US stocks gained sharply yesterday in a surprising trading session. The Dow added 1086 points, the biggest one-day gain in history while the S&P and Nasdaq moved higher by 116 and 360 points respectively. Among the biggest gainers were technology companies like Amazon, Facebook and Google that added more than $250 billion in market capitalization. The upward trend came after Donald Trump said that the recent slump created a good buying opportunity for investors. It also came after his advisor said that Fed Chair Jerome Powell’s job was 100% safe.
Yesterday, the price of crude oil rose sharply with the US crude and global benchmark gaining by 8 percent in what turned out to be the best day for the commodity in more than two years. There was no apparent news that led to the rise but most market participants believe that the recent slump was overdone. Recently, the price of crude has declined by more than 35% off the October highs as traders fear that increased supply and low demand will lead to lower prices.
Asian markets rallied following the footsteps of their American counterparts. All the three major indices in the region rallied sharply with the Nikkei, Topix and Shanghai jumped by 4%, 5% and 1% respectively. In Australia, the ASX jumped by almost two percent. The jump in these markets was further evidence of the synchronized nature of global markets. Today, while trading will remain thin, traders will pay close attention to the new home sales data and CB consumer confidence numbers from the US.
XTI\USD
After months of declines, the price of crude oil jumped sharply in yesterday’s session. The price reached a high of $47. Still, the price is lower by double digits from the previous high. The current price is above the 14-day and 28-day simple moving average and is between the middle and upper band of the Bollinger Bands. At the same time, the RSI has fallen slightly off the overbought level of 70 while the momentum indicator is at the highest level in weeks. As the momentum continues, it could lead the price to test the important support level of 50.
EUR\USD
After falling sharply yesterday, the price of the EURUSD pair rose sharply during the Asian session. The price moved from a low of 1.1342 to a high of 1.1390 ahead of key data from the United States. On the hourly chart, the price is along the 28-day and 50-day simple moving average. The bulls power has risen from the neutral level while the relative strength index has risen to the current level of 50. The pair will likely experience some volatility in today’s session as traders receive the final housing and confidence numbers for the year.
JPN225
The Nikkei rose sharply today to a high of 20127 yen, which is above the important 25.7% Fibonacci Retracement level and slightly lower than the 38.2% level. The price is also moving closer to the upper band of the Bollinger Bands as the momentum continues to rise on the hourly chart. The price will likely continue to react to the movements from the United States.
