CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

European Open: Risk-off extends its reach to Asia, gold to shine?

Article By: ,  Market Analyst
January 21, 2022 6:07 AM

Asian Indices:

  • Australia's ASX 200 index fell by -166.6 points (-2.27%) and currently trades at 7,175.80
  • Japan's Nikkei 225 index has fallen by -313.26 points (-0.89%) and currently trades at 34,715.39
  • Hong Kong's Hang Seng index has fallen by -188.75 points (-0.76%) and currently trades at 24,763.60
  • China's A50 Index has fallen by -84.88 points (-0.55%) and currently trades at 15,414.64

UK and Europe:

  • UK's FTSE 100 futures are currently down -80.5 points (-1.07%), the cash market is currently estimated to open at 7,504.51
  • Euro STOXX 50 futures are currently down -69.5 points (-1.62%), the cash market is currently estimated to open at 4,230.11
  • Germany's DAX futures are currently down -218 points (-1.37%), the cash market is currently estimated to open at 15,694.33

US Futures:

  • DJI futures are currently down -79 points (-0.23%)
  • S&P 500 futures are currently down -182.25 points (-1.23%)
  • Nasdaq 100 futures are currently down -28.25 points (-0.63%)

Asian equity markets tracked Wall Street lower overnight, forcing investors to move over to bonds as a safe haven and weigh on yields. What began as excitement at the prospects of the Feed hiking appears to have now turned into fear. Basically, it was a sea of red, the ASX 200 was the weakest major index and hit our lower bearish target around the October lows. The Nikkei fell to a 5-month low, although the Hang Seng was relatively unscathed and further supports our view that China’s equities are set to perform Japan’s. The Japanese yen was also the strongest currency (with the Swiss Franc coming in second place) as they sucked up safe haven flows.

Retail sales for the UK and Canada are the main economic calendar events, yet we suspect these will take a back seat as investors instead absorb the order flows and sentiment of the past couple of days and take it from there.

The oil shakeout begins

WTI’s rally up to (and beyond) the October high was nothing short of impressive this week. We expected a bit more resistance around $85 than we saw but after a few false attempts at cracking $85.50 bulls seemingly closed out to book profits. Yet a momentum shift suggests fresh shorts have been initiated.

We can see on the four-hour chart that prices have seen a clean break of trend support yesterday. For today we’d favour fading into minor pullbacks with a view to target the 81.50 – 82.0 zone either later today or early next week. A break above $85 invalidates that bias.

 

How to start oil trading

 

Will the stars align for gold bulls today?

Gold saw an impressive break above 1834 earlier this week. And it’s encouraging for the bull-case to see prices have since held above that milestone breakout level. Prices are now consolidating around the weekly R1 pivot level having broken out of a bull flag. And this is where it gets the more interesting. The flag projects a target right within a decent confluence of resistance levels including the monthly R1 / weekly R2 pivot points and a long-term bearish trendline.

1850 makes a viable initial target ahead of 1855. But given the significance of the levels at the upper zone we do not expect it to break first time around (and may even tempt some bears to the table). Whilst an early break below 1834 places this onto the back burner, at which point we would look for a new level of support to build in line with its bull flag breakout. We would need to see an aggressive close below 1834 to fully remove the bullish bias at this stage.

 

How do you trade gold on forex markets?

 

FTSE 350: Market Internals

FTSE 350: 4299.32 (-0.06%) 20 January 2022

  • 190 (54.13%) stocks advanced and 143 (40.74%) declined
  • 12 stocks rose to a new 52-week high, 4 fell to new lows
  • 47.29% of stocks closed above their 200-day average
  • 42.74% of stocks closed above their 50-day average
  • 13.11% of stocks closed above their 20-day average

Outperformers:

  • + 9.03% - Spirent Communications plc (SPT.L)
  • + 8.15% - Trainline PLC (TRNT.L)
  • + 7.82% - Premier Foods PLC (PFD.L)

Underperformers:

  • -5.79% - Safestore Holdings PLC (SAFE.L)
  • -4.26% - Countryside Properties PLC (CSPC.L)
  • -4.18% - Associated British Foods PLC (ABF.L)

 

Up Next (Times in GMT)

 

 

How to trade with City Index

You can easily trade with City Index by using these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    • Open an account in the UK
    • Open an account in Australia
    • Open an account in Singapore

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website 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.

© City Index 2024