Summary:

  • Three pro-independence parties win in the Catalan election, euro slightly lower in the aftermath 
  • US Congress approves the short-term funding bill in order to avoid a government shutdown
  • Bitcoin (BTCUSD on xStation5) crashes to $13,000, other digital coins follow

The Asian session has been somewhat subdued as the major indices are hovering close to the break-even line just a while before the close. Moderate gains might be a response to quite the successful session on Wall Street yesterday where both SP500 (US500) and Dow Jones (US30) added roughly 0.2%. On the other hand, let us recall that European investors should be joyous as well due to the splendid performance of the major equity markets across the old continent on Thursday.

Moving on, it’s worth paying more attention to the FX market and the euro in particular as it slid a bit overnight following the fallout of the Catalan election. Having almost all votes already counted one may spot that the three pro-independence forces together make up as many as 70 seats and even as they have two seats less compared to the previous election in 2015 the number is enough to hold a slim majority (two seats above). Let’s pin down that Junts per Catalunya (Together for Catalonia) garnered 34 seats, left-republican ERC gained 32 seats while the anti-capitalist CUP won 4 seats. On the flip side, the anti-independence and pro-business Ciutadans (Citizens) was able to garner 37 seats in the 135-seat regional assembly. In the aftermath of the election regional ousted president Puigdemont hailed a winning comeback last night as the victory of the secessionist parties paves the way for potential independence in the future. Consequently, the common currency slumped to some extent overnight but the losses were already recouped.

link do file download linkThe EURUSD has tested a support located at a 1.1830 handle but it’s quickly rebounded. The nearest resistance might be found at around 1.1900. Source: xStation5

While the euro was on the back foot over the course of the past hours the greenback managed to wiped off its previous losses. The US currency could have gained momentum as the House averted a government shutdown risk narrowly passing a short-term funding bill. As a result, the deadline has been pushed back to 19th January. Let’s also add the bill was passed by 231-188 in the House and by 66-32 in the Senate.

link do file download linkBitcoin (BTCUSD) crashed overnight while other cryptocurrencies followed. Source: xStation5

The cryptocurrency bloc saw a severe sell-off during the Asian session which pushed the Bitcoin price as low as $13k. This barrier constitutes a pivotal support line and therefore bears could struggle to break it ultimately. However, once they manage to do so, it might result in a deeper pullback even toward a round $10k mark. Notice that from its all-time high Bitcoin has already erased over 30%. We’ll provide a more in-depth analysis on digital currencies later in the day.