+44 points at 7507
+81 points at 12833
+39 points at 5302
+28 points at 3571
Global stock indices and futures made a positive start to the week. The Wall Street daily rolling index traded at a fresh record of $21,424.60, as France 40 rallied past 100 points since June 15th on the anticipation and the aftermath of the Macron-win. The FTSE rolling index tested the 200-day moving average (7505p).
extended weakness to $1,251. Traders are focused on $1,245 (major 61.8% retracement on May-June rise) and $1,238 (200-day moving average) in the continuation of the June’s downside correction.
It is an important week for Chinese stocks, as MSCI announces whether China’s 6.8 trillion yen worth onshore stock market will finally be part of its global benchmarks, MSCI China and MSCI EM. Chinese stocks were turned down three times before, mostly due to capital controls, trading restrictions and pauses. A fourth rebuff could squeeze the mainland stocks later in the week, traders should remain alert to higher volatility and downside risks. Hong Kong stocks (+0.94%) outperformed the (+0.73%) at the early hours of trading.
Japanese stock markets started the week on a positive note. (+0.61%) and (+0.62%) gained as softened on surprisingly soft May trade figures. Japanese unexpectedly turned negative in May, fell from 481.1bn to -203.4bn yen, versus 43.3bn yen expected by analysts. grew less than estimated and were unexpectedly higher as the yen strengthened by 4.45% during the second half of the month.
Soft data may revive the Bank of Japan (BoJ) doves before the release of the last week’s due on Wednesday. Stagnant US yields could however cap the upside potential in USD/JPY. Resistance is eyed at 111.40-112.15, area including 50, 100, 200-day moving averages and 39.2% retracement on January-April decline).
London woke up to another sad day on news that a vehicle hit pedestrians past mid-night near the Finsbury Park. Tragic news amplify tensions in the UK politics as the Brexit negotiations formally begin today, with Theresa May having secured no coalition after losing the majority government on June 8 snap election. started the week downbeat and traded between 1.2744 and 1.2798 in Asia. The pound remains rangebound against the between 1.2658 / 1.2824 (100-day moving average / minor 23.6% retrace which has acted as double top resistance in June).
A positive breakout should see intermediate resistance at 1.2980 (June high) and 1.3000 (psychological level) before the critical mid-term resistance, 1.3044 (major 38.2% retrace on post-Brexit sell-off). A negative breakout could encourage a further slide to 1.2577 (50% level) and 1.2536 (200-day moving average).
The saw its 50-day moving average crossing above the 100 and 200-day moving averages. The formation of golden cross could limit the euro’s downside against the pound this week, revive buyers for a recovery to 0.8868 (June high), before 0.8897 (major 61.8% retrace on September-April decline). Solid resistance is eyed at this level, due to the surprise hawkish shift from the (BoE) at the June monetary policy meeting.
In France, President Emmanuel Macron gained a historical majority in the second round of the parliamentary election in Sunday. Macron’s one-year-old République en Marche secured 350 seats in 577-seat National Assembly. Although Sunday’s election outcome has been the best performance in more than 15 years, there was no such enthusiasm due to the all-time low participation rate of 44%, which is 10% lower than the preceding historical low. As a result, Macron-win had little-to-no impact on the euro markets at the open. The fluctuates near the 1.12 mark, mid-way between the solid 1.1300 resistance (Trump Election Day peak) and 1.1123 (minor 23.6% retracement on April-June rise, which was significantly reinforced by Macron’s election as President of France).
Today’s light economic calendar hints at the continuation of the established trading trends. FOMC member ’s and German Bundesbank’s (Buba) President ’s speeches will be the main highlight of the session.
Quick glance at technicals on LCG Trader:
intraday: upside prevails. Long positions above 0.7245 (pivot) with targets at 0.7300 and 0.7320 in extension. Below 0.7245, downside potential to 0.7225 and 0.7200.
intraday: bias remains bullish. Long positions above 141.00 (pivot) with targets at 142.30 and 142.75 in extension. Below 141.00, downside potential to 140.55 and 140.00.
(WTI) (N7) intraday: bias remains bullish. Long positions above 44.42 (pivot) with targets at 44.95 and 45.20 in extension. Below 44.42, downside potential to 44.15 and 43.75.