UKX Hourly - Bearish engulfing The Hourly bearish engulfing candle confirms my short thesis as well as puts a line in the sand as a stop loss (7225). It has been a frustrating ride so far so hoping we can pick up some momentum to the downside
FTSE
Elliott Wave View: FTSE Nesting Higher As ImpulseShort-term Elliott wave view in FTSE suggests that the pullback to 19 July 2021 low (6812.84) ended wave (4). Up from there, the index is nesting higher as an impulse sequence within wave (5) favoring more upside extension to take place. While the initial bounce to 6929.89 high ended wave ((i)), wave ((ii)) pullback ended at 6827.26 low, wave ((iii)) completed in lesser degree 5 waves at 7018.95 high. Wave ((iv)) ended at 6956.24 low, wave ((v)) ended at 7033.27 high thus completed wave 1.
Down from there, the index made a pullback in wave 2 to correct the cycle from 7/19/2021 low. The internals of that pullback unfolded as Elliott wave flat structure where wave ((a)) ended at 6980.67 low. Wave ((b)) ended at 7038.65 high and wave ((c)) ended at 6929.64 low. Above from there, the index started the next leg higher in wave 3 and ended lesser degree wave ((i)) at 7093.93 high. Then wave ((ii)) pullback ended at 6996.93 low and resume the rally higher again.
Whereas lesser degree wave (i) ended at 7142.54 low, wave (ii) ended at 7089.74 low. Near-term, as far as dips remain above 7089.74 low and more importantly above 6812.84 low then FTSE is expected to extend higher in lesser degree wave (iii) towards 7236.10- 7326.35 area higher before entering into a wave (iv) pullback. We don’t recommend selling and expect dips to find support in 3, 7, or 11 swings for further upside.
UKX Hourly - Approaching double resistance FTSE has a habit of issuing a signal then giving one last final squeeze - is the same happening again post the break down of the rising wedge? I'm still holding onto my prior shorts and using this opportunity to add. Currently at double resistance at 7190. RSI also showing divergence as well as being overbought. Good RR here I reckon for a short.
UK100 - A major breakout imminent?The UK100 is closing in on 7,200 and approaching levels not seen since the start of the pandemic.
This isn't the first time the index has eyed up this level in recent months but in the past it has failed to break through in any significant way - it briefly touched 7,217 a couple of months ago before reversing course - and each time a corrective move has followed.
This has left the FTSE trading between 6,800 and 7,200 since April but that could all be about to change.
While we may see some profit taking on approach, the MACD and stochastic suggest there's plenty of momentum still in the rally that could carry it to levels not seen in 18 months.
If we do see some profit taking, the rising trend line below could be interesting support if the rally is going to continue. A move below this would suggest a larger correction may be on the cards.
UKX Hourly - Hourly close here will confirm the break lower Bearish rising wedge has broken lower but need the hourly close to confirm. Downside targets are 7060, 7025, 6980 and 6940
FTSE- The Big ShortFTSE, Has completed this huge daily harmonic pattern since before the Covid pandemic, We could see a massive sell of in the indice, Money running to the $ could see a massive collapse in global stock markets, because they too me seem very over priced, considering the state of the overall world economy right now, with tensions brewing China, is it possible we see a massive sell off and pressure on the FTSE 100, time will tell.
UKX Hourly - Still favouring a short Top of channel again, coupled with lateral resistance. Bearish RSI divergence, as well as a potential rising wedge forming
UKX Hourly - Testing upper resistance againFTSE has shot higher this morning, but is testing the upper resistance of the megaphone pattern we identified last week. Coupled with bearish RSI divergence there is decent RR to go short here. I have already started scaling in
Stocks - What Next?Idea for indices:
- As expected, Robinhood IPO was the trigger for global sell-off (other factors involved obviously, but I have been posting about everything macro related in other posts).
- China continuing to lead down.
- Look how the deflationary wave hits HSI > Nikkei > EU > US. Dome tops forming everywhere.
- ECB actually has greater QE than US, so EU index performance is a critical tell for deflationary forces vs. QE.
- Watch China Tech ETFs to lead US indices down. Managers will need to also liquidate US positions as their portfolio % exposure becomes overweight.
I've been enjoying watching Nikkei lately - it just broke a critical support and 200 DMA (6m low), officially a bear market if it consolidates losses. However, it is still holding 50 WMA and 200 DMA in real performance... waiting for US markets for confirmation.
