and the SP 500 approached an all-time high. The US dollar remains strong as it is supported by good data from the US economy.
Data from the US economy
The closely watched NFP data was reported from the labor market. This fell well short of expectations last week as the US economy created "only" 210,000 new jobs in November (expectations were for 550,000).
But the unemployment rate fell further and the latest jobless claims report confirms that the labor market is in very good condition. The number of new claims for unemployment benefits fell to 185,000 last week, the lowest level since 1969! That's a 52-year low. The continued decline in claims reflects the tight labor market.
Important news for the week ahead will be the inflation numbers and especially the Wednesday Fed meeting when interest rates will be decided. These are expected to remain unchanged. However, the tapering is expected to end more quickly and this could continue to support the US dollar.
The SP500 is still in a bullish mood
After the previous correction due to concerns over the Omicron variant, information from China gave the stock indices a kick last week because the central bank lowered the limit on required reserves at banks, which will bring more money into the economy. This is China's response to the expected bankruptcy of property developer Evergrande. A "booster" for stocks was also the information that the Omikron variant is so far showing only mild symptoms.
Figure 1: US SP 500 index on 4H and D1 chart
The uptrend on the SP 500 index is still in place and the support at SMA 100 on the daily chart has shown its strength. The price of the SP 500 has returned to the previous all-time high where resistance is around 4,700 - 4,740 range.
German DAX index
The ZEW Sentiment Index was reported last week at 29.9 (previous month 31.7) in Germany. Despite the deterioration, the overall reading is still positive and indicates optimism about the future development of the economy.
Figure 2: DAX on H4 and daily chart
From a technical perspective, the Dax has maintained strong support in the area near 14,900 - 15,000. There was a rise last week during which the resistance at 15,400 was broken. The nearest current resistance is then at 15,840 (on H4 chart) and the next one is at 15,960- 16,000.
The EUR/USD is consolidating in a downtrend
The euro continues to hold a correction in a downtrend. The strong dollar is a big influence on this move, as well as concerns over whether other countries in Europe will curb their economies due to the spreading Omicron variant. This risk is likely to be accentuated by the ECB next week when they decide on interest rates. Analysts expect the ECB to leave rates at current levels.
In terms of technical analysis, it is clear from the daily chart that the EURUSD is in a strong downtrend. However, there has been consolidation in recent days and there is also a hint of a possible trend reversal, which is indicated by the bullish setup on the H4 chart, with the EMA 50 moving above the SMA 100.
Figure 3: The EURUSD on H4 and daily chart
Support is in the area around 1.12. Current resistance is in the area between 1.136 - 1.1380. The next resistance is then at 1.1500.
The Canadian dollar strengthened
The Bank of Canada decided on interest rates, which as expected remained unchanged at 0.25%. The Canadian economy is doing well and the central bank expects inflation to stay at higher levels over the next year but it should fall towards 2% in the second half of 2022. Weaker oil continues to put pressure on the Canadian dollar.
Figure 4: The USDCAD on H4 and daily chart
From a technical perspective, the USDCAD pair broke the rising trend channel and bounced off resistance to the nearest support at 1.2610, where the USDCAD decline stopped last week. The break of the trend channel is a bearish signal. The EMA 50 and SMA 100 moving averages are also starting to form a bearish setup. The nearest resistance on the H4 chart is in the band near 1.2710 - 1.2730.
The GBPJPY is moving at strong support
The British Pound has seen significant weakness in recent weeks, due to both the central bank's failure to raise interest rates in November and Prime Minister Johnson's introduction of further restrictive measures against the coronavirus. However, the weakening of the pound has created some interesting opportunities
Figure 5: GBPJPY on H4 and daily chart
The GBPJPY is at strong support, which can be seen on the daily chart, and is in the area around 149.00. Thus, it is more than 900 pips to the highest peak which was in October at 158.10. The nearest resistance according to the H4 chart is at 151.00 -151.2.
In the next week, it will be important to watch the BoE which will decide on interest rates. If the situation around the Omicron virus variant calms down and the central bank emphasizes inflationary pressures and positive economic developments, this could provide an impetus to the upside. However, if the government sends the UK into a full lockdown before Christmas, which cannot be completely ruled out, the pound might weaken further.