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Market Outlook: EU Ambassador to Moscow recalled

Backing Britain
March 23, 2018

A boost for Theresa May late yesterday when EU leaders agreed with the UK view that the most plausible explanation for the nerve agent attack in Salisbury was that Russia was responsible.  The PM added, ‘I look forward to further discussions with my European colleagues and I’m grateful for the solidarity and support they’ve shown the UK’.  German Chancellor Merkel added that the EU could take further measures.     

The revolving door at the US White House continues, yesterday with the replacement of HR McMaster as national security advisor with John Bolton, seen as an outspoken, right-leaning and potentially explosive appointment.  This will be the third man appointed to this role in the 14 months Donald Trump has been President.

DAX 30

The first daily close below 12000 this year confirms that bearish pressure had been building while we were in the holding pattern.  Note that the MACD turned negative on yesterday’s close. 

 

SHORT TERM TRADER:  Took profits at my 12000 target yesterday.  Will re-sell on a weekly close below here.

 

POSITION TAKER:  Will re-sell on a close below 12000 today.

FTSE 100

Bearish pressure has increased on yesterday’s close, by far the lowest this year.  This is the second leg of the retreat from the record high which has a measured target around 6700.  Then we’ll see.

 

SHORT TERM TRADER:   Small short at 7055; stop above 7100.  Just missed taking profits at my target at 6800; will cover here if I can today, if not will hold out for 6700.

 

POSITION TAKER:  Short at 7250; stop above 7155.  Will add on a weekly close below 7100.  Target the 6675/6700 area.

S&P 500

Hasn’t Mr Powell got off to a good start when he raised the Fed Funds target by 25 basis points to 1.50 to 1.75 per cent on Wednesday.  Recall that commercial banks have to pay an awful lot more than that for three-month money at the moment.  Technically we’ve had the first daily close well below trend line (from late 2016’s low) support.  A weekly one below it today would add considerable bearish pressure.  To potential losses one must add the currency effect of a weaker dollar.

 

SHORT TERM TRADER:  Took profits at target of 2620.  Will re-sell on a close below 2600 tonight.

 

POSITION TAKER:  Will go short on a close below 2600 today.

BRITISH POUND/US DOLLAR

Just as sterling strength has affected the FTSE 100, so too the Japanese yen, at its strongest in many moons, has led to a 4.5 per cent drop in the Nikkei 225 in just 2 trading days.

 

SHORT TERM TRADER:  Comfortably too profits at target 1.4100.  Will consider re-buying on a weekly close above 1.4200.

 

POSITION TAKER:  Small long at 1.3775; stop below 1.4000.  Target 1.4250 but might hold on if I think we’ll get a weekly close above 1.4200.

EURO/US DOLLAR

Trailing the best with zero momentum.

 

SHORT TERM TRADER:  Small long at 1.2267; stop below 1.2250.  Target 1.2500.

 

POSITION TAKER:  Small long at 1.2270; stop below 1.2250.  Target 1.2500.

GOLD

Clearly holding between well-established parameters.  Really must keep a closer eye on the commodity channel index.

                            

SHORT TERM TRADER:  Missed a chance to go long late Wednesday because the rally was so fast.  Square.

 

POSITION TAKER:  Square.

Nicole Elliott is a long-standing Member of the Society of Technical Analysts and has taken over the IC’s trading coverage.  She is regularly interviewed and quoted by the financial media, is a conference speaker, and author of several books on charting.