FX leaves FTSE in limbo

FX leaves FTSE in limbo

Mike van Dulken & Henry Croft at Accendo Markets commented to clients this afternoon:

Equity markets are hovering just above breakeven as investors await the second round of Fed Chair Yellen’s Congressional interrogation, this time by the Senate Banking Committee. Oil has come off its weekly highs as IEA suggests OPEC members reopening the taps, compounding a higher and ever-rising US production. Commodities maintain a fingertip hold on gains inspired by earlier USD weakness and positive Chinese trade data overnight. Sterling is off its highs against the dollar, although it remains strong against the Euro, leaving the FTSE’s currency-sensitive names in limbo.

The FTSE 100 is engaged in a tug of war, with Financials (improved risk appetite), Telecoms (Ofcom BT-Openreach response), Glencore (extending breakout) and ULVR (EUR/USD weakness) being pitted against Pharma (AZN CEO defection?), Oil (global supply group), SGE (MCRO results read-across) and HSBA (remains strong). The DAX sees a rare situation where domestically focused stocks outperform exporters, with only Daimler (emissions cheating report) and Siemens markedly lower.

The FTSE 100 is holding above 7400 with potential for bullish triple bottom reversal complemented by a bullish flag towards 7500.  The DAX 30 is in a broadening pattern just shy of 12650 that could take it 150 points either way. Dow Jones Futures has turned back from 21550 having failed to match yesterday’s fresh record high. Gold has failed to overcome June falling highs resistance at $1225 in a clear 5-week falling channel.”

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Categories: News
Tags: alert

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