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Equity markets recovering from overnight lows after Fed Chair Yellen engineered an equity retreat from multi-week highs. While her suggestion that the US economy is ready for a rate hike will have appeased, her mention of any delay possibly resulting in the need for a faster pace of subsequent increases didn’t go down well due to the risk that it sends the nation back into recession.
Investors cautious ahead of the ECB policy update given the multiple fronts on which President Draghi can move (QE size, duration, composition; interest rates; forward guidance) which could make things complicated in terms of what is worth more/less to the markets and the DAX in particular. Will he deliver a January-like bazooka to promote inflation and growth or has US rate hike anticipation strengthened the USD (and thus weakened the EUR) to the point where much of his work has already been done?
UK Index rallying back to make another attempt towards 6450. DAX held back by resistance at 11400 and possibly breaking down from bearish rising wedge. Wall St still hindered by 17900 resistance, in sideways range. Gold downtrend taken it back to levels last seen in Feb 2010.
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UK 100 failed at 6450 yesterday and fell back below 6400 only to rebound strongly overnight. October highs remain a significant hurdle around 6450 before 6500 can be revisited.
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Possible support
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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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Germany’s DAX trying to reverse downtrend of last two sessions, helped by support from 200-day MA. 11400 remains major 9-month resistance. Still potential for breakdown from bearish rising wedge, especially if Mario disappoints.
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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US Dow Jones futures still trading sideways in 17700-17900 range, unable to break above early November resistance. Falling lows means potential for revisit of recent 17650 lows while blocked by horizontal highs.
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’s fell back to Feb 2010 lows around $1045 overnight, hindered by a strong USD. The prospect of a US rate hike also makes holding a zero -yielding asset difficult to justify, while safe-haven seeking, if any, is being done elsewhere. Bounce or breach
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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