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Market Outlook: A busy week ahead

For markets and politicians
June 11, 2018

After the fiasco that was the G7 summit in Canada last week, this week has the potential for lots of surprises.  Today we’ll pour over the fabulous photos from the summit.  Tomorrow we’ll have an historic meeting between the North Korean leader and the US President, something that has not happened since the Korean War.  Meanwhile UK PM Theresa May will slug it out in the House of Commons over Brexit legislation.  Wednesday the FOMC meets and is expected to raise the Fed Funds target by 25 basis points to 2 per cent.  Thursday the ECB meets and they just might say something about ending QE, while on Friday the Bank of Japan meets and can’t do anything as inflation targets are a woefully distant mirage.

Tech Week kicks off in London today and Mayor Sadiq Khan will reveal details of how he plans to make the city the world’s smartest in terms of technology.  His chief digital officer said that connectivity is a ‘vital utility’ for workers and residents of the capital.  Meanwhile City AM reports that of all the so-called unicorn tech companies (worth over $1 billion) in Europe, 13 of the 34 are in the UK, and are worth $23 billion.  They also suggest that there are another potential 51 British unicorns lined up.

DAX 30

An inside week last week, known as a pregnant pause, as the 50-day moving average is only fractionally below the 200-day one.

 

SHORT TERM TRADER:  Tiny short at 13145; stop above 13050.  Target 12400.

 

POSITION TAKER:  Short at 12935; stop above 13050.  Target 12000.

FTSE 100

A wasted week which ended up as a dragonfly doji denoting indecision.  The commodity channel index has turned down – but only just.  Tricky at the top.

 

SHORT TERM TRADER:   Tiny short at 7855; stop well above 7800.  Target 7400.

 

POSITION TAKER:  Small short at 7799; stop well above 7900.  First target 7400.

S&P 500

Momentum has turned quite bullish on last week’s rally but the MACD is unimpressed.  Still in retracement mode but nearing its limits.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:   Square.

BRITISH POUND/US DOLLAR

The follow-through last week from trend line support has not quite managed to turn the commodity channel index decidedly bullish, and other oscillators have yet to signal a buy.

 

SHORT TERM TRADER:  Tiny long at 1.3275; stop below 1.3300.  Target 1.3800.

 

POSITION TAKER:  Small long on at 1.3350; stop below 1.3275.  Target 1.4200.

EURO/US DOLLAR

A perfect morning star chart pattern has been completed over the last three weeks, a hammer candle at its centre and the ones either side of it mirroring each other.  If only the commodity channel index had turned bullish too.

 

SHORT TERM TRADER:  Small long at 1.1685; stop below 1.1700.  Target 1.2000.

 

POSITION TAKER:  Long at 1.1660; stop below 1.1600.  Target 1.2400.

GOLD

Stuck in the same grim little range for a third consecutive week yet bearish momentum has increased, surprisingly.    

                            

SHORT TERM TRADER:  Tiny short at 1294; stop above 1310.  Target 1265.

 

POSITION TAKER:  Square.