Asian markets started this week with a reduction after IMF chief Christine Lagarde’s comments. New world economic growth forecasts are to be published later this month. Lagarde noticed that they may differ from April expectations.
‘Global activity is gaining the pace, but the growth may be not as strong as expected before, because of the weaker potential and low rate of investments.’ — Says Lagarde. ‘Despite all the antichrists measures we take, resumption is still slow, forced and unstable, and also CB’s measures have their limits.’ The growth of China will be 7%-7.5% according to her predictions.
European markets are traded below Friday’s closure points after the bad German data release. CAC40 Index seems to be ready for a new wave of sales. Index used to be in a bullish channel since the middle of April till June 25, when the trend line and 50 EMA were broken and 3 days of falling prices took place after that. Finally it found the support around 100 EMA. Now the price formed a bear flag and it’s testing the resistance zone and moving averages of about 4.500. I expect the flag to be broken this week and the price to fall to the support of 4.430. Once the price brakes the low of 4.407 and consolidates below, we then may expect deeper rollback to 200 EMA.
British FTSE100 reached an important resistance level of 6.875-6.894, which was formed in May 2013. The longer it takes for level to be formed, the more it tests the price, the more important it is for traders. After the reversal candle of June 26 was formed, Index returned above 100 EMA, broken the channel and got a nice continuation. Now, when there were a 100-points growth, it might need some kind of consolidation. It may be the upper base below the resistance or bull flag. Once the price brakes the low of 6.856, it may attract active sellers. I’ll use 8/21 EMA as dynamic rates of support to measure the market’s sentiment.
GBP/USD has found a resistance of 1.7100-.800 after the great movement and now it’s building the base with support 1.71300, then there is more important level of 1.71000.
On the hourly chart 100 EMA acts as a support. Once the price jumps off the support and brakes symmetrical triangle around 1.71600, then we may expect new highs. But if this consolidation was resolved down — middle term buyers would partly cover their positions. Then we may expect 1.71000.
Gold entered a downwards range after the support of $1325 was broken. Now it nears the support of $1306. Sellers failed to hold up the price below 8 EMA ever since June 19. If the price closes below $1318 today, it means that balance is changing and we may see 21 EMA this week.