Pre-Market Analysis And Chartbook: Euro Hits 6-Week Low

Tuesday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,926 -0.12%
DAX 30 12,252 -0.71%
WTI Crude Oil 75,08 -0.48%
GOLD 1,209 1.44%
Bitcoin 6,526 -0.69%
EUR/USD 1.1538 -0.34%

Global stock markets are mixed after the US open, with the main European indices being significantly lower amid the growing tensions surrounding the Italian budget proposal. The US market is once again standing strong despite the overseas headwinds, with the Dollar’s strength still not hurting the most bullish market globally.

DAX 30 Index CFD, 4-Hour Chart Analysis

The DAX and the EuroStoxx 50, on the other hand, are still struggling to manufacture a durable rally and the German index is still hovering around the dominant declining trendline, although the current short-term pullback is still limited from a technical perspective. Yesterday’s much worse than expected German retails sales number is still weighing on stocks, but for now, there is still hope for bulls that the September rally will continue.

After yesterday ’s stability, emerging markets dipped lower too, and that could point to contagion and a broader risk-off shift in the coming days.

S&P 500 Index Futures, 4-Hour Chart Analysis

The S&P 500 is only slightly lower today after yesterday’s ugly end to the US session, and the Dow and the Nasdaq are also little changed so far. All three benchmarks are just off their record highs, and at least on the level of the indices, the US market is weathering the European turmoil with ease.

The severely lagging small-cap segment is once again looking troubling for equity bulls, with the Russell 2000 underperforming the broader market.

EUR/USD Break-Down Would Point to Trouble Ahead

EUR/USD, 4-Hour Chart Analysis

The most traded forex pair is trading just above the 1.15 level after testing the support zone around it in early trading, as we expected. The pair has been under pressure ever since the Fed-day last week and a clear break below the 1.15 level would warn of a test of the August low, which in turn could lead to another selloff in emerging markets, as the ongoing Dollar-funding crisis could further deepen.

On a slightly positive note, the broader Dollar index only trading at its highest level since early September, while the Euro hit a 6-week low today in early trading.

Gold, 4-Hour Chart Analysis

Commodities are mixed once, although today, copper and gold are showing surprising strength in the face of the rally in the Dollar. While copper is still trading in a consolidation pattern that developed after the late-September surge, gold recovered from a bearish break-down, possibly forming an important reversal.

Despite the strong rally today, the precious metal still faces stiff resistance near $1220, and that zone capped the rally attempts in gold for more than a month. A move above that zone could trigger a quick rally towards the next major zone near $1245, but gold needs to stay above the crucial support zone near $1180.

ChartBook

Major Stock Indices

Nasdaq 100 Futures, 4-Hour Chart Analysis

Dow 30 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Forex

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

WTI Crude Oil, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

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Author:
Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.