European Open: Futures Point Lower, Gold Clings to Trend Support

The bearish sentiment on Wall Street last week has spilled over to Asian trade, with the majority of equity indices trading in the red.

Charts (5)

Asian Indices:

  • Australia's ASX 200 index fell by -60.4 points (-0.82%) and currently trades at 7,287.70
  • Japan's Nikkei 225 index has fallen by -73.7 points (-0.26%) and currently trades at 28,644.43
  • Hong Kong's Hang Seng index has fallen by -450.39 points (-1.61%) and currently trades at 27,554.29

UK and Europe:

  • UK's FTSE 100 futures are currently down -45.5 points (-0.66%), the cash market is currently estimated to open at 6,962.59
  • Euro STOXX 50 futures are currently down -25 points (-0.62%), the cash market is currently estimated to open at 4,010.77
  • Germany's DAX futures are currently down -84 points (-0.54%), the cash market is currently estimated to open at 15,456.31

US Futures:

  • DJI futures are currently down -299.15 points (-0.86%)
  • S&P 500 futures are currently down -27.75 points (-0.19%)
  • Nasdaq 100 futures are currently down -15 points (-0.35%)


Learn how to trade indices


Indices:

The Hang Seng was the worst performer and currently trades -2.00% lower. The ASX 200 fell to a 6-day low but pared early losses just above the 7241.5 low. And the Nikkei 225 fell -1.4% to retested its 200-day eMA for the second time in 7 sessions.

The FTSE 100 closed just above the June low at 7008.09 and printed a small Rikshaw Man Doji which showed a hesitancy to break immediately lower. However, the 20-day eMA capped as resistance on Friday and futures markets are in the red so it’s possible that we could see a break beneath 6948.63.


FTSE 350: Market Internals


FTSE 350: 4019.1 (-0.06%) 16 July 2021

  • 154 (43.87%) stocks advanced and 188 (53.56%) declined
  • 11 stocks rose to a new 52-week high, 13 fell to new lows
  • 75.78% of stocks closed above their 200-day average
  • 45.01% of stocks closed above their 50-day average
  • 16.81% of stocks closed above their 20-day average

Outperformers:

  • + 12.5%   -  GCP Student Living PLC  (DIGS.L) 
  • + 9.81%   -  Cineworld Group PLC  (CINE.L) 
  • + 3.15%   -  HomeServe PLC  (HSV.L) 

Underperformers:

  • -5.23%   -  Clarkson PLC  (CKN.L) 
  • -5.02%   -  Burberry Group PLC  (BRBY.L) 
  • -3.65%   -  Ferrexpo PLC  (FXPO.L) 


Forex:

The economic calendar contains no major market-moving events, but the tone of the session could again be dominated by the rise in covid cases. Friday’s risk-off tone spilled over to the Asian session overnight, with the Japanese yen and US dollar being the strongest currencies and commodity FX (NZD, CAD and AUD) the weakest.  

AUD/JPY broke beneath its 200-day eMA overnight and fell to a 5-month low. CAD/JPY followed suit and now sits at a 3-month low and we continue to monitor EUR/JPY for a break below 129.57.

GBP/AUD found support at its 10-day eMA and after reversing higher in trying to form a bullish engulfing candle o the daily chart. A break above the 1.8662 high assumes bullish continuation.   

EUR/USD is making hard work of lower lows and volatility is subsiding, so we’re open to the potential scenario that 1.1772 is a swing low and the pair could be vulnerable to a bounce higher. However, should the US dollar index (DXY) break above 92.85 then euro should break beneath that low.


Learn how to trade forex


Commodities: OPEC+ Agree on Output Raise

WTI prices fell over -1% on Monday after OPEC+ agreed to increase output. 70.00 and 69.77 are the next major support level for bears to conquer, although that note that a bullish hammer formed above 70.00 on Friday so there is a case for a technical bounce, especially if DXY falls to break above gap resistance.

Gold prices are holding above trend support, making it a pivotal level to monitor as the week progresses. Furthermore, TIPS (a proxy for real yields) are falling and concerns over the rise of cases of the delta variant which could be supportive of gold prices in a risk-off environment.


We can see on the four-hour chart that a bullish trend has been developing since the June low. However, the weekly chart produced a Rikshaw Man Doji and prices failed to hold above 1818.40 following a breakout above that level on Wednesday. We are therefore cognizant of its potential to break lower form current levels, and a break below the 200-day eMA assumes bearish continuation as it invalidates trend support. A break back above 1818.40 could see prices retest last week’s high,

Silver prices are under pressure. See today’s video for our analysis.


Up Next (Times in BST)

You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.


How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

More from Commodities

Disclaimer

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.