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Equities Turning Higher Again
Global equities benchmarks have started the week on a positive note with the four main indices tracked here all in the green as of writing. With the Dollar continuing to trade lower currently, equities have been given some reprieve with buyers stepping in to pick prices up off the recent lows suffered on the back of the correction seen last week.
Concerns over rising inflation, the Chinese regulatory crackdown on cryptos and commodities and the slide in crypto markets, had combined to send equities lower last week. However, on the back of a fairly muted set of FOMC meeting minutes, which offered little new information, the Dollar has taken another leg lower which has helped shore up sentiment in equities markets.
Globally, the focus is still on the reopening underway across many key economies. In the short term, at least, this is viewed as positive for equities, with many central banks reaffirming their commitment to keeping easing in place this year. However, inflation concerns have been the main source of market volatility this year and the prospect of a shift in central bank monetary policy remains a key headwind to further highs in asset markets going forward.
Technical Views
DAX
The DAX has broken above the 15486.96 level to trade fresh multi-year highs this week as the bull channel continues to extend. The MACD indicator has turned bullish again here, though the RSI is showing bearish divergence, warranting caution. To the downside, 14791.71 is the key support level to note.
S&P500
The S&P has recovered firmly off the 4028.50 lows with price now trading back above the 4182.50 level and retesting the broken bullish trend line. While above 4182.50 the all tie highs at 4236.50 will be the key hurdle for bulls. MACD has yet to flip bullish and the RSI is showing bearish divergence, warranting caution here.
FTSE
The FTSE found support once again at the test of the rising trend line and the 6895.6 level. While above here, the focus is on a further push higher though momentum has faded for now. MACD remains in bearish territory, though has flattened out, reflecting the loss of momentum. To the topside, 7137 and 7241 are the key levels to mark. Below 6895.6, 6806.5 is the next support to note.
NIKKEI
The Nikkei has rebounded off the bottom of the bear channel, finding support ahead of the 26932.1 level and is now trading back above the 28356.6 level. With the MACD having turned bullish here, the focus is on a further push higher towards the bear channel top and a retest of the broken bull trend line.
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.