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Market Brief: Nikkei 225, Hang Seng Index, AUD, and NZD Post Modest Gains Ahead of Christmas

Nikkei 225
Nikkei 225

The Nikkei 225 posted modest gains as it closed 4.5 points or 0.02% higher at 23,821.1. Meanwhile, the Hang Seng Index did slightly better with Hong Kong stocks up by 35.1 points or 0.13% at 27,906.4.

As for currency, AUDUSD and NZDUSD are both trading over 20 pips higher from their opening prices, trading at 0.6912 and 0.6615, respectively. Meanwhile, USDJPY is in the red by roughly 4 pips at 109.36.

Profit-Taking Before Christmas

Today is the last trading day before banks and traders take a break for Christmas. Some investors probably even took an early break from the markets which could explain why the Nikkei 225 and Hang Seng Index were flat. As for the dollar pairs, forex traders are probably squaring off their long USD positions ahead of Christmas.

Third-Tier Data from Japan and Australia Released Today

In today’s Asian trading session, only third-tier data from Japan and Australia were released. Japan’s All Industries Activity report for October showed a 4.3% decline in the total value of goods and services bought by businesses during the month. The figure was in line with market expectations. Meanwhile, in Australia, data on private sector credit fell short of the 0.2% forecast when it printed at 0.1%. This report indicates the total of new credit issued to consumers for December.

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EURJPY Outlook

On the daily time frame, we can see that EURJPY is currently testing support at the 50% Fib level (when you draw the Fibonacci retracement tool from the low of December 9 to the high of December 13). This price level, at 121.10, also coincides perfectly with the 200 SMA.

However, it’s worth noting that the currency pair still has some more room to move lower when you consider the rising trend line that you get from connecting the lows of October 8 and December 10. Reversal candles around the 121.00 psychological handle could indicate that EURJPY is on its way to re-test its December 13 highs around 122.60.

On the other hand, if support around this level does not hold, we could see EURJPY fall to around 119.70 where it made lows in November.