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Market Outlook: Eurozone budget agreed

Angela Merkel has agreed to Emmanuel Macron’s demand for a common budget for the single currency union
June 20, 2018

The leaders of France and Germany agreed yesterday to set up a budget for the eurozone, starting in 2021, though there are no details of how much money is involved. Decisions will only be made later this year. They also agreed to beef up the European Stability Mechanism, a fund to help nations in the area temporarily struggling to balance their books.

The Wall Street Journal reports that in a scheduled re-shuffle next week General Electric will be dropped by the Dow Jones Industrial Average. What was once one of the bluest of blue-chips is likely to be replaced by Walgreens Boots Alliance, which some might say is not exactly an industrial firm.

DAX 30

Momentum has turned bearish and the double top at 13150 looks a little top-heavy, but has yet to complete with a daily close clearly below 12600.

 

SHORT TERM TRADER:  Short at 12955; stop well above 13200.  Target 12200.

 

POSITION TAKER:  Might re-sell on a completed double top.

FTSE 100

Skidding to our lowest level since early May, but managing to regain its composure by the end of the day.  Trouble is, we now have a hanging man on the chart – a bearish candle.

 

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

 

POSITION TAKER:  Small short at 7799; stop well above 7800.  First target 7400, then 7100.

S&P 500

Another index that’s stumbled suddenly but bouncing just ahead of the lower edge of the upward-sloping wedge formation.  Note that the MACD has just turned bearish.

 

SHORT TERM TRADER:  Short at 2735; stop above 2800.  First target 2680.

 

POSITION TAKER:   Will consider selling depending on Friday’s close.

BRITISH POUND/US DOLLAR

Very oversold again as we dip below 1.3200 for the first time since mid-November. 

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Holding up fractionally better than cable and not quite oversold.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

GOLD

Bearish momentum increasing a little again as we trade at the lowest level since mid-December, 1270, which happens to be very long term trend line support.  Therefore, allow for a little hesitation for the rest of this week ahead of a drop to the measured target from the triangle: $1267.    

                            

SHORT TERM TRADER:  Tiny short at 1294; stop above 1303.  Target 1267.

 

POSITION TAKER:  Short at 1298; stop well above 1310.  Target 1250.

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.