European Open: Shares Drift Lower During Overnight Trade
FOREX.com June 6, 2021 8:36 PM
Friday’s equity rally failed to make its way over to today’s Asian session, instead seeing equities drift lower as traders await new catalysts ahead of key inflation data from the US on Thursday.
- Australia's ASX 200 index fell by -25.7 points (-0.35%) and currently trades at 7,269.70
- Japan's Nikkei 225 index has risen by 85.99 points (0.3%) and currently trades at 29,027.96
- Hong Kong's Hang Seng index has fallen by -226.09 points (-0.78%) and currently trades at 28,692.01
UK and Europe:
- UK's FTSE 100 futures are currently up 0.5 points (0.01%), the cash market is currently estimated to open at 7,069.54
- Euro STOXX 50 futures are currently down -4 points (-0.1%), the cash market is currently estimated to open at 4,085.38
- Germany's DAX futures are currently down -34 points (-0.22%), the cash market is currently estimated to open at 15,658.90
- DJI futures are currently down -26 points (-0.07%), the cash market is currently estimated to open at 34,549.31
- S&P 500 futures are currently down -20 points (-0.15%), the cash market is currently estimated to open at 4,209.89
- Nasdaq 100 futures are currently down -5.25 points (-0.12%), the cash market is currently estimated to open at 13,765.53
Learn how to trade indices
Futures markets are pointing towards a slightly softer open today, and share markets in Australia, China and Japan are all in the red – but not by an alarming rate. The ASX 200 printed a fresh record high yet failed onto earlier gains as it fell back below 7300 and currently trades -0.19% lower, whilst the Hang Seng is the weakest major index and is currently trading -0.77% lower.
We could be in for some choppy trading action on the FTSE 100 today after Thursday’s bearish candle threw a spanner in the works. We noted in Thursday’s report that a break beneath 7069 could lead to bearish follow-through, which it indeed did. Friday produced a small indecision candle within Thursday’s bearish engulfing range and, until prices break out of Thursday’s range we could fine range trading strategies are preferred. Key support zones today include 7054 – 7057 (POC) and 7039 (value area low). 7069 – 7074 is a key resistance zone for bulls to conquer ahead of the 7100 handle.
FTSE 350: Market Internals
FTSE 350: 7069.04 (0.07%) 04 June 2021
- 194 (55.27%) stocks advanced and 140 (39.89%) declined
- 22 stocks rose to a new 52-week high, 3 fell to new lows
- 88.03% of stocks closed above their 200-day average
- 24.5% of stocks closed above their 20-day average
- + 4.85% - CMC Markets PLC (CMCX.L)
- + 3.75% - Premier Foods PLC (PFD.L)
- + 3.59% - Hochschild Mining PLC (HOCM.L)
- -3.66% - Just Group PLC (JUSTJ.L)
- -3.27% - Wizz Air Holdings PLC (WIZZ.L)
- -2.89% - Volution Group PLC (FAN.L)
China’s exports rose 27.9% YoY in May yet fell short of the 32.1% expected. Higher commodity prices and freight costs have weighed on exports, yet this has also boosted imports to rise by 51.1% - its fastest rate in ten years. USD/CNH is currently 0.15% higher, although our bias remains bearish whilst prices remain below 6.4120 resistance as outlined in today’s Asian Open report.
The US dollar index (DXY) is just 0.02% higher and remained in a tight range overnight, following Friday’s sell-off thanks to a weaker NFP print. Its 50-day eMA is capping as resistance and prices are now back below the 20-day.
GBP/CAD remains beneath its 1.7150/70 resistance zone although a spike higher on Friday tested the zone before selling off and leaving a bearish hammer for the day.
EUR/GBP has tested 0.8560 support overnight (May low) and currently trying to form a daily hammer. Given we’ve seen three spikes hold above 0.8560 it suggests a base is being formed which makes it less of interest for bearish setups. That said, it doesn’t look too appealing for longs either, so we’ll step aside for now.
154.84 remains a pivotal level for GBP/JPY. The prior resistance is now acting as support, although Friday’s bearish candle and attempt to break support today brings into question whether we’ll now see prices break lower.
We’re keeping an eye on AUD/CHF for a possible bullish breakout after last week’s bear-trap. Despite closing beneath 0.6925 support on Thursday, prices reversed on Friday to take it aggressively back into range. Given the ‘V’ shape on the hourly chart it suggests demand is down at those lows, so a break above 0.6980 suggest a trend reversal is underway.
Learn how to trade forex
WTI rose to $70 overnight yet found resistance at this psychological round number. Given the significance of $70 we suspect a correction could be due and prices are already trying to carve out a bearish hammer beneath this key level.
Up Next (Times in BST)
You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.