European Open: Beijing Targets Gamers, EUR/GBP Coils Below August High
Matt Simpson August 31, 2021 1:08 PM
China’s share markets were lower overnight as video gamers below 18 now face a 3-hour weekly limit as part of the latest government crackdown.
- Australia's ASX 200 index rose by 33.1 points (0.44%) and currently trades at 7,537.60
- Japan's Nikkei 225 index has risen by 128.02 points (0.46%) and currently trades at 27,917.56
- Hong Kong's Hang Seng index has fallen by -365.37 points (-1.43%) and currently trades at 25,174.17
UK and Europe:
- UK's FTSE 100 futures are currently down -0.5 points (-0.01%), the cash market is currently estimated to open at 7,147.51
- Euro STOXX 50 futures are currently up 2 points (0.05%), the cash market is currently estimated to open at 4,200.80
- Germany's DAX futures are currently down -10 points (-0.06%), the cash market is currently estimated to open at 15,877.31
- DJI futures are currently down -55.96 points (-0.16%)
- S&P 500 futures are currently up 11.5 points (0.07%)
- Nasdaq 100 futures are currently up 6 points (0.13%)
Learn how to trade indices
Mixed trade for Asian indices
China’s equity markets fell on Tuesday after the government announced new rules which curbs citizens under 18 of playing more than 3 hours of video games per week. Tancent Holdings (0700.HK) fell over 2%, the China A50 traded -1.7% lower, the CSI300 fell -1.3% and the SSE composite trimmed -0.75%.
The ASX 200 is on track for its 11th consecutive bullish month, trading around 1.9% higher in August so far. Healthcare and technology sectors were the strongest of the session.
UK traders returns to their desks after a 3-day weekend and has gained 1.64% so far this month. Given the positive sentiment for equities following the Fed’s dovish stance at Jackson Hole, we see the FTSE’s potential to retest the 7200 handle.
Forex: New Zealand dollar pops higher
NZD was the strongest major (and only currency with any signs of volatility) overnight, and with no obvious driver. And this is despite business activity coming in softer for August, as New Zealand remain in lockdown. NZD/USD rose 0.6%, NZD/JPY was up 0.5% and NZD/CAD rose 0.57%. NZD/CHF hit our countertrend target by testing the upper trendline of its bearish channel. USD and CAD were the weakest majors.
EUR/GBP has been grinding lower overall on the daily chart, although the momentum shift following a false break of the April low earlier this month, now sees the cross amidst a countertrend move. Support has since been found above the 50-day eMA and prices are now coiling just beneath the August high in a potential continuation pattern. A break above 0.8594 assumes bullish continuation and brings the zone between the monthly R1 pivot, 200-day eMA and July high into focus.
The Conference Board release their consumer confidence survey at 15:00 BST, and it will be interesting to see if it plummets like the University of Michigan Consumer Survey did. If so, it could weigh further on the US dollar as it is another tick in the box for the Fed to delay tapering.
Learn how to trade forex
Copper is consolidating above the 50-day eMA but beneath 4.435 resistance. Like oil, we suspect a break higher although over the near-term remain unsure whether we’ll see a pause beforehand.
Gold rose around 0.3% overnight and printed a swing low at 1806.6. Whether this marks the corrective low remains to be seen but our bias remains bullish above 1800, and for a run towards 1830 - 1834.
WTI prices have rallied nearly 13% from the August low after finding support at the 200-day eMA. A gravestone Doji formed yesterday below 70.0 so it’s possible the rally may take at least a breather or retrace slightly. Yet given the dollar’s weakness then we currently anticipate prices to eventually break above 70.0.
Up Next (Times in BST)
How to trade with City Index
Follow these easy steps to start trading with City Index today:
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.