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Equity indices are back in the red, building on Asian losses as opposed to stateside gains. This after overnight data from Japan (Machine Orders plunged) and China (both CPI inflation and PPI deflation eased) painted a mixed picture about growth and inflation in the region and countered yesterday’s data bright spots. This offset oil sitting comfortably above $50 after another US stockpile drawdown, the Dow finishing above 18000 and the S&P flirting with 10-month highs. And while US dollar weakness from revised US rate rise expectations (see here for our latest thoughts on the subject) had been supportive of both commodities and Miners, it is only helping the former today. Furthermore, a greenback on the back foot continues to see Germany’s DAX underperform as its export contingent suffers via reciprocal Euro strength.
The UK 100 has broken below 6260 support which opens the door to a 60pt retrace via a bearish head & shoulder top pattern. The DAX30 has given up 200pts to re-test 10100 where it is yet to decide if it bounces or a breaks. Wall Street/Dow Jones futures have eased back from 18000, but recent lows and rising support at 17925 could help deliver the bullish head & shoulders reversal to April highs. Gold has turned back from $1266 falling highs resistance just shy of completing a bullish flag pattern.
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The UK 100 has broken below 6260 support which could – via a bearish head & shoulders top pattern – deliver a 60pt retrace to 6200 rising lows support. Watch whether the level now serves as resistance. A break back above 6265 would of course re-open the door to the longer term (6-week) bullish inverse H&S reversal pattern we have been highlighting of late.
Watch levels: Bullish 6265, Bearish 6230
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
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The DAX has fallen over 200pts to make a proper re-test of 10100 where it has yet to decide if it wants to bounce or break to deliver a similar 200pt move. Note the probe lower last week resulted in a strong bounce.
Watch levels: Bullish 10120, Bearish 10070
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
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Wall Street/Dow Jones futures have eased back from 18000, but if 17925 can hold up again (recent lows, rising support) this could help deliver the bullish head & shoulders reversal to April highs that we have been highlighting. A break below 17900 would likely put paid to said pattern.
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
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Gold, as warned, has seen falling highs resistance at $1266 turn the yellow metal back early, preventing it from completing a bullish flag to $1280. While a breakout could rekindle the pattern, a retrace to $1250 may be in order.
Watch levels: Bullish $1268, Bearish $1257
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
Click here for help with Support & Resistance Click here for help with technicals
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