Equities Turning Higher Again
Global equities benchmarks have started the week on a positive note with the four main indices tracked here all in the green as of writing. With the Dollar continuing to trade lower currently, equities have been given some reprieve with buyers stepping in to pick prices up off the recent lows suffered on the back of the correction seen last week.
Concerns over rising inflation, the Chinese regulatory crackdown on cryptos and commodities and the slide in crypto markets, had combined to send equities lower last week. However, on the back of a fairly muted set of FOMC meeting minutes, which offered little new information, the Dollar has taken another leg lower which has helped shore up sentiment in equities markets.
Globally, the focus is still on the reopening underway across many key economies. In the short term, at least, this is viewed as positive for equities, with many central banks reaffirming their commitment to keeping easing in place this year. However, inflation concerns have been the main source of market volatility this year and the prospect of a shift in central bank monetary policy remains a key headwind to further highs in asset markets going forward.
The DAX has broken above the 15486.96 level to trade fresh multi-year highs this week as the bull channel continues to extend. The MACD indicator has turned bullish again here, though the RSI is showing bearish divergence, warranting caution. To the downside, 14791.71 is the key support level to note.
The S&P has recovered firmly off the 4028.50 lows with price now trading back above the 4182.50 level and retesting the broken bullish trend line. While above 4182.50 the all tie highs at 4236.50 will be the key hurdle for bulls. MACD has yet to flip bullish and the RSI is showing bearish divergence, warranting caution here.
The FTSE found support once again at the test of the rising trend line and the 6895.6 level. While above here, the focus is on a further push higher though momentum has faded for now. MACD remains in bearish territory, though has flattened out, reflecting the loss of momentum. To the topside, 7137 and 7241 are the key levels to mark. Below 6895.6, 6806.5 is the next support to note.
The Nikkei has rebounded off the bottom of the bear channel, finding support ahead of the 26932.1 level and is now trading back above the 28356.6 level. With the MACD having turned bullish here, the focus is on a further push higher towards the bear channel top and a retest of the broken bull trend line.
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