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Equities are mixed this morning with European equities outperforming while Wall St. sits just below the waterline. It’s a cautiously optimistic return from a weekend that saw a number of fatal attacks in Germany and one in the US. Economics-wise, we’re due some central bank updates from the Bank of Japan (Friday, markets expecting more of the same…) and perhaps most importantly the US Federal Reserve (Wednesday, no change expected but markets eager to gauge the vocal tones of Fed officials) which should be keeping volumes somewhat light. Friday also sees the results of European bank stress tests which will be watched closely for any signs of weakness – particularly in the Italian banking system whose stocks have been in considerable trouble. It’s time like this that usually serve to confirm whether or not there are indeed any ‘bargains’ out there to be hunted down by traders!
Note too that we’re in for a busy week for corporate earnings with some 200 S&P 500 companies set to report, in addition to a host of UK 100 constituents. As is usually the case for both earnings and macro-economic updates, investors will pay close attention to the outlook (post-Brexit vote – see Ryanair – and following a slew of encouraging US data prints) and we’d thus expect past performance to have little say in share price moves. Oh alright, I’ll say it: EVENT RISK!
The UK 100 is testing resistance in an ascending triangle pattern that could lead to a breakout towards 6800. The DAX 30 is nearing 16-month falling highs, from which it’s had the propensity to sell off during that time. Dow Jones futures are still looking toppy near their all-time highs – likely awaiting Wednesday’s Fed update. Gold is heading towards support which could form the neckline of a resurrected bearish head & shoulders top formation.
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The UK 100 is still in its 2-week trading range, though testing resistance 6740 once more this morning. The RSI is also testing 10-day falling highs which could bode well for bulls looking for a breakout from an ascending triangle pattern.
Watch levels: Bullish 6760, Bearish 6680
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 DAX30 is making encouraging progress to test the ceiling of its rising wedge, supported by the 20-period moving average. RSI not yet overbought.
Watch levels: Bullish 10280, Bearish 10115
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
Wall Street/Dow Jones futures remain near their all-time highs with RSI and Momentum diverging bearishly with the price, the latter having dipped negative while the former managing to stay just north of neutral. Note also a narrowing pattern bounded by the 50-and 20-period moving averages.
Watch levels: Bullish 18640, Bearish 18495
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
Gold is still under pressure having sold back from Thursday’s overnight high point and broken below the 200-period moving average. Note that, if gold breaks below $1310, there’s still potential for a bearish head and shoulders top to engineer declines towards $1250.
Watch levels: Bullish $1322, Bearish $1305
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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