Sage Investment Club

Trading Leveraged Products is risky

Markets are back to full-time today to kick-start 2023 with a key week topped by NFP data on Friday and undermined by the ongoing rise in Covid cases and deaths in China Japan and New Zealand remain closed today, but in Asia the ASX (-1.3%) is the laggard whilst Chinese bourses are on a firmer footing (Shanghai Comp +0.8%, Hang Seng +2.1%), despite weaker manufacturing PMI data from Caixin (49.0 vs 49.4).  In FX markets JPY is the notable gainer across the majors (USDJPY -0.77% @ 129.50 and 6-mth lows earlier) and the USD is receiving a bid as European markets get into full swing (EURUSD at 1.0570 from 1.0675).

  • The USD Index remains capped by 103.50 today as the USD softens in early new year trading.
  • EUR – rotates at 1.0570 now, having spiked to 1.0710 on Monday but unable to hold this key round number.
  • JPY – moved lower again as the pivot from the BOJ becomes more baked-in to market thinking, the key 130.00 was breached earlier for the first time since June 2022.
  • GBP – Sterling holds significantly over 1.2000 at 1.2070 in the first London trades of the year.
  • Stocks – European and UK FUTS are higher and the US500.F trades at 3872 now, up from the 2022 close for the cash market at 3839.50.
  • USOil – Rallied to breach and hold $80.00 yesterday and trades at $80.70 now. 
  • Gold – Has taken another leg higher today on USD weakness, continued CB rate hikes and subdued economic outlook. Breached $1830 in early trades and is testing the next resistance at $1850 now. 
  • BTC Sentiment woes continue – the biggest coin trades at $16.7k today. 

Today German CPIs, Turkish CPI, UK & US final MFG PMI, US Construction Spending.

Biggest FX Mover @ (07:30 GMT) EURJPY (-0.79%) into fourth consecutive day lower from 143.00 thighs last week to 138.30 today. MAs aligned lower, MACD histogram & signal line negative and falling. RSI 24.10 OS and still falling, H1 ATR 0.350, Daily ATR 1.823.

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Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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With over 25 years experience working for a host of globally recognized organisations in the City of London, Stuart Cowell is a passionate advocate of keeping things simple, doing what is probable and understanding how the news, charts and sentiment work together to provide trading opportunities across all asset classes and all time frames.

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