Today’s trading action in the March YM futures contract could be summarised in a few words – the calm before the storm – as the week ahead is a minefield of significant releases and news items, any one of which could blow this market off course.
It was no surprise, therefore, to see the YM contract trade in an extremely narrow range, never moving beyond 13859 to the upside and 13803 to the downside before finally closing a meagre 15 points higher.
From a technical perspective the daily chart looks extremely strong, following the breakout of 22 January which saw the index power away from the last vestiges of price resistance in the 13500 area. The 13500 now provides the index with a solid platform of support below and should offer excellent protection to any pullback later this week.
The key items of news to watch include preliminary Q4 GDP in the US along with similar from Russia, Canada, Poland and Spain. The first FOMC statement of 2013 at which the FED is expected to confirm the continuation of the current QE program.
In addition there is also the manufacturing ISM in the US as well as various global PMI releases.
Markets can also expect some interesting policy speeches with Japanese Prime Minister Abe expected to outline his economic policies, which will no doubt refer to both the BOJ and the Japanese Yen.
And if this weren’t enough the week then rounds off with the Non Farm Payroll numbers.
By Anna Coulling