Bearish bias here, turning point is due. Aug 2 debt limit will be in focus. Early August is my trigger for reversal confirmation. If it holds, we can back off and try again later, but rugpull is definitely due.
Already short US indices (long vol).
Nikkei real performance (relative to currency):
Here is what I think will happen to Nikkei next:
GLHF
- DPT
UKX Hourly - Nice pullback off resistance Nice pullback this morning off the top of the megaphone formation identified yesterday. There is double support around 7015/25 = lateral and upward sloping. A break below here targets 6980 and 6940. 6900 would see the bottom of the megaphone formation and the next large support region shaded in red. My bias would like to see it lower - but ideally would need to wait for confirmation. Also need to bare in mind that its not unusual to see selling into month end followed by a rally at the beginning of the new month
UKX Hourly - Approaching top of megaphone Looking good for a short as it approaches top of megaphone formation within the red lateral resistance zone. RSI also looking stretched. First targets are 7055 and 7025
UKX Hourly - Lost channel supportLost channel support after testing significant resistance (breakdown level from last week). Targeting the red area = 6860/6900
NZDCAD H4 - Long SetupNZDCAD H4
Long setup indicated here, again another one carried forward from last week, looking to see if we double bottom from our interim support/resistance price. If we do, we have a solid 4.2R trade measured from our buy zone to take profit target.
We pushed just slightly shy of 2R on the latest bounce, but again, fresh week more volume. Lets see what we can capitalise on.
FTSE
yeah the last key level SHORT TERM was broken, now you ned wait to 23500 level or below (red zone) meanwhile wait!
UKX Hourly - Consolidating before next leg higher Decent bounce o/n / this morning following yesterday's sell off. I still favour a further move to the upside to test the initial break down. Can potentially see a bit of consolidation here in the red zone before targeting 6980. RSI has also broken out.
VMID Weekly - Last line of support Continues to look poorly following my analysis a month ago (I sold all my holdings then). It is currently sitting on support and needs to bounce here otherwise I fear it will go a lot lower. (my hope so I can buy back in)
UKX Hourly - Approaching lateral supportThe 7025/6080 support area failed as expected following 4 previous bounces and a subsequent bear flag. We are now approaching new lateral support as the RSI heads into oversold territory. I will look to start averaging back into my ISA and SIPP accounts hoping for a bounce. When zoomed out the longer term picture is looking slightly more worrying - we may be approaching a sell a rally vs. buy the dip. Will monitor closely
UKX Hourly - Bear flag confirmed Bear flag targets 7055 - This index has been feeling heavy since yesterday and we have just received our first technical pattern to confirm
UKX Hourly - Feeling heavy The index failed to make a higher high and has been trending lower all day. The 6980/7025 area has been tested 4 times and bounced aggressively - I doubt this will be the case on the next test. THe more times a level is tested the more likely it is to break/fail. I'm currently holding a short position (to hedge equity), but keeping an eye on the overhead open gap. I feel much better delta neutral at these levels
GBP/USD: Complete Weekly Outlook (July 12-16) 🔥My complete weekly outlook for GBP/USD.
Leave me a comment on how you would trade the pair, and please hit "LIKE" and follow for more trade ideas like this. Thanks!
FUNDAMENTALS:
After reaching fresh 2-week highs on Friday, the GBPUSD pair fell sharply overnight as the US dollar firmed with higher UST yields. Markets remain cautious on GBP as the United Kingdom proceeds with their reopening plan, despite a surge in daily infections to around 31k. However, hospitalizations remain low, 90% of the UK population has covid-19 antibodies, and the country is also one of the leaders in vaccination rates. This supports my bullish bias in the currency for the week, assuming risk sentiment remains supportive and the USD continues to slide.
