European Open: Gold hones in on the June high

Gold nuggets
Matt Simpson financial analyst
By :  ,  Market Analyst

Asian Indices:

  • Australia's ASX 200 index fell by -72.3 points (-1%) and currently trades at 7,161.30
  • Japan's Nikkei 225 index has fallen by -478.4 points (-1.78%) and currently trades at 26,432.47
  • Hong Kong's Hang Seng index has fallen by -795.53 points (-3.29%) and currently trades at 23,374.54
  • China's A50 Index has fallen by -308.65 points (-2.05%) and currently trades at 14,765.73

UK and Europe:

  • UK's FTSE 100 futures are currently down -58.5 points (-0.79%), the cash market is currently estimated to open at 7,425.83
  • Euro STOXX 50 futures are currently down -55 points (-1.38%), the cash market is currently estimated to open at 3,930.71
  • Germany's DAX futures are currently down -228 points (-1.55%), the cash market is currently estimated to open at 14,503.12

US Futures:

  • DJI futures are currently down -433 points (-1.27%)
  • S&P 500 futures are currently down -299.25 points (-2.14%)
  • Nasdaq 100 futures are currently down -65 points (-1.5%)
20220222futures2fx

Russian troops have reportedly entered two of the breakaway regions in Eastern Ukraine, causing widespread outcry from global leaders and plans to impose sanction on Russia. Sentiment remains at the whim of Russian headlines today and likely the rest of the week.

It was another sea of red for equity markets overnight with the Hang Seng leading the declines. Gapping lower by around -% and continuing lower, the HSI is on track for a -3% loss during its worst session since September. US futures all point lower with Nasdaq E-mini futures contract currently off by around -2.2%. The FTSE is the only index we track which hasn’t fallen over -1% (yet).

FTSE 100 probes trend support

20220222ftse100FX

As the FTSE has been the least effected by the recent selloff of global equities, it may be an outperformer should sentiment magically turn around. We can see on the four-hour chart that it remains within a rising channel and has pulled back to the lower trendline. However, if bulls fail to regain control then we would look for a break beneath 7420 to signal its next leg lower, which would then see us target the lows around 7300 which is the base of a rising wedge pattern.

FTSE 350: Market Internals

20220222moversFTSEfx

 

FTSE 350: 4200.48 (-0.39%) 21 February 2022

  • 57 (16.29%) stocks advanced and 284 (81.14%) declined
  • 3 stocks rose to a new 52-week high, 40 fell to new lows
  • 28.29% of stocks closed above their 200-day average
  • 20.57% of stocks closed above their 50-day average
  • 11.43% of stocks closed above their 20-day average

Outperformers:

  • + 9.09% - Petershill Partners PLC (PHLL.L)
  • + 6.32% - Jtc PLC (JTC.L)
  • + 5.29% - Syncona Ltd (SYNCS.L)

Underperformers:

  • -17.02% - Petropavlovsk PLC (POG.L)
  • -8.47% - Polymetal International PLC (POLYP.L)
  • -7.87% - TBC Bank Group PLC (TBCG.L)

Gold hones in on the November high

20220222goldFX

Perhaps not too surprisingly, gold remains the firm favourite with bulls at the moment. It remains in a strong uptrend on the one-hour chart and has formed a small triangle, which is generally accepted to be a trend continuation pattern. A zone of resistance around 1916 – 1918 makes a viable upside target and out bias remains bullish above 1900. But if prices break out of the triangle to the upside then we’d like to see the target hit before prices test the triangle low. As 1916 is the June high we suspect we might see some form of a shakeout around the highs.

Up Next (Times in GMT)

Once again, we’ll likely find that traders are paying closer attention to Russia-Ukraine headlines over economic data. That said, Germany’s IFO business sentiment report is scheduled for 09:00, with US Markit manufacturing PMI and consumer confidence at 14:45 and 15:00 respectively.

20220222calendarGMT

 

 

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