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Market Wrap


The US earnings season is upon us and the equities markets are not holding the all-time highs. Nasdaq traded into the H4 Ichimoku cloud where it found support, but the break of the recent swing lows is a worry for the bulls. Netflix & Johnson and Johnson are among those companies putting out earnings reports today as the Nasdaq and the rest of the world’s equity complex fall into a sea of red. Proctor & Gamble announced that net sales had risen by 5% year-on-year to $18.1 billion but with the number of Covid cases rising in the USA this relatively good economic news was overlooked.


European equities dropped heavily at the end of the London trading session today due to continued uncertainties with the coronavirus pandemic. Johnson & Johnson COVID-19 vaccine was issued a blow today by the European Medicines Agency (EMA) as they warned of a link to unusual blood clots and recommended the vaccine should come with a warning.

This after a review of 8 cases of thrombosis which had a combination of low platelet levels in the USA, after 7 million people have already been given the vaccine, seems to be a headline story that doesn’t warrant much concern considering the number of deaths to the disease in America.


The FTSE 100 was down 2% today as British American Tobacco share price plummeted nearly 8% on news that the US administration could force cigarettes to have a reduced amount of nicotine content, so as to make them less addictive. This could work in the tobacco makers' favor in the short term as anyone addicted to nicotine, would probably buy more products to get the required hit. But the market was spooked and doesn’t see the potential upside.


Cable fell throughout the London session and remains at the day’s lows into the middle of the US session. The ActivTrader sentiment index has the majority of traders bearish the pair, even after the impulsive move up yesterday. Today’s price action is in a tight range and looks to be corrective rather than a change in direction, however, if the price cannot take out yesterday’s highs, we could at least see 1.3920 acting as a significant swing low this week.


The EURGBP that tends to trade inverse to the GBPUSD did benefit from the weaker pound but has found resistance around the 0.8630 level which has been previous market support.


The US dollar index has remains supported at a previous balance area just above the 90.770 price level but hasn’t had much movement and still needs to test the previous support level it broke through with conviction yesterday. Today’s price action could be just a pause while we await more news and if so, the 89.20 level would be my next target below.

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