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Equities are positive this morning pumped up by the prospect of a bumper stimulus package from Japan to boost growth. The government is suggesting a whopping ¥28tn/$265bn of fiscal stimulus for early August which the Bank of Japan (BoJ) could add to with more monetary stimulus on Friday. Global central bank policy looks set to become even more accommodative, having already benefited equity markets (and bond prices) handsomely over the post-crisis years.
But it doesn’t stop there. The Bank of England (BoE) may cut interest rates and restart QE next week. The European Central Bank (ECB) is simply waiting for evidence of a Brexit impact and to see what peers do before it commits to more. Which leaves the US Federal Reserve (Fed) in a bind. It wants to hike rates but can’t; not while peers are moving in the opposite direction, their own currency-weakening action effectively delivering tighter US policy by sending the Dollar higher. So it’s unlikely the Fed can hike again before year-end at the earliest either. Which leaves equities grinning at the thought of even lower rates and even looser policy for even longer.
The UK 100 remains close to a bullish breakout at 6760, holding on to a solid July uptrend even if gains have slowed. The DAX 30 is testing the ceiling of a 2-week rising channel at 10330 with a revisit of 10500 looking increasingly likely. Dow Jones futures have bounced but already found resistance at 18830 in the form of breached support. Gold is still trying to engineer a bounce off 2-month rising lows at $1317.
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The UK 100 remains close to a bullish breakout at 6760, holding on to a solid July uptrend. The facs gains have slowed sees the Bulls cry ‘consolidation’ while the Bears say ‘toping out’. Who will win?
Watch levels: Bullish 6765, Bearish 6715
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 30 is testing the ceiling of a 2-week rising channel at 10330 with a revisit of 10500 looking increasingly likely. A short-term pull-back to the floor, however, wouldn’t be surprise .
Watch levels: Bullish 10355, Bearish 10310
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 have bounced from 18400 but breached support has already turned resistance at 18830 keeping us in a 6-day downtrend. Note the RSI still suffering from falling highs. Rolling over?
Watch levels: Bullish 18540, Bearish 18470
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 trying to engineer a bounce off 2-month rising lows at $1317. Close, but no cigar just yet. RSI bullish with positive divergence versus price.
Watch levels: Bullish $1323, Bearish $1315
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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