EARNINGS: Microsoft Earnings Beat, Azure Growth Disappoints

The USD was weaker as Treasury yields fell with BBDXY falling to a low of 1300.63 but then recovering to finish up 0.1% driven by the US equity sell off, which also benefited the yen. 

• USDJPY trended lower through the European/US sessions to be down 0.7% at 156.80 after a low of 156.67 earlier. Bullish conditions remain though with initial resistance at 158.08 and support at 155.89.
• Commodity currencies were stronger against the greenback with CAD appreciating the most. USDCAD fell 0.4% to 1.4355.
• Aussie and Kiwi also strengthened with AUDUSD up 0.1% to 0.6220 after reaching 0.6247, the bearish trend persists though, and NZDUSD slightly higher at 0.5638 off the intraday high of 0.5664. AUDNZD is flat at 1.1033 after falling to a low of 1.1008.
• European FX underperformed with both the euro and pound down 0.2% against the US dollar at 1.0400 and 1.2548 respectively. NOK bucked the trend and was one of the stronger G10 performers helped by rising oil prices.
• Equities were weak with the S&P down 1.1% and Euro stoxx -0.6%. Oil prices are higher with Brent up 0.4% to $74.10/bbl. Copper fell 0.8% and iron ore is stronger rising above $101/t.
• Data today includes December South Korean CPI and China’s December PMIs.

• RES 4: 1.4578 2.0% 10-dma envelope
• RES 3: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
• RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
• RES 1: 1.4467 High Dec 19 
• PRICE: 1.4388 @ 16:13 GMT Dec 30
• SUP 1: 1.4336 Low Dec 20  
• SUP 2: 1.4269/4093 20- and 50-day EMA values 
• SUP 3: 1.4011 Low Dec 5 
• SUP 4: 1.3928 Low Nov 25 and a key support 

USDCAD bulls remain in the driver’s seat and the pair is holding on to the bulk of its recent gains. The latest pause appears to be a flag formation - a bullish continuation signal. Note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4508 next, a Fibonacci projection level. Initial firm support to watch lies at 1.4269, the 20-day EMA. A pullback would be considered corrective.   

• While the NYSE Group markets will close in observance of the National Day of Mourning for President Carter (New York Stock Exchange, NYSE American Equities, NYSE American Options, NYSE Arca Equities, NYSE Arca Options, NYSE Chicago and NYSE National), the CME Group has opted for early close, link HERE
• FI open outcry will close at 1300ET, GLOBEX shortly after at 1315ET.
• More to follow, but economic data expected that day is likely to proceed as normal (weekly jobless claims at 0930ET, Wholesale trade & inventories at 1000ET).
• Treasury auctions scheduled for January 9 remain uncertain (4- & 8W bills at 1130ET, 30Y bond re-open at 1300ET).