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Equities are mixed this morning, after doubts were sewn in Asian markets concerning what the Bank of Japan has up its sleeve tomorrow – not as much as many hope, perhaps, or even nothing at all? With the Fed holding pat yesterday, not giving much away regarding monetary policy, and the Bank of England widely tipped to cut rates next week, might Kuroda & crew hold off on stimulus for the time being? A 2016 US rate rise is still on the cards and a dovish outlook in the UK could see any hawkish surprise there help to weaken the Yen by proxy, negating the need for aggressive stimulus from the BoJ.
Nonetheless, a weaker USD on diminished US rate hike expectations sees miners outperforming on the UK Index alongside those whose shares have reacted positively to this morning’s torrent of UK earnings announcements. At the other end of the index sits Lloyds Banking Group (whose attempt to impress by planning ahead seems to have backfired thus far) alongside SABMiller on shaky M&A grounds and Royal Dutch Shell, whose profits tanked by 70% on weak oil prices and whose outlook is further muddied by oil prices continuing to fall from their June highs.
The further the UK 100 moves into the apex of its rising wedge pattern the more toppy it looks. The DAX 30 is finding a significant hurdle at 10350. Dow Jones futures are in a falling channel from 20 July record highs and now below their 200-hour moving average. Gold is pausing around $1340 after confirming a breakout above $1335.
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The UK 100 now appears closer to a bearish breakout from its rising wedge pattern. The daily RSI is near overbought with bears eyeing potential end of week declines at least as far as the 20-day moving average 6669. Bulls confident rising support can hold to deliver the bullish breakout we’ve suspected all week.
Watch levels: Bullish 6765, Bearish 6733
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 still trending up towards the pre-Brexit levels in a 2-week rising channel, although it’s pulled back slightly from its early spike high and test of resistance to find support at 10315. A further pullback to the channel floor shouldn’t worry bulls.
Watch levels: Bullish 10360, 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.
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Wall Street/Dow Jones futures have sold off from the ceiling of a 1-week falling channel and gone below the key 18500 level. Bulls hoping rising lows since 26 Jul will help deliver a breakout.
Watch levels: Bullish 18525, Bearish 18480
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 now at the ceiling of a 1-week rising channel. Note a potential double top and RSI divergence could see declines back towards $1332.
Watch levels: Bullish $1345, Bearish $1337
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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