European Open: USD/JPY and FTSE look set to challenge recent highs

Asian Indices:

• Australia's ASX 200 index rose by 68.9 points (0.97%) and currently trades at 7,179.70
• Japan's Nikkei 225 index has risen by 72.74 points (0.27%) and currently trades at 27,321.61
• Hong Kong's Hang Seng index has fallen by -377.36 points (-1.54%) and currently trades at 24,202.19
• China's A50 Index has fallen by -308.25 points (-2.05%) and currently trades at 14,733.40

UK and Europe:

• UK's FTSE 100 futures are currently up 9.5 points (0.13%), the cash market is currently estimated to open at 7,582.97
• Euro STOXX 50 futures are currently down -1.5 points (-0.04%), the cash market is currently estimated to open at 4,119.06
• Germany's DAX futures are currently down -8 points (-0.05%), the cash market is currently estimated to open at 15,198.64

US Futures:

• DJI futures are currently down 0 points (0%)
• S&P 500 futures are currently up 19.25 points (0.13%)
• Nasdaq 100 futures are currently up 2 points (0.04%)

China’s equity markets were broadly lower after the US announced that 33 Chinese entities had been added to their exporters blacklist. The CSI 300 and China A50 are down around -2%. The ASX 200 was a top performer overnight after the government announced they will reopen their borders to vaccinated international travellers from February 21^st. Australia’s business confidence also rebounded in January by 15 points to +3. Whilst it doesn’t quite make up for the 25-point drop in December to -12, it did help overshadow business conditions which sank to an 18-month low.

FTSE 100 to reach for a new YTD high?

FTSE 350: 4264.9 (0.76%) 07 February 2022

It was a strong close for the FTSE 100 yesterday, although the 7600 – 7620 resistance zone remains a key area for bulls to conquer. Support was found on Thursday at 7500 and yesterday’s up day means a 3-bar bullish reversal has formed at this important support level. Our bias is now for a break higher, in line with its wider bullish channel.   

FTSE 350: Market internals

• 217 (61.65%) stocks advanced and 122 (34.66%) declined
• 7 stocks rose to a new 52-week high, 11 fell to new lows
• 34.38% of stocks closed above their 200-day average
• 92.33% of stocks closed above their 50-day average
• 13.07% of stocks closed above their 20-day average

Outperformers:

• + 7.08% - Trustpilot Group PLC (TRST.L)
• + 6.56% - Carnival PLC (CCL.L)
• + 5.57% - PureTech Health PLC (PRTC.L)

Underperformers:

• -6.82% - EVRAZ plc (EVRE.L)
• -5.34% - Hammerson PLC (HMSO.L)
• -4.01% - Smith & Nephew PLC (SN.L)

USD/JPY probes cycle high after weak data from Japan

USD/JPY is within up uptrend on the four-hour chart. It has formed higher lows along the 50 and 20-bar eMA’s with bullish spikes (lower wicks) at the 50% and 38.2% Fibonacci ratios. It broke above 115.18 resistance after weak data from Japan overnight and we are looking for this level to old as support today. Next levels we are targeting include the highs around 115.60 and the weekly R1 pivot point.

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