It’s Inauguration Day in the United States.
President-Elect Joe Biden will be sworn in as the 46th President of the United States.
Donald Trump will not attend the ceremony and flew out of Washington earlier in the day.
The recent events in the capital building caused some volatility in the markets.
Will the same happen again today?
Watch the video to learn more…
Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
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In this video, we’re going to look at the markets and look at how the inauguration of US President Joe Biden has affected things.
At the moment, we see a very strong push in the stock markets, which is causing a little bit of a risk-on move. In particular, the Nasdaq has risen quite significantly today, pushing and breaking above its previous all-time highs, this begs the question: How far can these stock markets go? How far will they go? Can we get any opportunities to buy the stock markets?.
Look at the weekly timeframe: we can see that the price is pretty much straight line-in at the moment through those highs. Even on the daily timeframe, the market trend has been nice, putting back into previous structure points and rallying from that point through there. What I’ve done is that I’ve looked at a key area and looked at where we could potentially buy the market, and Nasdaq is looking at the cleanest of the US stock markets at the moment.
I quite like the idea of buying if the price can come back down into this 12904 level and the reason I like the look of that one is that the price has recently found some support and resistance through this level. It’s almost like a high volume area through this point. The market has come back down, almost formed a little head and shoulders pattern there, rallied up, came back through, found resistance, broke through, then found support. There are multiple support and resistance points here, around 12904, and if this keeps straight-lining and we do start to see a pullback. I would expect this zone to be tested for some further upside. How does that affect our other markets?
We were looking at NZD/USD going into this week for potential opportunities on the short side of things. Now, we looked at the Kiwi as a potential downtrend. We looked at this four-hour. We pointed out 7166 as a key level to be aware of. The alerts have gone off for that, and we can see why the price has come back into this key area, here, spiked into it, and currently, we see a slight rejection. The problem I have with potentially getting short on this right away is that the stock markets are climbing. Typically, Kiwi would benefit from the stock markets moving higher and usually would gain significant strength on the back of that.
Do I particularly want to jump into a trade at this position whilst the stock markets are still rallying to the upside? Potentially, not. But what we’ll have to wait for is to see what happens in the next few hours because if the price on the stock markets starts to come down, then we could see the potential for NZD/USD to set up and see that US Dollar strength come back into the markets and see the price potentially push down towards these lows.
But there is another level that I quite like on Kiwi, which sits slightly above this level that we’ve talked about, which is in here at 71.83. This is a nice level. We do have the price touching this multiple times. We have the previous four-hour lows in there as well as an area of resistance. We could still see the market rollover, but what I’m thinking is we could get one more rally up into that area. Maybe even a rejection of this key area -7183, then the price to push back down towards these lows. Because if we are to see that the stock market reversal or at least the US Dollar starts to gain some strength, which is what we have been predicting for a while, then we should see some rejection here.
Now, if I go to the Nasdaq, again, we may want to watch for the potential reversal and close back within this zone. If we get that, then as I said, risk-off would probably come into the markets. We’d likely see Kiwi lose some strength in that scenario.
So, keep an eye on things. I do still like NZD/USD short, but be a little bit cautious about what’s happening now, and I hope you enjoyed this video update. I’ll speak to you soon.
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