As we head into February, January is ending how it began, with a bang. Markets rife with tension, big moves, and fundamentally filled news.

This week sees the GDP data from major EuroZone players, France, Spain and Italy, with the figures expected to show Italy has slipped into recession. The FED is giving us a rate decision, and Friday’s non-farm figures the first public report from the US since the government shutdown. Germany hopes to end a recent spell of disappointing growth figures, with a strong unemployment report.

Before the respective outcomes of the above, Tuesday evening saw some positive news from the UK in regards to Brexit. MPs voted for the PM’s proposal to change the backstop deal previously discussed with the EU, whilst rejecting the idea of extending the March deadline to reach a deal.

So with all this said, which markets could provide key opportunities this week?

DAX

With recent setbacks in the German economy, the DAX had been forming a long-term descending triangle, this was shortly halted, with rallies in the past week, however as we enter 11300 the markets have slowed at this resistance, Tuesday’s news from the UK created a Doji signaling reversal, the fact that the markets are overbought enforces the potential for this further. Bears could be lurking this week.

DAX-German-Stock-Exchange

GBPUSD

Sterling has strengthened against the dollar, with the recent US political calamity even overshadowing that of Brexit. However, with the shutdown ending, and a flurry of US data to be announced this week, this may change. The technicals say this pairing is overbought, so could this resistance of $1.32 hold firm, so far yes, but can we see further selling similar to the past occasions the ceiling wasn’t breached? Wednesdays post FOMC statement from Powell could be the starting point, heading into a jobs day many expect to be 160K.

GBP USD

Gold

After breaching $1,300 and reaching an almost 200 day high, Gold has been the big bull market with all the recent events in the US in particular. Similar to the above markets this week will be pivotal in whether this streak continues. Overbuying however could create an appetite for bears. Will they mangle markets and push this backdown, we should soon find out, starting on Wednesday.

 

Eliman Dambel

Senior Market Analyst
edambell@tvmarkets.com

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