US AND EUROPEAN STOCKS RISE AS OMICRON WORRIES FADE

US futures tilted higher on Monday as worries of the Omicron variant eased. The Dow Jones index rose by more than 200 points while those linked to the S&P 500 rose by 10 points. The tech-heavy Nasdaq 100 index declined by more than 67 points. In Europe, most indices like the German DAX, FTSE 100, and CAC 40 rose by more than 0.50%. There will be some key companies to watch today. Kohls will be in the spotlight after an activist investor asked management to consider selling the company. Uber will be watched after the company lost a case about its business model in the UK.

The British pound rose slightly after strong UK construction PMI data. According to Markit, the country’s construction PMI rose to a four-month high of 55.5 in November from the previous 54.6. This increase was mostly because of the commercial construction sector, whose PMI rose to 56.5 in November. Housebuilding activity declined to 55.4. These numbers show that the UK business activity is doing relatively well. Just last week, data revealed that the country’s manufacturing and services sectors continued doing well. Still, there are concerns that the new Omicron variant will affect the recovery.

The EURUSD was little changed on Monday as the market reflected on the latest US jobs numbers. The data published on Friday revealed that the economy added 234k jobs in November while the unemployment rate fell to 4.2%. The pair wavered since there was no major catalyst today. In Germany, data showed that the country’s factory orders declined by 6.9% in October after rising by 1.8% in the previous month. Additionally, in the Eurozone, investor confidence declined sharply as worries of lockdowns remained.

EURUSD

The EURUSD moved sideways today. It is trading at 1.1300, which is a few points above the intraday low of 1.1273. On the hourly chart, this price has formed a descending channel that is shown in purple. This price is slightly below the upper side of this channel. It is also along with the 25-day moving average while the Relative Strength Index (RSI) is at the neutral level of 51. Therefore, the pair will likely remain in this range during the American session.

UK100

The FTSE 100 index rose as sentiment in Europe improved. The index rose to a high of 7,191, which was the highest level in about two weeks. It is along the upper side of the Bollinger Bands and the 38.2% Fibonacci retracement level. The MACD has also moved above the neutral level. Still, the index has formed a bearish flag pattern, meaning it could retreat sharply in the near term.

USDJPY

The USDJPY was also in a tight range today as there were no major events from the US and Japan. On the four-hour chart, the pair has formed a bearish flag pattern. It has also dropped below the 25-day moving average. It is also trading at the 38.2% Fibonacci retracement level. Therefore, the pair will likely break out lower.