#FTSE #Japan It can be funny reading analysts, sometimes frantic, attempts to find a reason for a market movement. We witnessed this frenzy on Tuesday, world index growth being attributed variously, to “bond stimulus”, “interest rates”, “Gold reversing”, even the S&P nearly painting a new high. No one actually knew the root cause, perhaps it was just because it’s summer. Perhaps it was Russia coughing politely and mentioning they’re rolling out a vaccine for Covid-19!
But the opening paragraph from an article in the Telegraph rung true, perhaps indicating a greater reality.
Jeremy Warner, Telegraph editor, wrote;
“In money we trust, or maybe not so much these days. A rising gold price and weakening dollar can both be seen as signals that trust in sovereign currency could be going the same was as trust in Government, institutions, and mainstream political leaders.”
Despite the price of Gold crashing by more than 100 dollars since his article was published, the guy maybe has a point. One which will explain the constant flux in currency movements, index movements, crypto currency etc. Essentially there’s an awful lot of uncertainty at present, doubtless ‘Covid-19 provoked’ due to hesitation over economic recovery, 2nd waves, political competence, and of course what’s going to happen as schools return.
What surprises, despite all these reasons for nerves, was our article on the Euro vs The US Dollar in September last year (link). In it, we proposed criteria for the relationship to founder to 1.0635. On March 20th this year, 6 months after our original prediction, the pairing exactly hit our drop target. Importantly, the target was not broken and thus, suggesting further weakness. Instead, the relationship hit 1.0635 and bounced.
Despite deserving a “smarty pants” award for this prediction, we’re more interested in movements since our drop target was successfully achieved as it implied the presence of strength. Now, with the pairing flirting with the downtrend (Blue) since 2008, the price need only now exceed 1.190 to suggest the potential of further recovery to an initial 1.2169 with secondary, if exceeded, a visually sensible 1.2445. To be fair, we already suspect the pair shall head to 1.2445 in the fullness of time (remember, our grasp of timeframes is dodgy).
Only with closure above 1.2445 shall we believe the Euro is headed for great things as strong recovery looks inevitable.
To cancel the prospect on the immediate cycle, the relationship needs founder below 1.10 as reversal now to 1.0418 looks very possible as a future “bottom”.
FUTURES
Time Issued | Market | Price At Issue | Short Entry | Fast Exit | Slow Exit | Stop | Long Entry | Fast Exit | Slow Exit | Stop | Prior |
10:04:06PM | BRENT | 44.85 | ‘cess | ||||||||
10:07:00PM | GOLD | 1911.88 | Success | ||||||||
10:20:34PM | FTSE | 6144.92 | 6110 | 6042 | 6023 | 6184 | 6185 | 6217.75 | 6270 | 6124 | Success |
10:23:41PM | FRANCE | 4977 | Shambles | ||||||||
10:26:00PM | GERMANY | 12867 | Success | ||||||||
10:28:34PM | US500 | 3342.42 | Success | ||||||||
10:31:05PM | DOW | 27755 | Success | ||||||||
10:34:05PM | NASDAQ | 10942 | Shambles | ||||||||
10:36:30PM | JAPAN | 22720 | 22653 | 22545 | 22408 | 22760 | 22762 | 22844 | 23062 | 22653 | Success |
11/08/2020 FTSE Closed at 6154 points. Change of 1.72%. Total value traded through LSE was: £ 4,847,593,064 a change of 33.01%
10/08/2020 FTSE Closed at 6050 points. Change of 0.3%. Total value traded through LSE was: £ 3,644,538,945 a change of -12.52%
7/08/2020 FTSE Closed at 6032 points. Change of 0.1%. Total value traded through LSE was: £ 4,166,017,548 a change of -2.34%
6/08/2020 FTSE Closed at 6026 points. Change of -1.28%. Total value traded through LSE was: £ 4,266,025,733 a change of -25.48%
5/08/2020 FTSE Closed at 6104 points. Change of 1.13%. Total value traded through LSE was: £ 5,724,834,824 a change of 13.25%
4/08/2020 FTSE Closed at 6036 points. Change of 0.07%. Total value traded through LSE was: £ 5,055,051,224 a change of 18.31%
3/08/2020 FTSE Closed at 6032 points. Change of 2.29%. Total value traded through LSE was: £ 4,272,722,908 a change of -22.49%
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