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Euro starts sprinting after France approves EUR100 Billion aid pack – Market Analysis

Euro starts sprinting after France approves EUR100 Billion aid pack – Market Analysis


Today's session started with rises in European stock indices driven by news that France has implemented a 100 Billion Euro fiscal stimulus package to relaunch its economy.

European stocks have risen above 1%, and the Euro has slowed the decline it has been experiencing in the last two days.

But this movement has not been supported by the future indexes of the United States. A relatively good jobless claim data, somewhat better than expected 881k vs. 950k, has not been enough to encourage the American markets to continue their relentless upward path of recent weeks.

In this sense, the non-farm payroll figure that will be published tomorrow and which is expected to create 1,400k jobs may be decisive. But the risk is skewed to the bearish side. A figure that disappoints the market, lower than expected, could precipitate significant corrections given the technical situation of overbought and the signs of divergences.

In this regard, it is interesting to observe the VIXX's behavior since the middle of last month. This index reflects the intrinsic volatility of stock indices, specifically the USA500.

In general terms, a fall in the index or what is the same in volatility anticipates positive periods in the stock markets that are reflected in sustained increases. But for three weeks, this index has begun to rebound from the lows reached on August 10.

This is a sign that institutional investors who use more sophisticated instruments to manage their investments have begun to hedge through the purchase of derivatives (options) that increase the level of volatility.

The mainstream of retail investors has continued with their outright purchases. Still, the risk of a forced sell-off partly due to many positions in derivatives increases, and VIXX reflects it.

The stock index with the best performance throughout this post-COVID rally has been the TECH100, with an impressive and never seen rise of almost 87% in just five months.

Whether the economy recovers is a diversification of investments towards more cyclical stocks as if the economy does not heal as expected or suffers a setback, this index is vulnerable to corrections of greater depth.

Today and as we can see in the 4h chart, it is creating a reversal pattern that would activate below 12180, the current level, and that would take it to the next intermediate support zone around 12,000.

Maklumat/penyelidikan ini disediakan oleh Miguel Ruiz (“tpenganalisis penyelidikan”) dan tidak mengambil kira objektif pelaburan tertentu, keadaan kewangan atau keperluan khusus individu. Penganalisis penyelidikan bertanggungjawab terhadap kandungan laporan penyelidikan ini, samada sebahagian atau keseluruhannya, memperakui bahawa pandangan mengenai syarikat dan sekuriti mereka yang dinyatakan dalam laporan ini jelas mencerminkan pandangan peribadi dan pedagang bertanggungjawab sepenuhnya ke atas risiko mereka sendiri.

Penyelidikan yang disediakan bukanlah pandangan JME Financial Services (Pty) Ltd ataupun undangan untuk melabur dengan JME Financial Services (Pty) Ltd. Penganalisis penyelidikan juga memperakui bahawa tiada sebahagian daripada pampasannya, adalah, atau akan, secara langsung atau tidak langsung, berkaitan dengan cadangan atau pandangan tertentu yang dinyatakan dalam laporan ini.

Sehingga tarikh laporan diterbitkan, penganalisis penyelidikan dan pasangannya dan/atau saudara-mara yang bergantung kepada penganalisis penyelidikan, tidak memegang kepentingan dalam sekuriti yang dicadangkan dalam laporan ini (“kepentingan” termasuk pemilikan langsung atau tidak langsung terhadap sekuriti).

Penganalisis penyelidikan tersebut bukanlah di bawah JME Financial Services (Pty) Ltd. Anda digalakkan mendapatkan nasihat daripada penasihat kewangan bebas mengenai kesesuaian pelaburan, di bawah penglibatan berasingan, seperti yang anda anggap sesuai dengan objektif pelaburan tertentu anda, keadaan kewangan atau keperluan kewangan tertentu sebelum membuat komitmen untuk melabur.

Undang-undang Republik Afrika Selatan akan mengawal sebarang tuntutan yang berkaitan dengan atau yang timbul daripada kandungan maklumat/ penyelidikan yang disediakan.