Pre-Market Analysis And Chartbook: European Stocks Hit Multi-Month Lows

Tuesday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,882 -0.33%
DAX 30 11,901 -0.38%
WTI Crude Oil 74,53 0.42%
GOLD 1,191 -0.01%
Bitcoin 6,573 -0.47%
EUR/USD 1.1454 -0.32%

Stocks markets are broadly lower yet again today just after the US open, with pronounced weakness and multi-month lows in Europe. The major US indices holding up above yesterday’s intraday lows, but the declining short-term trends are intact in most cases.

The risk-off sentiment is apparent in forex markets too, as Treasury yields continue to test their highs, with the global yield curve being at the highest level in 7 years, the China-related fears still lingering, and with no resolution in the EU-Italy debate.

Dow 30 Futures, 4-Hour Chart Analysis

The DOW is in the most promising short-term technical setup among the key global benchmarks, and that’s usually not t bullish sign, as mega-caps in themselves aren’t enough to keep the market afloat. Small-caps in the US are still severely lagging the broader market, and the Nasdaq is also weak from a short-term standpoint, pointing to a flight-to-safety shift in the US.

With the week’s most important economic releases, the CPI and PPI indices coming out on Wednesday and Thursday, technicals are expected to dominate trading today, and the rising trendline in the DOW could be tested.

FTSE 100 Index CFD, 4-Hour Chart Analysis

The relatively weak FTSE 100 already broke below its recent swing low, and that doesn’t bode well for risk assets for the coming weeks, especially as emerging markets are also weak, and the rally in the other major European markets faltered too. The main British index hit an almost 5-month low today, together with the DAX and the EuroStoxx 50.

The weaker than expected German Industrial Production has been weighing on the already bleak sentiment, and the bearish technicals are also putting pressure on risk assets in Europe.

EUR/USD, 4-Hour Chart Analysis

The EUR/USD pair drifted to yet another 10-week low today in European trading, and although the momentum of the move is weak, the August low is now only 1% away. The broader Dollar index has been weaker thanks to the strength of the Yen in the past few days, but as the other major currencies lost ground compared to the Greenback, the Index is also hovering near its highest level since mid-August.

While emerging market currencies are still stable, the Chinese Yuan is dangerously close to its recent low, and a break-out in the USD/CNH pair could further destabilize global markets.

WTI Crude Oil, 4-Hour Chart Analysis

Commodities are having a slightly bullish session so far, with crude oil, gold, and copper all edging higher in early trading. While copper and gold are virtually unchanged near the US open, WTI Crude is still sporting gains, testing the $75 barrel again following the recent pullback, given the importance of that level, the next couple of days could see fireworks in the key commodity, and the support zone near $72.50 could be back in play.

ChartBook

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Nasdaq 100 Futures, 4-Hour Chart Analysis

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

DAX 30 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

Gold Futures, 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.