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.
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.
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.
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.