Latest Headlines:
USD News:
- US Dollar Index Price Analysis: Recovery targets 92.85
- US futures mixed ahead of North American trading
- Fed's Barkin: If labour market takes longer to recover, tapering goes a little later
- Fed's Barkin: Labor market hasn't healed enough to taper bond buying – WSJ
- US Dollar Index regains traction around 92.20
GBP News:
- GBP/USD: Sterling set to suffer as “Freedom Day” may be less free than earlier anticipated
- GBP/USD now targets 1.3900 and beyond – UOB
- GBP/USD retreats from two-week tops, flirts with session lows near 1.3885-80 area
- Pound Sterling Price News and Forecast: GBP/USD teases 1.3900 on softer USD, risk-on mood
- GBP/USD teases 1.3900 on softer USD, risk-on mood
- Pound Sterling Price News and Forecast: GBP/USD in a third week of declines? Delta, data and dollar
Upcoming Market Reports:
Here are the most important market reports for GBP/USD to follow in the coming days (all times are UTC timezone):
Tuesday at 12:30: USD CPI m/m (Expected: 0.5% , Previous: 0.6% )
Tuesday at 12:30: USD Core CPI m/m (Expected: 0.4% , Previous: 0.7% )
Tuesday at 17:01: USD 30-y Bond Auction (Expected: , Previous: 2.17|2.3 )
Wednesday at 06:00: GBP CPI y/y (Expected: 2.2% , Previous: 2.1% )
Wednesday at 12:30: USD PPI m/m (Expected: 0.6% , Previous: 0.8% )
Wednesday at 12:30: USD Core PPI m/m (Expected: 0.4% , Previous: 0.7% )
Wednesday at 14:30: USD Crude Oil Inventories (Expected: , Previous: -6.9M )
Wednesday at 16:00: USD Fed Chair Powell Testifies (Expected: , Previous: )
Thursday at 10:00: GBP MPC Member Saunders Speaks (Expected: , Previous: )
Thursday at 12:30: USD Unemployment Claims (Expected: 350K , Previous: 373K )
Thursday at 12:30: USD Philly Fed Manufacturing Index (Expected: 27.8 , Previous: 30.7 )
Thursday at 13:15: USD Industrial Production m/m (Expected: 0.6% , Previous: 0.8% )
Thursday at 13:30: USD Fed Chair Powell Testifies (Expected: , Previous: )
Friday at 12:30: USD Retail Sales m/m (Expected: -0.5% , Previous: -1.3% )
Friday at 12:30: USD Core Retail Sales m/m (Expected: 0.4% , Previous: -0.7% )
Friday at 14:00: USD Prelim UoM Consumer Sentiment (Expected: 86.5 , Previous: 86.4 )
INTERMARKET:
Yields:
Yield differentials remain supportive for the pair due to the slide in US 2y yields over the last two weeks. This is a bullish sign for the pair.
SENTIMENT:
CoT:
The GBP is one of the rare majors that saw an increase in positioning against the USD in the last week (along with the JPY). Net long positioning in GBP rose to $1.9 billion, but it's worth noting that fast money has reached a 12-month extreme, which poses a downside risk for the pound.
Currency Strength Index:
GBP is slowly building its bull trend while the USD remains somewhat flat against other majors for the last 6 trading days. Today, risk-off supported the USD and JPY overnight, but the picture is changing ahead of the NY open, with risk currencies (and the pound) recovering some ground and the USD retreating from daily highs.
Risk Reversals:
While risk reversals are still skewed to the downside, it's worth noting that GBP call options are recovering vs similar out-of-the-money put options, signaling that investors are increasingly protecting against higer prices in the pound.
* Comment: In the FX market, risk reversals refer to the difference between the implied volatility of the most popular out-of-the-money calls and puts with the same expiration. Higher demand for an options contract increased its volatility and price. Therefore, a positive risk reversal signals that upside protection in the pair is relatively more expensive than downside protection, suggesting that investors are speculating on a rise in the currency.
TECHNICALS
Price-Action:
GBP/USD broke above a bearish trendline and reached fresh 2-week highs, were sellers pushed the price lower overnight. The pair is now finding support at the broken trendline, near the 50% Fib level of the latest bullish impulse move and a horizontal support area. The short-term trend is turning bullish, but 1.3830 (and 1.3815, the 61.8% Fib) need to hold for buying opportunities to emerge.
Pound pairs are famous for their deeper corrections, so the 61.8% Fib may be in play. However, risk tolerant traders may also use the 1.3830 level (which aligns with a horizontal support) to build their long positions.
It's also worth noting that today's (Monday) bear run is accompanied with decreasing volume, signaling that a turning point may be near.
Levels to follow (Liquidity):
Major resistance: 1.3909 (weekly high)
Minor support: 1.3815 (61.8% Fib)
Major support: 1.3750 (weekly lows and daily trendline)
== SUMMARY ==
UK's "Freedom Day" (July 19 when all restrictions should be lifted by the government) could provide further support for the pound despite higher daily infection rates. The number of hospitalizations and fatal outcomes has been greatly reduced, and the majority of the UK population has covid antibodies, which supports my constructive outlook for the pair.
Pullbacks (like the one today) could be used to enter long in GBP/USD.
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