World Stock Markets Next Week: Central Banks, Technicals in Focus

8 September 2019

Next week, the European Central Bank’s policy declaration (Thursday) will be the main market-moving event. Before that, world stock markets could follow their technical signals and be in a rangebound trend.

US stock markets have reached their monthly range tops and now that it looks certain that the Federal Reserve will go for the nominal 25 basis points rate cut in its meeting later in the month and not for the 50 bps cut, US stock markets may become slow-paced near their previous week’s high levels. On monthly charts, US stock markets have been making a “higher low” pattern which indicates an uptrend. But their monthly range tops have been posing very strong resistance and to break out of that, these markets need some big fiscal benefits.

The US-China trade talk enthusiasm has run its course and now markets are seeking another booster to break out of their previous year’s range. Till that happens, US stock markets and following them the world stock markets can remain rangebound.

In just a few hours, the Asia session will start and the trend in US stock futures will lead to a trend in global stocks. If US stock futures turn lower from their technical resistance levels, world stock markets will follow that trading pattern. If these futures succeed in continuing their previous rally and break out of their current monthly range, that will indicate the end of yearly sideways trend and start of an uptrend.

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