Pre-Market Analysis and Chartbook: US Stocks Remain Stable Ahead of Key Events

Wednesday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,687 0.06%
DAX 30 11,300 -0.07%
WTI Crude Oil 51.09 -1.92%
GOLD 1,213 -0.13%
Bitcoin 4,194 11.28%
EUR/USD 1.1276 -0.09%

Financial markets are mixed with a slight positive bias amid the continued trade confusion, with investors trying to guess the likelihood of, at least, a draft agreement between the US and China this weekend on the G20 summit.

While European assets remains relatively weak, US stocks continue to be strong well on the heels of the better-than-expected Black Friday sales, the bullish seasonality, and the declining rate hike expectations. The rest of the week will likely be defining for equities and risk assets in general, starting with today’s speech by Fed Chair Jerome Powell.

S&P 500 Futures, 4-Hour Chart Analysis

The central banker, who has been once again attacked by President Trump for the Fed’s too tight monetary policies had a surprisingly dovish speech two weeks ago, and investors are eagerly waiting for a confirmation regarding Mr. Powell’s flexibility, ahead of tomorrow’s PCE Price Index and Fed meeting minutes.

The major US indices are trading near key resistance levels following the bounce of the recent days, but despite their relative strength a short-term trend change is not confirmed yet, even as a year-end short-covering rally still seems likely, especially should the G20 summit provide a positive outcome.

USD/JPY, 4-Hour Chart Analysis

The week’s slight risk-on shift is putting pressure on the main safe-haven assets, with both the Japanese yen and Gold losing ground in recent days. The Yen’s weakness is the most apparent against the Dollar that has been drifting higher compared to all of its major peers. The USD/JPY pair is now close to topping the 114 level again, while also nearing the upper boundary of a broader bullish consolidation pattern.

The Dollar’s rally, which hasn’t been stopped by the string of weaker-than-expected US economic releases so far, brought the broader Dollar index up to its recent 16-month high, and although the Greenback is flat so far today, the broader uptrend remains dominant in the reserve currency.

Europe Fails to Join Rally as Oil Remains Under Pressure

DAX 30 Index CFD, 4-Hour Chart Analysis

Although today, the second reading of the US GDP print came in below expected, matching the originally reported 3.5%, the major European indices continue to perform weaker than their US peers, with the DAX being among the weakest benchmarks in the developed world. The slightly worse-than expected German consumer confidence weighed on sentiment today, even as Theresa May showed surprising flexibility when she said that she would accept re-writes of the original draft Brexit plan. While the Great British Pound rallied on the news, European equities failed to show strength, and the common currency only ticked slightly higher.

WTI Crude Oil, 4-Hour Chart Analysis

Commodities are having yet another mixed and hectic session, with oil turning lower yet again amid supply worries regarding Saudi Arabia. The Kingdom wants coordinated effort from OPEC nations and Russia to stop the bleeding in the market, and the fact that the Saudis are hesitant to reduce supply on their own pushed the crucial commodity back towards the $50 per barrel level. While that’s bad news for the energy segment, the decline in US yields is likely connected to the steep fall in the price of oil.


Major Stock Indices

Nasdaq 100 Futures, 4-Hour Chart Analysis

Dow 30 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis


EUR/USD, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis


Gold Futures, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

Featured image from Shutterstock

Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.