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Market Outlook: UK construction slumps

Down 14 per cent

Data this morning from the National House-Building Council showed that UK construction firms started building 14 per cent fewer homes in the first quarter of this year as compared to this time last year; they registered for construction insurance with the association on 36,637 units.  The Beast from the East at work again, an effect that’s expected to crop up in today’s UK GDP data.

Today it’s the German Chancellor Angela Merkel’s turn to try and sway/woo/impress President Trump.  Styled as a ‘working visit’ her diplomatic corps are hoping for a better two days’ worth than last time around.

DAX 30

Still trying to cling to the mid-point of this year’s range.  EU finance ministers meeting in Sophia today have yet to finalise bailout plans for Greece.  The country’s problem is that economic growth has been persistently slower than creditors had forecast; so, who’s to blame?  

 

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

 

POSITION TAKER:  New short at 12400; stop well above 12650.  First target 11800.

FTSE 100

Overbought and trading at the mid-point of this year’s range.  EU Brexit negotiator Michel Barnier yesterday in Sophia rebuffed governor Carney’s earlier comments about the Eurozone needing the City of London and that they would not accept a special access regime. 

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  Square.

S&P 500

Bouncing just ahead of triangle consolidation’s lower edge - zero momentum though.

 

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

One can almost hear the wheels grinding as the market tries to form an interim base, as exemplified by the commodity channel index.

 

SHORT TERM TRADER:  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

Oh dear, mind the gap!  Tumbling through medium term support as yet again the ECB kept its target interest rate at negative despite incoming data ‘remaining consistent with a solid and broad-based expansion of the euro area economy’.  Today the Bank of Japan also kept its key rate negative, and at last has given up predicting when inflation will reach its 2 per cent target.

 

SHORT TERM TRADER:  Stopped out of my new long position in a jiffy.

 

POSITION TAKER:  Square.

GOLD

Support around 1310 acting as a magnet on prices.

                            

SHORT TERM TRADER:  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.