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Market Outlook: ONS surprise surplus

Rakes in £262 million

Data published yesterday by the Office for National Statistics showed the UK Treasury recording a surplus in March, £262 million versus a surplus of £407 million in February.  The better than expected data at the end of the fiscal year means that, for the first time since 2002, the current budget deficit (using only the cost of day-to-day spending, not investment) is in surplus.  Borrowing for the whole of 2017/2018 was £42.6 billion, lower than the Office of Budgetary Responsibility’s forecast which this coming year is expected to drop to £37.1 billion.  Treasurer Hammond said, ‘our economy is at a turning point with debt starting to fall and people’s wages rising’.

As French President Emmanuel Macron and his wife are on the 3-day state visit to the United States, he and President Trump shown holding hands at the White House, French regulators made waves with high-profile corruption probes, Bloomberg reports.  Yesterday the anti-bribery enforcers were uncharacteristically swift in marching billionaire Vincent Bollore to a police station for interrogation over business cases in Africa.  This follows ex-President Sarkozy who last month was told he would stand trial on corruption and influence peddling.

DAX 30

Retreating a little from the 50 per cent retracement level with a small bearish engulfing doji – which isn’t difficult after recent tiny daily ranges.  The commodity channel index has clearly turned down.  

 

SHORT TERM TRADER:  Small short at 12430; stop above 12650.  Target 12000.

 

POSITION TAKER:  Square.

FTSE 100

Another minuscule bearish engulfing candle at the Fibonacci 61 per cent retracement resistance level; the index was in overbought territory. 

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  Square.

S&P 500

US tech giants struggling a little yesterday while the broad index remains capped by the long-term trend line (which has now become resistance). The commodity channel index is negative.

 

SHORT TERM TRADER:  Small short at 2689; stop above 2725.  Target 2580.

 

POSITION TAKER:   Short at 2673; stop above 2725.  First target 2560.

BRITISH POUND/US DOLLAR

Trying to steady the ship against the 50 per cent retracement level and the commodity channel is also trying to put in an interim base.

 

SHORT TERM TRADER:  New small long at 1.3940; stop well below 1.3900.  Target 1.4300.

 

POSITION TAKER:  Small long at 1.4025; stop below 1.3900.  Target 1.4345.

EURO/US DOLLAR

Not quite oversold and back down at the lower range of this year’s ridiculously narrow range.

 

SHORT TERM TRADER:  Small long at 1.2205; stop below 1.2100.  Target 1.2465.

 

POSITION TAKER:  Square.

GOLD

Rubbish momentum as prices go nowhere.  Surprisingly some prominent major investors are making a song and dance about the outlook for gold being bullish; ask yourself, why?

                            

SHORT TERM TRADER:  Covered my short position at a small profit and now 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.