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  • Gold prices gain as potential systemic risks out of China's Evergrande Group roil broader markets. Meanwhile, iron ore is ticking higher after a big drop on Monday as China steps up steelmaking curbs. Get your market update from @FxWestwater here:https://t.co/l4kAWDJ2wm https://t.co/b9m5ADIqqb
  • Gold remains higher despite positive Evergrande news out of China. Meanwhile, copper bulls are pushing prices upward as the potential for a housing crisis in China ebbs. Get your market update from @FxWestwater here:https://t.co/TK3MNntBdA https://t.co/14UKjR4w6M
  • GBP/USD has flattened overnight after its strongest rally in a month on Thursday. The British currency has been under pressure recently as an energy crisis has caused a number of gas providers to go bankrupt. Get your market update from @HathornSabin here:https://t.co/3D8s2eIVWv https://t.co/JDGNwKYyOn
  • Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. Learn about the shooting star candlestick and how to trade it here: https://t.co/mfwJ0sIauS https://t.co/JIT5it2HAt
  • Gold could suffer further near-term losses due to rising U.S. Treasury yields and a weak technical picture for price action. Get your weekly gold forecast from @DColmanFX here: https://t.co/g9QvH3L4It https://t.co/Vz98E0Bl9U
  • Gold has been trending lower after failing to clear resistance in the $1835 area earlier this month. Get your $XAUUSD market update from @DColmanFX here:https://t.co/3hm1g3BHgf https://t.co/MdTQKEBCBx
  • Key break here in the 10-year #Treasury yield as it rises to the highest since late June Took out 1.4230 resistance, and the 100-day SMA Eyes now on the 38.2% Fib extension at 1.4775 Also potential falling resistance from March https://t.co/4cI6l210ui
  • The move in rates after this week’s FOMC has continued and the 10 year yield has pushed up to a fresh two-month-high. Get your market update from @JStanleyFX here:https://t.co/CRWhuZ3sxD https://t.co/svHHqN2Zz8
  • S&P 500 contending with its proverbial ‘line in the sand’ as bulls and bears battle for directional control. How we close/trade around the 50-day moving average could serve as a noteworthy bellwether for risk trends headed into next week. I remain cautious below ~4,480. $SPX $ES https://t.co/qogkjs1Sx2
  • USD/JPY trades to a fresh monthly (110.57) amid the pickup in longer-dated US Treasury yields, and the exchange rate may stage a larger advance over the coming days. Get your market update from @DavidJSong here:https://t.co/dlNXOrJnM9 https://t.co/LCQd26W1zF
Global Markets Braced for Brexit Chaos and Italian Showdown

Global Markets Braced for Brexit Chaos and Italian Showdown

Justin McQueen, Strategist
SPX

Equity Analysis and News

  • FTSE 100 | Brexit Uncertainty to Persist, Key Support Tested
  • S&P 500 | 2700 Curbs Further Losses, Risk Barometer Points to Indecision
  • FTSE MIB | Italian Budget Showdown Continues

For more information, check out Justin's weekly webinar where he discussed the impact of Brexit and Italy.

Price

200DMA

RSI

IG Sentiment

Europe

FTSE 100

7013

7404

59

Mixed

DAX

11341

12333

57

Mixed

CAC 40

5025

5336

57

Mixed

FTSE MIB

18878

21716

55

-

US

S&P 500

2724

2761

59

Bearish

DJIA

25283

25080

58

Bearish

Nasdaq 100

6822

7136

41

-

Asia

Nikkei 225

21654

22485

42

-

Shanghai Composite

2679

2966

70

-

ASX 200

5730

6051

50

-

As of 1720GMT Nov 16th

FTSE 100 | Brexit Uncertainty to Persist, Key Support Tested

The political backdrop looks bleak for the UK as PM May struggles to bring her party together to support her Brexit plans. Unlike the Pound, this has not led to a large degree of strong selling in the FTSE 100. Partly because the sell-off in the Pound has eased the downside for the more internationally exposure FTSE 100. On the technical front, the 7000 level continues to provide firm support and curb the index of further selling. However, given the uncertainty over Brexit and with a leadership challenge potentially on the horizon, risks remain tilted to the downside. A break and close below 7000 can open a move towards 6950 with a larger move back towards the YTD low of 6840.

FTSE 100 Price Chart: Daily Time Frame (Nov 2017 – Nov 2018)

FTSE 100 CHART

Dovish Fed Dents Rate Hike Expectations

A flurry of cautious statements from key Fed Official has caught many by surprise with both US yields and Dollar slipping. Fed’s Powell and Clarida had both highlighted that US may face headwinds next year with signs of a slowdown in global growth, while fiscal stimulus effects fade. Now, while this will unlikely impact the December rate hike. Further rate increases going forward have come under question with money markets pricing at rate hikes from the Fed.

S&P 500 | 2700 Curbs Further Losses, Risk Barometer Points to Indecision

Having mentioned last week, the 61.8% Fibonacci Retracement of the October drop had been rejected, thus prompting renewed selling in the index. However, support at 2700 and 2690 (marks the 23.6% Fibonacci Retracement) is holding. Alongside this, the risk on/risk off barometer is notably off the lows albeit lacking firm direction, implies a period of consolidation in the near term.

Global Markets Braced for Brexit Chaos and Italian Showdown

Source: Refinitiv: Spread between SPDR Industrial Sector Select Fund and SPDR Consumer Staples Sector Select Fund

How to Trade the S&P 500

S&P 500 Price Chart: Daily Time Frame (Nov 2017 – Nov 2018)

S&P 500 DAILY CHART

FTSE MIB | Italian Budget Showdown Continues

Last week saw Italy yet again defy the European Commission and stick to its big spending budget plan, keeping the deficit target at 2.4%. Consequently, the EU will now decide whether to begin measures to discipline Italy through possible fines. As such, sentiment for Italian assets remain negative with banks likely to underperform amid further uncertainty. Focus for bears is the 18400 level, which has previously been defended.

FTSE MIB: Daily Time Frame (Nov 16 – Nov 18)

FTSE MIB DAILY CHART

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

Other Weekly Fundamental Forecast:

Oil Forecast – Crude Oil at Risk as OPEC Supply Cut Bets Undermined by Russia, US

Australian Dollar Forecast – Australian Dollar Can Hang On Again, But Downward Bias Remains

British Pound Forecast – Brexit Chaos Leaves Sterling Still Vulnerable to Whiplash Moves

US Dollar Forecast – US Dollar Aims Higher on European Turmoil, Fed Outlook Rethink

Gold Forecast – Gold Price Could Drive Higher After Dovish Remarks from Fed Officials

Chinese Yuan Forecast – Yuan May Retrace Amid Mixed Fundamentals, Resumed US-China Talks

Euro Forecast – EUR/USD Rate Rebound Vulnerable to Dovish ECB Account

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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