At yesterday’s emergency, mini-summit meeting of 16 EU leaders in Brussels to discuss migration (ahead of a proper summit of the European Council on 28-29 June), on arrival Chancellor Merkel said, ‘’we know that at the European Council, unfortunately, we will not have a complete solution of the migration issue’’. Therefore, she will look to cut deals directly with separate EU states. She added, ‘’there will be bilateral and trilateral agreements, how we can help each other, not always wait for all 28 members’’.
The Trader is taking a short mid-week break and will be back on Friday 29th June.
DAX 30
Closing below this Spring’s support at 12600 with a bearish engulfing weekly candle and the commodity channel index turning down – adding weight to our view that we are potentially forming the right shoulder of a very large head & shoulders top. Note that today City AM reports that the German asset managers’ association – BVI – has called for ‘unhindered access’ to investment services provided in the UK, including clearing and trading because ‘the importance of such access will significantly increase in the event of Brexit’.
SHORT TERM TRADER: Short at 12955; stop well above 12800. Target 12200.
POSITION TAKER: New short on Friday’s close at 12550; stop well above 13000. Target 11900.
FTSE 100
Still struggling badly at current levels with a dragonfly doji last week close to the top of a potential broadening top massive chart pattern. The commodity channel index has turned down but momentum is not bearish. In a survey of 366,000 people by Boston Consulting Group London once again beat all other major cities as a top destination for overseas workers – though Britain as a whole dropped from 2nd to 5th place, behind the US, Germany, Canada and Australia.
SHORT TERM TRADER: Short at a couple of levels; stop above 7800. Target 7400.
POSITION TAKER: Small short at 7799; stop well above 7800. First target 7400, then 7100.
S&P 500
Retreating for a second time this year from Fibonacci retracement resistance at 76.4 per cent. The last 3 weekly candles make up a tiny, slightly lopsided, evening star combination hinting at another interim top, as does the commodity channel index.
SHORT TERM TRADER: Short at 2735; stop above 2800. First target 2680.
POSITION TAKER: Square but looking to sell on stronger chart patterns.
BRITISH POUND/US DOLLAR
Small crumbs of comfort with a perfect little doji on the weekly chart at the 50 per cent retracement level. This adds weight to our theme that May’s drop in cable is a correction to the previous big rally.
SHORT TERM TRADER: Tiny long at 1.3295; stop below 1.3100. Target 1.3740.
POSITION TAKER: Square.
EURO/US DOLLAR
A potential double bottom at 1.1500, just ahead of the 50 per cent retracement support level, as the commodity channel index turns up – all suggesting the euro is trying to form an interim base to the corrective drop this spring.
SHORT TERM TRADER: Long at 1.1655; stop below 1.1500. First target 1.1850.
POSITION TAKER: Square.
GOLD
Settling on Friday exactly on long term trend line support at 1270 despite fairly strong bearish momentum. This instrument continues to be very hard work.
SHORT TERM TRADER: Square
POSITION TAKER: Short at 1298; stop above 1285. 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.
