Following a volatile week, equities remain positive in 2023
Dow Jones Index
Many economic surprises last week saw the Dow Jones index experience a high level of volatility. The close on Friday was close to unchanged on the week as investors focused on technology stocks in the Nasdaq rather than large companies in the Dow Jones index.
The surprise smaller-than-expected rise in US official interest rates was welcomed by investors seeing the market touch the highs of 2023 again. While the much stronger than expected US employment figures had a mixed impact, as worried a strong US economy would result in higher interest rates.
This week's focus will be speeches by two US Federal reserve members on Tuesday and Wednesday. While the Federal Reserve is less worried about inflation pressures, the market will be interested to see how strong US economic data impacts interest rate policy in 2023. The failure at the highs of 2023 confirms the Dow Jones remains range bound, so waiting for a fall to buy the Dow looks to be the best strategy in the week ahead.
Resistance: 34360, 34500, 35000, 35500, 36000, 36500
Support: 33500, 33000, 32500, 32000
The Nikkei 225 strong uptrend continued last week as values rose to fresh highs in 2023. The strong US market is helping sentiment, but more importantly, the USDJPY held support at 128.00 and finished the week strongly.
The Nikkei index will likely trade sideways this week unless the USDJPY can overcome resistance at 131.50. However, the medium-term uptrend remains strong, so buying weakness remains the best strategy.
Resistance: 28000, 28300, 28500
Support: 27150, 27000, 26250, 25500, 25000, 24500