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Equities in the red this morning after yesterday’s FOMC minutes indicated the US Federal reserve see the conditions for a first rate hike since the financial crisis ‘approaching,’ which presumably means they might not approach quite in time for September. Surprising, then, that markets aren’t partying at the prospect of cheap money for longer?
It would be were there not a plethora of other drivers pushing down on market sentiment – not least the idea that policy makers might soon have to abandon their insistence that monetary squeezing must come on the back of positive macro-data as crude oil plunges towards $30, all but drowning many a hope of 2% inflation.
The further we travel under current conditions, the greater the risk of market distortions and irresponsible borrowing. It could well become a case of weighing up the risk of action against that of inaction.
China continues to bear down while we note a possible case of competitive devaluation by the Kazakhstani government – which has completely removed its currency peg to allow markets and markets alone to value the Tenge. Fantastic news for its commodity exports – note KAZ Minerals (KAZ) up 20% this morning despite a poor earnings report.
Greek Pm Tsipras indicated that snap elections are likely in September as the German parliament ratifies a third bailout package – concerns will no doubt surface (they arguably already have) as to who will take the reins from Syriza and what effect that may have on proceedings.
UK 100 testing 6370 support, DAX at Feb lows 10600, Dow Jones futures heading south but some way off support around 17100, Gold bulls taking profits after the yellow metal hit $1142 early this morning.
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UK 100 testing support near YTD lows just north of early July lows; potential for 6370 support to coincide with the floor of a falling channel tracking March and early July lows while a break below this level likely to send the index negative for the year.
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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 testing support in the middle of a 3-month falling channel whose floor has held firmer than its ceiling. Is the market preferring a higher line of resistance connecting major peaks since April?
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 heading into a 1-month narrowing pattern. Potential for a bounce towards 17350 with falling highs potentially attainable if the level is broken. A pullback below support likely to find respite at 17200.
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 off this morning’s highs $1142, gaining support from currency volatility in Asia Pacific regions and regaining favour as a safe haven. A break above $1142 likely to put $1150 and $1160 within sight while continued profit taking could make this a tall order.
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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