Equities Attempting To Recover
Benchmark global equities are doing the best to recover this week despite the ongoing risk from the corona-virus outbreak. Last week, equities indices saw heavy losses as rising uncertainty dampened investor sentiment. This week, the spread of the virus has worsened with China confirming that over 20,000 cases have now been confirmed, with a death toll of over 400 people.
While the death toll continues to rise (and in China’s case has now surpassed the number of deaths from SARS) it seems markets are attempting to look beyond the threat. Indices in the US, European and Asia are all rallying this week. Trader chatter regarding the increased likelihood of further central bank easing to help buffer the economy is likely offering some support for equities at this point.
In the UK, the Pound has softened as UK and EU leaders clash over expectations regarding the trade negotiations due to take place with Johnson reaffirming his stance that the UK is prepared to leave negotiations without a deal if the terms are not satisfactory. The FTSE has been well supported in light of the weakness in the Pound.
DAX (Bullish above 13185.68)
From a technical viewpoint. DAX is now retesting the monthly pivot at 13185.68 along with the broken bullish trend line. This is a key technical level for near term price action. Rejection here will put focus back on the monthly S1 at 12735.26 while a break higher will target the monthly R1 at 13433.29 next.
S&P500 (Bullish above 3246.45 )
From a technical viewpoint. Price broke down below the bullish channel late last wee though is now attempting to move back inside the structure, having rallied above the monthly pivot at 3246.45. While above here, a push back towards the monthly R1 at 3315 is the next objective.
FTSE (Bullish above 7403)
From a technical viewpoint. Price has stormed back above the monthly pivot at 7403 this week following strong demand into the yearly pivot at 7295.3. With longer term VWAP supporting, a further push higher towards the monthly R1 at 7563.1 is on the radar.
Nikkei (Neutral, Bearish below 23131.3)
From a technical viewpoint. Price is attempting to climb back the monthly pivot at 23131.3. Above there, the next level to watch is the monthly R1 at 24102.6 continues. If price moves lower from here, however, we could see some support into cluster of support between the monthly S1 at 22860.8 and yearly S1 22303.
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