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Equities off their worst levels post the ECB policy update with many asking whether the sharp market sell-off was overdone, exacerbated by knee-jerk unwinding of crowded trades (EUR, USD, Equities) in anticipation of another stimulus bazooka. Does this represent a buying opportunity and second bite at the Santa rally? After all, the policy move was still towards a more accommodative stance just not quite as much as markets had been expecting.
Perhaps markets should take solace in the ECB’s faith in the region not needing as much stimulus as they were pining after, especially with the US Fed being in a comparatively luxurious position of being able to do the polar opposite and raise rates within 2 weeks. Is the growth/inflation outlook better than we realise? Are the central bank pair simply ahead of the curve?
UK Index found intersecting support at 6200 and already regained 6250. DAX also benefited from intersecting support to bounce of 10640. Wall St done the same at 17400 but Gold still held back by falling channel boundaries.
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UK 100 sell-off halted by intersecting resistance-turned-support going back to 9 September. Note recovery from RSI which just ventured into oversold. Potential for rally back to 6450 ceiling? Any drop below 6200 could mean a bearish flag pattern than completes around 6025 mid-Nov lows.
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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Germany’s DAX broke down from the bearish rising wedge highlighted yesterday, but support kicked in helpfully at intersecting trendline from end-August which keeps the uptrend alive. However, beware the possibility of this bounce being a pause before another leg down within a bearish flag 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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US Dow Jones futures also found support at intersecting trend-line (see how similar the indices can be) at 17400. While the sell-off reinforces the ceiling, the bounce maintains the uptrend from end-Aug lows.
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’s remains in its 3-week falling channel with a USD sell-off yesterday not even providing enough of a fillip for a breakout above falling highs at $1065. Fundamental reasons to own the safehaven remain very tarnished.
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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