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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Daily Market Overview and Strategy 14 January 2025

Article By: ,  Market Analyst
Today 9:31 AM

Daily Market Overview and Strategy - January 2025

Global Market Update

  1. US Treasury Yields Surge:
    • 10-year Treasury yields hit 4.805%, a 14-month high, sparking investor concerns over inflation and the future of Fed rate policies.
    • Strong US payroll data reduced expectations of near-term rate cuts, fueling market uncertainty.
  2. Tech Sell-off Spreads to Asia:
    • US technology stock weakness extended to Asian markets.
    • Japan’s Nikkei dropped 1.5% amid global investor anxiety.
  3. Dollar Strength:
    • The dollar index reached a two-year high before easing slightly.
    • Strong economic data supported its rise, though investors remain cautious ahead of US inflation data.
  4. Oil Prices Surge:
    • Brent and WTI crude prices are up over 8% YTD, hitting a 5-month high.
    • Supply concerns were driven by:
      • Declining stockpiles in the US (Cushing, Oklahoma, at their lowest since 2014).
      • Harsh winter forecasts in the US.
      • Tightened sanctions on Russian energy exports and insurance companies.
  5. Political Developments in Europe:
    • France’s 2025 budget debate, with focus on pension reforms, raised political uncertainty and drove French debt risk premiums to 12-year highs.

 

Corporate News

  • US Tech and AI Restrictions:
    • Further export restrictions on AI chips and technology targeting China.
  • TikTok Ban Progress:
    • US Supreme Court appears likely to uphold a potential TikTok ban, citing national security concerns.
  • Apple Market Share Decline:
    • Falling iPhone shipments in China led to a 2.4% drop in Apple stock.
  • M&A Activity:
    • Johnson & Johnson plans to acquire Intra-Cellular Therapies for $14.6 billion.
  • Amazon Service Closure:
    • “Try Before You Buy” for Prime members to end by January 31, 2025.
  • Crypto Market:
    • Bitcoin fell below $91,000, raising concerns at the $3.2 trillion market support level.
    • BlackRock launched a Bitcoin ETF in Canada.

 

Economic Calendar:

  • USA:
    • PPI Data: Key indicator of inflation.
    • EIA Short-Term Energy Outlook: Focus on oil price drivers.
    • Federal Budget Balance for December.
    • FOMC Member Williams Speaks: Possible monetary policy insights.

 

DAX Technical Analysis

  • Trend Overview:
    • The DAX remains in an uptrend with bullish momentum.
    • Trading above key moving averages (50, 100, 200 EMA) supports long-term sentiment.
  • Key Levels to Watch:
    • Resistance: 20,525.3 (previous swing high).
    • Support: 20,158 (Fibonacci 0.786 level); 19,870 (Fibonacci 0.618 level).
    • A break above 20,525.3 could signal a continuation of the uptrend.
  • Indicators:
    • RSI: Mildly bullish at ~60.88; caution above 70.
    • Stochastic RSI: Overbought (~80.73); signals potential consolidation or pullback.
  • Outlook:
    • Bullish Case: Breakout above 20,525.3 targets new highs.
    • Bearish Case: Drop below 19,870 may signal a pullback to 19,667 or 19,465.

 

Actionable Strategy

  1. For Equity Traders:
    • Watch US tech sector for signs of stabilization post-selloff.
    • Traders might currently be watching the DAX levels of 20,525.3 where strong resistance lies historically according to the chart. If this resistance is breached a possible continuation might be in order..
  2. For Oil Traders:
    • Monitor Brent and WTI price action amid tight supply dynamics and geopolitical risks.
    • Short-term bullish bias, particularly if forecasts of colder US weather materialize.
  3. For FX Traders:
    • Focus on USD strength; evaluate the dollar's performance post-PPI data.
    • Watch for volatility in EUR/USD due to European political concerns.
  4. For Crypto Investors:
    • Cautiously assess Bitcoin's ability to hold above critical support levels.
    • Monitor the impact of BlackRock’s ETF on market liquidity and sentiment.
  5. Prepare for High Volatility Events:
    • If you are exposed to excessive risk and wish to hedge a portion of your account, it may be prudent to adjust stop-loss levels and position sizes ahead of US inflation data and Fed commentary.

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