Santa rally continues as US stocks extend gains
The Santa rally continued as US futures pointed to a higher open. Futures tied to the Dow and S&P rose by 30 and 5 points. This happened as traders reacted to positive retail sales data. A report by Mastercard showed that retail sales in the holiday season rose by more than 3%. Another report by Amazon showed that national and international sales rose to record levels during the holiday season. In the United States, consumer sales are the most important part of the economy. US stocks have had a record year, with the Dow and S&P raising by 24% and more than 30%. In addition, the S&P has gained more than 50% during the Trump presidency. This is much more than the 23% average return of the past presidents’ three years into their terms.
The Japanese yen declined sharply after the country released housing starts data. In November, the housing starts declined by -12.7%. This was much lower than the consensus estimates of a decline of 8.1%. It was also lower than October’s decline of -7.4%. In addition to the weak housing data, the market also received weak construction order data. In November, order data declined by -1.2%, which was lower than October’s rise of 6.4%. These data come a few weeks after Shinzo Abe started a new $121 billion stimulus package.
The USD was relatively unchanged as traders received the initial jobless claims data from the US. The data showed that initial claims rose by 222k. This was better than the consensus estimates of 224k. Last week, the data showed that initial claims rose by 235k. The continuing jobless claims declined to 1,719k, which was below the previous 1,725k. The four-week average of initial jobless claims was 228k.
The USD/JPY pair rose sharply after the disappointing housing starts and construction data. The pair reached a high of 109.61, which is above the intraday low of 109.31. As the pair rose, it broke past the important symmetrical triangle pattern that was forming last week. The price is slightly above the 14-day and 28-day moving averages and slightly below the important resistance level of 109.68. The pair may continue to soar.
The EUR/USD pair saw little changed today as volumes remained relatively thin. The pair is trading at 1.1090, which is within the channel that it has been in for the past few days. In this channel, the pair’s support and resistance are at 1.1065 and 1.1095 respectively. The pair will likely remain in this channel before seeing a major breakout soon.
The XAU/USD pair rose today as traders started to focus on the coming year. Gold price is up by almost 20% this year against the USD. The pair is trading at 1505, which is the highest level since November 5. On the four-hour chart, the price is above the 14-day and 28-day moving averages while the RSI has been moving higher. The momentum indicator has continued to soar. The pair will likely continue rallying ahead of 2020.