EQUITIES: Eurostoxx 50 Futures Extend Recovery Off This Week's Low
A bull cycle in Eurostoxx 50 futures remains intact and the latest pullback appears corrective. The first key support to watch lies at 5654.19, the 50-day EMA. A clear break of the average would highlight a potential short-term reversal. This would open 5594.00, the Nov 26 low. For bulls, a resumption of gains would refocus attention on key resistance at 5825.00, the Nov 13 high. Yesterday’s price pattern is a bullish engulfing candle - a reversal signal. A pullback in S&P E-Minis has resulted in a breach of both the 20- and 50-day EMAs. This strengthens a short-term bear threat and signals scope for a deeper retracement of the recent bull phase between Nov 21 - Dec 11. Sights are on 6737.71, a Fibonacci retracement. Note that the key support and reversal trigger lies at 6583.00, the Nov 21 low. For bulls a resumption of gains would refocus attention on key resistance at 7014.00, the Oct 30 high.
- Japan's NIKKEI closed higher by 505.71 pts or +1.03% at 49507.21 and the TOPIX ended 26.77 pts higher or +0.8% at 3383.66.
- Elsewhere, in China the SHANGHAI closed higher by 14.077 pts or +0.36% at 3890.448 and the HANG SENG ended 192.4 pts higher or +0.75% at 25690.53.
- Across Europe, Germany's DAX trades higher by 46.94 pts or +0.19% at 24246.67, FTSE 100 higher by 0.68 pts or +0.01% at 9838.13, CAC 40 up 4.18 pts or +0.05% at 8155.45 and Euro Stoxx 50 up 4.68 pts or +0.08% at 5746.54.
- Dow Jones mini up 52 pts or +0.11% at 48040, S&P 500 mini up 22.75 pts or +0.34% at 6801, NASDAQ mini up 118.75 pts or +0.47% at 25147.
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FOREX: EURCHF Edges Further Away From 0.9200 Following False Break
- Alongside the yen, the Swiss Franc underperformed across the G10 on Tuesday, assisting EURCHF further away from the recent false break below 0.9200. Given the significance of the cluster support around this mark, the rejection and subsequent reversal bolster the argument for a stronger recovery.
- Indeed, EURCHF gains are moderately extending today, and a higher close would mark a fourth day of gains. A break above the 50-day EMA, which intersects at 0.9293, would then target downtrend resistance at 0.9334.
- While the USD index was able to momentarily recover past the Aug 01 high, USDCHF remained shy of its corresponding target. This level remains around 2% from current spot levels, at 0.8171.
- Next week’s sport event adjusted GDP will be a final reading, meaning that the domestic calendar remains light until November CPI on Dec 03. The final SNB meeting of the year is on Dec 11.
