Daily Forex Insight

Here are some insights from the currency strategists at dailyfx. They cover the fundamentals and technicals of key Forex pairs and other key markets along with some of the key economic news of the day. Today's commentary looks at why a weak currency doesn't necessarily imply higher stock prices?

Daily Forex Insight

Here are some insights from the currency strategists at dailyfx. They cover the fundamentals and technicals of key Forex pairs and other key markets along with some of the key economic news of the day. Today's commentary looks at the upcoming ECB meeting and China's GDP out later this week:

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning January 16

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2275, -0.10%	Neutral	Neutral
Nifty	8400, 1.90%	Neutral**	Bullish
China Shanghai Index	3113, -1.32%	Bearish	Bearish
Gold	1196, 1.94%	Bullish	Bullish
WTIC Crude	52.37, -3.00%	Bearish	Bearish
Copper	2.69, 5.66%	Bullish	Bullish
Baltic Dry Index	910, -5.50%	Bearish	Bearish
Euro	1.064, 1.05%	Bullish	Bullish
Dollar/Yen	114.49, -2.07%	Bearish	Bearish
Dow Transports	9202, 1.08%	Bullish	Bullish
High Yield (ETF)	36.78, 0.11%	Neutral	Neutral
US 10 year Bond Yield	2.38%, -1.57%	Bullish	Bullish
Nyse Summation Index	644, 11.64%	Bullish	Neutral
US Vix	11.23, -0.80%	Bullish	Bullish
20 DMA, S and P 500	2264, Above	Bullish	Neutral
50 DMA, S and P 500	2219, Above	Bullish	Neutral
200 DMA, S and P 500	2146, Above	Bullish	Neutral
20 DMA, Nifty	8164, Above	Neutral	Bullish
50 DMA, Nifty	8179, Above	Neutral	Bullish
200 DMA, Nifty	8292, Above	Neutral	Bullish
India Vix	14.38, -3.55%	Neutral	Bullish
Dollar/Rupee	68.15, 0.00%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	10	11
Bearish Indications	4	4
Outlook	Bullish	Bullish
Observation	The S and P 500 was unchanged and the Nifty rallied last week. Indicators are bullish. The Trump bounce is largely over. Time to watch those stops.
On the Horizon	Australia – Employment data, China – GDP, Canada – Rate decision, CPI, Euro zone – ECB rate decision, ZEW survey, U.K - CPI, U.S – CPI, Presidential inauguration
*Nifty	India’s Benchmark Stock Market Index
Raw Data	Courtesy Google finance, Stock charts, dailyfx.com
**Neutral	Changes less than 0.5% are considered neutral

The S and P 500 was unchanged and the Nifty rallied last week. Signals are bullish for the upcoming week. The FED rate hike is yet to be priced in and sentiment indicators are back in complacent mode. The sudden surge in the Yen is worrisome. The critical levels to watch are 2290 (up) and 2260 (down) on the S & P and 8500 (up) and 8300 (down) on the Nifty. A significant breach of the above levels could trigger the next big move in the above markets. You can check out last week’s report for a comparison. Love your thoughts and feedback.