European Open: Alibaba rallies on Softbank announcement

Asian Indices:

• Australia's ASX 200 index rose by 81.4 points (1.13%) and currently trades at 7,268.10
• Japan's Nikkei 225 index has risen by 316.87 points (1.16%) and currently trades at 27,601.39
• Hong Kong's Hang Seng index has risen by 551.24 points (2.27%) and currently trades at 24,880.73
• China's A50 Index has risen by 159.83 points (1.07%) and currently trades at 15,127.46

UK and Europe:

• UK's FTSE 100 futures are currently up 65.5 points (0.87%), the cash market is currently estimated to open at 7,632.57
• Euro STOXX 50 futures are currently up 39.5 points (0.96%), the cash market is currently estimated to open at 4,168.75
• Germany's DAX futures are currently up 122 points (0.8%), the cash market is currently estimated to open at 15,364.38

US Futures:

• DJI futures are currently up 139 points (0.39%)
• S&P 500 futures are currently up 76 points (0.52%)
• Nasdaq 100 futures are currently up 22.5 points (0.5%)

Asian equity markets were higher overnight with the Hang Seng leading the way as they tracked Wall Street higher. The Hang Seng is up around 2.5% and Alibaba was up nearly 7% after Softbank said their registration for Alibaba’s ADR’s is not related to any future transaction (ie selling a steak in the company). European futures are up around 0.8% and the US up around 0.5%.

FTSE 350: Market Internals

FTSE 350: 4261.57 (-0.08%) 08 February 2022

• 164 (46.46%) stocks advanced and 178 (50.42%) declined
• 9 stocks rose to a new 52-week high, 13 fell to new lows
• 33.43% of stocks closed above their 200-day average
• 98.58% of stocks closed above their 50-day average
• 13.03% of stocks closed above their 20-day average

Outperformers:

• + 6.08% - National Express Group PLC (NEX.L)
• + 6.02% - Carnival PLC (CCL.L)
• + 4.38% - Virgin Money UK PLC (VMUK.L)

Underperformers:

• -12.9% - Ocado Group PLC (OCDO.L)
• -10.9% - Micro Focus International PLC (MCRO.L)
• -8.58% - Airtel Africa PLC (AAF.L)

EUR/GBP coils in a tight range above key support zone

The euro was broadly higher last week following (what was translated as) a hawkish ECB press conference by Lagarde. Like most euro crosses, this saw EUR/GBP rally high before handing back some gains in a relatively gentle manner when Lagarde tried to walk back her hawkishness.

We can see on the hourly chart that prices for EUR/GBP are coiling up in a tight range, and that can be indicative of a burst of momentum. We would say it is a coin flip but there are several levels of support nearby which could be tough to crack, including the monthly R1 pivot and weekly pivot point, historical swing high and 38.2% Fibonacci retracement. Even if we see prices initially break lower we would then seek for bullish spikes to appear around the support zone as we anticipate momentum will eventually break higher. For now, the bias is for an upside break of the triangle.

Platinum and palladium form a base

Both metals have traded in either choppy or corrective phases recently, yet both now show the potential, to move higher over the near-term. A bullish engulfing candle has formed on the platinum daily chart above 1,000 and, due to market positioning, see the potential for it to head towards 1100. We’d like to now see a daily close above 1050.80 before assuming bullish trend continuation.

Meanwhile, platinum is holding above 2200 after a pullback and formed two bullish hammers over the previous two days. Moreover, yesterday’s hammer was a small bullish inside candle, so we’d like to see a break above 2300 before assuming bullish trend continuation.

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