World Markets Today: Volatile on Currency Moves, Fed Speech

18 Jan, 2017 (8:49AM IST)

17 January 2017 (10:21 PM EST)

Stock markets around the world are under pressure and highly volatile on choppy moves in currency markets. Sterling is trading lower today after zooming yesterday on higher inflation and Brexit speech by the British Prime Minister Theresa May. On the other hand, the Dollar index fell down yesterday on president elect Trump’s comments that dollar is too strong. Today, this index is trading slightly positive.

The Federal Reserve’s Chair, Janet Yellen will be speaking about economic goals on Wednesday afternoon (EST) and tomorrow, the European Central Bank will declare its monthly monetary policy.

These all events have high impact value for markets and therefore, global markets are expected to remain subdued, range bound and highly volatile.

Asian markets are trading mixed, with Japan, Australia and South Korea negative and China and Hong Kong positive. SGX Nifty is slightly positive, but range bound, hinting at a similar pattern in Indian markets today.

U.S. and European stock futures are mildly positive, indicating that these markets will continue to traded within their previous range. One notable pattern in these bigger markets is, both DAX (Germany) and Dow Jones have touched their range supports more than once in last few sessions. That indicates weakness and it will be interesting to see when these supports are breached. For Dow Jones, this support is at 19,700 and for DAX, 11,500 marks this range support- which was breached very convincingly yesterday before the index bounced back and closed above this important level.

In range bound markets, it is better to watch resistance and support levels and follow the trend from these levels. If price bounces from support then buy, and if there is a reversal from resistance then sell.

Watch how your local index trade and trade accordingly.

Good luck, enjoy the session!

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