This article was last updated on April 16, 2022
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Stock markets around the world have been mixed overnight and into this morning. US index futures and the Dax are flat, while the Nikkei rose 0.2%.
The top performing index so far today has been the FTSE which has gained on a number of factors. The Labour Party released its manifesto today, big on tax increases and nationalizations, which doesn’t appear likely to win them any friends outside of their hard core base. Meanwhile, UK inflation came in higher than expected indicating a strong UK economy. Somewhat surprisingly, GBP is steady against USD on this news even though it puts more pressure on the Bank of England to tighten after the election.
The FTSE, with its big energy names is also benefiting from continued oil price gains. WTI and Brent are climbing on reports Kuwait and other countries are ready to join Saudi Arabia and Russia in a nine-month extension to production cuts. Reports have suggested a longer extension could get rid of the supply glut. Higher oil is supporting CAD following a rally and could benefit energy stocks in North America today.
Overall, however, US markets appear stuck. Overnight reports that President Trump may have leaked sensitive information to the Russians keep the political pot boiling and distracts the administration away from economic reforms. So far, the street has been taking it all in stride, but with the S&P still struggling around 2400 one has to think at some point this deadlock could break and we could see a significant move.
Speaking of big moves, the Euro has broken out over $1.1000 today. Traders are still responding favourably to Macron’s big win in France. With French parliamentary candidate lists now out, traders may be anticipating his support may carry down the ticket and that his agenda could pick up a lot of support in parliament as well. Austria is now looking at elections this fall with the governing coalition collapsing, but this hasn’t attracted much attention from traders yet.
Home Depot could be active today after posting stronger than expected earnings. Gold has picked up a bit today and remains a good barometer of the street’s attitude toward political and economic risk.
Chart Signals: Big Breakouts for EUR pairs and UK 100, Big Breakdown for USD Index
EUR is breaking out today, clearing $1.1000 against USD and 0.8500 against GBP. On the other hand, the US Dollar index has broken down with golden crosses in Cable and Gold confirming USD weakness. Several indices are trading at or near all-time highs with the UK 100 leading the charge upward with a big breakout that puts a decisive end to a former head and shoulders top.
North American and European Indices
US 30 is still bouncing around 21,000 trading between 20,970 and 21,020. It continues to attract support above its 50-day average near 20,770 while still facing resistance near 21,130.
US SPX 500 is still sitting on 2,400 as it trends sideways between 2,378 and 2,406. A breakout would signal the start of a new upleg with measured resistance possible near 2,434. Next support at the 50-day average near 2,366.
US NDAQ 100 is peeking above 5,700 to a new high, trading up toward 5,708. Next measured and round number resistance possible near 5,750, with initial support near 5,660. RSI remains really overbought but so far the uptrend shows no signs of breaking either.
UK 100 is breaking out today, clearing 7,450 the head of a failed head and shoulders top, and advancing on the 7,500 round number. Next measured resistance possible in the 7,600 to 7,640 area. Rising RSI confirms increasing upward momentum.
Germany 30 continues to steadily climb within a 12,650 to 12,900 trading range, recently regaining 12,800 and trading between 12,780 and 12,840. RSI overbought but confirming intact upward momentum for now.
Commodities
Gold continues to climb up off a higher low near $1,220 with support rising toward $1,230 and the pair advancing on $1,235. Next potential resistance appears near $1,248 where the 50-day average appears poised to stage a golden cross of the 200-day average. RSI rising toward 50 indicates downward pressure easing.
WTI crude oil is sitting on $49.00 trading between $48.90 and $49.30 near its 50 and 200-day averages as it consolidates its big bounce up from $43.50. Next resistance possible near $50.00 then $50.60. RSI back above 50 confirms momentum turning back upward.
FX
US Dollar Index is breaking down today, taking out 98.50 to signal the start of a new downleg. The index has traded down toward with next potential measured support near the 97.50 level. RSI falling away from 50 confirms increasing downward momentum.
USDJPY is still bouncing around between 113.35 and 114.55 two Fibonacci levels. Lower highs in the pair and a head and shoulders top in the RSI indicate the recent upswing has peaked and a pause or correction starting. Resistance drops toward 113.70 with next support near 112.15.
EURUSD is breaking out today, clearing $1.1000 to complete a consolidation phase and signal the start of a new upleg. Next potential resistance near $1.1145 then a measured $1.1160. Rising RSI confirms upward momentum increasing.
EURGBP is breaking out today, decisively clearing 0.8500 and advancing on 0.8580 where it is testing its 200-day average. Next upside resistance possible near 0.8625, a Fibonacci level. RSI climbing up from 50 confirms increasing upward momentum.
GBPUSD is still hanging around $1.2900 as it digests recent gains between $1.2825 and $1.3000. RSI drifting toward 50 indicates momentum downshifting from upward to neutral but a Golden Cross of the 50-day average over the 200 confirms underlying uptrend remains intact.
USDCAD continues to roll over with its $1.3665 breakdown point emerging as lower resistance and the pair trading near $1.3620. Next potential support appears near $1.3600 then $1.3570. RSI falling toward 50 indicates recent uptrend weakening and a downturn pending.
CADUSD continues to turn upward, confirming its $0.7320 breakout point as news support and digesting recent gains near $0.7340. Next potential resistance appears near $0.7380 then $0.7410 both Fibonacci levels. RSI gaining on 50 indicates downward momentum fading.
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