European Open: Japan’s Exports Blow Past Expectations

Charts (6)

Asian Indices:

  • Australia's ASX 200 index rose by 14.6 points (0.21%) and currently trades at 7,078.10
  • Japan's Nikkei 225 index has risen by 59.63 points (0.2%) and currently trades at 29,743.00
  • Hong Kong's Hang Seng index has risen by 232.17 points (0.8%) and currently trades at 29,201.88

UK and Europe:

  • UK's FTSE 100 futures are currently up 3 points (0.04%), the cash market is currently estimated to open at 7,022.53
  • Euro STOXX 50 futures are currently up 11 points (0.28%), the cash market is currently estimated to open at 4,043.99
  • Germany's DAX futures are currently up 26 points (0.17%), the cash market is currently estimated to open at 15,485.75

Friday US Close:

  • The Dow Jones Industrial rose 305.1 points (0.9%) to close at 34,035.99
  • The S&P 500 index rose 15.05 points (0.37%) to close at 4,185.47
  • The Nasdaq 100 index rose 15.71 points (0.11%) to close at 14,041.91


FTSE 100: Market Internals


The FTSE 100 closed above 7,000 for the first time in 14-month on Friday. A potential bull flag is forming on the four-hour chart which projects a target just below 7100 is successful. A break to new highs confirms the flag formation and the bias remains bullish above its 7005.74 low, assuming another low is not printed before it breaks higher. A break below 7,000 invalidates the bullish bias over the near-term.

FTSE 100: 7019.53 (0.52%) 16 April 2021

  • 65 (64.36%) stocks advanced and 33 (32.67%) declined
  • 84.16% of stocks closed above their 200-day average
  • 92.08% of stocks closed above their 50-day average
  • 90.1% of stocks closed above their 20-day average
  • 3 hit a new 52-week high, 0 hit a new 52-week low

Outperformers

  • + 3.65%   -  EVRAZ plc  (EVRE.L) 
  • + 3.30%   -  Tesco PLC  (TSCO.L) 
  • + 2.81%   -  Next PLC  (NXT.L) 

Underperformers:

  • -2.53%   -  London Stock Exchange Group PLC  (LSEG.L) 
  • -2.28%   -  Rolls-Royce Holdings PLC  (RR.L) 
  • -1.70%   -  Hikma Pharmaceuticals PLC  (HIK.L) 


Indices remains firm

Global equities remained firm overnight after posting broad gains last week. The ASX 200 hit a 14-month high on Friday and gained a further 0.2% today. The Hang Seng index rose 0.8% and the Nikkei 225 is up around 0.26% despite a stronger Japanese yen. European futures are a touch higher, and FTSE 100 futures are effectively flat at just 0.1% higher.

Forex: Japan’s exports blast past expectations.

Japan’s exports rose 16.1% YoY, which is their fastest pace since August 2017. Rising from -4.5% in February, exports also below past analyst estimates of 11.6%. The Japanese yen is the strongest major whilst the euro is the weakest. EUR/JPY and CHF/JPY are the weakest pair of the session.

  • The US dollar index (DXY) is 0.2% higher as prices try to build a base above the 91.30/40 lows. Conversely, reversal. EUR/USD has broken beneath its bullish channel after failing to test 1.2000 last week.
  • GBP/USD printed a bullish engulfing candle on Friday which suggests a higher low has formed at 1.3716. The next target for bulls on the daily chart is the highs around 1.3900.
  • GBP/JPY also produced a bullish engulfing candle on Friday, and a break above 150.83 assumes bullish continuation. 
  • GBP/AUD printed a bullish engulfing candle on Friday as part of a countertrend move. Given it recently broke out of its bullish channel we are now seeking bearish setups below 1.0800 to target 1.7700 and the 1.7420 low.


Price action on the EUR/GBP daily chart suggests a top has formed. After a strong rally from the April 5th low, prices failed to test the 0.8731 high and the cross spent several sessions trading in a sideways range. A bearish hammer on Friday made a final (and failed) attempt to test 0.8731 and today’s price action has broken beneath the bearish hammer, the 50-day eMA and 0.8640 support.

  • The bias remains bearish below 0.8730, although 0.8670 or even today’s high can be used to aid risk management.
  • 0.8600 is an interim target ahead of key support at 0.8540.
  • Ideally we want to see a daily close beneath 0.8639. A reversal back above it suggests a bear-trap has occurred.\

Commodities:

Gold is trading just beneath last week’s high after closing to its best level in eight weeks. Its double bottom target is at 1835 and we are hoping to see prices remain support above 1760 (as a break beneath it invalidates the double bottom pattern).

Silver is consolidating after printing a bearish hammer on Friday, although it did reach our bull-flag target outlined last week. From here we are hoping to see prices remain support above the 26.00/50 area where the 100 and 50-day eMA’s reside.

WTI futures are -0.3% lower as coronavirus cases in India continue to surge. Regardless, we remain bullish whilst prices hold above 60.38 (Wednesday’s low).


Up Next (Times in BST)

At 21:00 Canada’s Finance Minister (Chrystia Freeland) will present the first federal budget in two years which is expected to offer support to those struggling during the pandemic and reveal a plan to boost growth.

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