The EUR / USD was trading in the last hour was at 1.1410, USD / JPY went back to 109.30. Indices in Asia first grew slightly, then turn back, and attention was shifted from government shutdown to the next round of US-China trade talks. Chinese Shanghai Composite loses 0.2% and Japanese Nikkei225 fell by 0.6%.
On Monday, the 28th of January, the event calendar is light in important data releases, but there is plenty of speeches scheduled from today from ECB President Mario Draghi and BoE Governor Mark Carney.
SP500 analysis for 28/01/2019:
The US budget was released until February 15, and the parties will negotiate on the financing of the wall at the border with Mexico. If the agreement is not reached, the government shutdown will be resumed. Trump also suggested that he could declare a state of emergency (then the funds for the construction of the wall would be drawn from the Pentagon's budget). Despite the important change, the markets do not see a clear change of sentiment, neither on Friday at the end of trading on Wall Street, nor this morning in Asia. The US remains weaker, which, however, looks like giving back some of the strength from the previous week.
Let's now take a look at the SP500 technical picture at the H4 time frame. The market has broken above the 61% Fibonacci retracement of the last swing down and made a local high at the level of 267.01, just below the technical resistance at the level of 269.00 - 269.82. The momentum remains strong and positive despite the overbought market conditions, so another leg up should be expected: first towards the technical resistance mentioned above and then towards the swing high at the level of 279.48. This would mean that all decreases from December 2018 will be erased and the market will be ready to continue the larger time frame uptrend.
The nearest technical support is seen at 259.24 - 258.57 zone and should not be violated during the local pull-backs.
