Weekly Market Analysis: December 28, 2020 - January 01, 2021

Weekly market analysis December 28, 2020 - January 1, 2021 will discuss market movements ahead of the new year 2021, and things that can affect the market ahead of the new year such as, the US Dollar currency had strengthened against several other major currencies in trading last week, the impact of Trump's insistence on not agreeing to the Covid-19 relief package plan. It is not clear why Trump changed his mind, but one source familiar with the situation said that several presidential advisors tried to urge him to give in and soften, because according to them there was no positive side to rejecting it, considering that it would only add to the chaos ahead of the end of Trump's term as US president on January 20. News that Trump had signed the Covid-19 relief fund plan weakened the Greenback currency compared to other major currencies, in the Asian market movement earlier this week. This triggered market players to hunt for safe haven assets and stock indices. Gold prices moved up and managed to touch the psychological level of $1900/troy ounce, after Donald Trump signed the Covid-19 relief stimulus package of US $2.3 trillion, with the aid funds also useful for restoring unemployment benefits for millions of US citizens who have lost their jobs due to the Corona pandemic. In addition, the funds are also useful for avoiding a federal government shutdown earlier this week. One source said that the price of Gold has moved up more than 24% in 2020. The main reason is because for a long time the appeal of Gold as a safe haven has been considered anti-inflation along with the weakening of the currency as a result of stimulus measures in an effort to reduce the impact of the Corona pandemic. The pound sterling has the opportunity to strengthen against the US Dollar in Asian trading sessions earlier this week. This is due to the weakening of the US Dollar, the impact of Trump's approval of the Covid-19 relief stimulus plan. In addition, there is positive sentiment that the Brexit agreement will be reached.

1. Important Data/High Impact on Weekly Market Analysis 28 December 2020 - 01 January 2021

1.1 Prelim Industrial Production m/m (JPY)

Monday, 06:50 WIB. This data measures the change in the inflation-adjusted total value of output produced by factories, mines and utilities. It is a leading indicator of economic health - production reacts quickly to ups and downs in the business cycle and is correlated with consumer conditions such as employment and income levels. There are two versions of the indicator released about 15 days apart - the Preliminary and Revised. The Preliminary release is the earliest and tends to have the greatest impact on market movements.

1.2 Goods Trade Balance (USD)

Wednesday, 20:30 WIB. This data contains trade in goods which accounts for about 75% of total trade, and therefore provides early insight into the Trade Balance data which is reported about 5 days later. A positive number indicates that more goods were exported than imported. This data was released early in July 2015.

1.3 Manufacturing PMI & Non Manufacturing PMI (China)

Thursday, 08:00 WIB. Manufacturing PMI, This data is a leading indicator to measure the health of a country's economy, where businesses react quickly to market conditions, and their purchasing managers may have up-to-date and relevant insights into the company's outlook on the economy. A reading above 50.0 indicates industrial expansion, below 50.0 indicates contraction. Tends to have a bigger impact when released close to the Caixin Manufacturing PMI because the reports are closely correlated. China data can have a wide impact on currency markets due to China's influence on the global economy and investor sentiment. Non Manufacturing PMI, This is a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers may have up-to-date and relevant insights into the company's outlook on the economy. Above 50.0 indicates industrial expansion, below indicates contraction. China data can have a wide impact on currency markets due to China's influence on the global economy and investor sentiment.

1.4 Unemployment Claims (USD)

Thursday, 20:30 WIB. This is the number of individuals who filed for unemployment insurance in one week. This is the earliest economic data, which will impact the market and fluctuate from week to week. Although generally viewed as a less valid indicator, the unemployment rate is an important signal of overall economic health because consumer spending is highly correlated with labor market conditions. Unemployment is also a key consideration for Central Banks that direct monetary policy.

2. Technical Review According to Weekly Market Analysis December 28, 2020 - January 01, 2021

2.1 EUR/USD

 

2.2 USDCHF

 

2.3 GBPUSD

 

2.4 USDJPY

 

2.5 Gold

 

2.6 AUDUSD

 

2.7 Oil

 

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