MARKET BRIEFING – LONDON OPEN 28.07.2015
The Chinese market continues to plummet, with the collapse is now compared to the US stock market crash in 1929.
In the yesterday’s selloff the benchmark for the mainland stocks index sunk to 3.725,56 which is 8.5%, with many equities down to more than 10%. It is estimated that the total decline since June amounts to 38%.
The plunge came quite unexpected as the government rescue programme had helped the index 16% up since July 16.
The Government of the China has made numerous efforts to support the markets, which up to now however brought little result. Among the measures were the ban of the major shareholders from selling their stock and IPOs suspension. Additional interventions to sustain the market were also convened however, were not very effective on the background of the generally slowing down the Chinese economy.
Yesterday China Security Regulatory Commission issued the statement, where it was remarked that the support for the equities will be prolonged and the government will “continue efforts to stabilize market and investor sentiment.”
Despite the continuous efforts by the Government to stabilize the markets investors “are concerned and lost,” as Bloomberg reports.
The Chinese market transparency has always been a concern it continues. “In a market where unprecedented intervention has made government money one of the biggest drivers of share prices, authorities aren’t transparent enough for investors to make informed decisions.”
Numerous markets and currencies were affected by the economic decline of the second world largest economy. China is the Australia’s largest exporting market, with now significantly reduced demand for the country’s raw materials caused the Australian Dollar to decline to six years low, reaching 0.7256 mark yesterday.
Canadian Dollar was in no better condition, continuing to lose its value dramatically with the price of USDCAD surpassing 1.3100 level on Friday.
Russian Rouble was not put aside by the market trend when USDRUB reached the four-month high to almost 60.00 mark yesterday.
The situation is putting downward pressure on the commodities, causing the Oil and Gold prices weaken further.
EURUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.1203
Target 2: 1.0973
Projected range in ATR’s: 0.0115
Daily control level: 1.1215
GBPUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.5664
Target 2: 1.5452
Projected range in ATR’s: 0.0106
Daily control level: 1.5670
USDJPY
The intraday technical outlook
Trend 1 hour: Down
Target 1: 123.98
Target 2: 122.49
Projected range in ATR’s: 0.740
Daily control level: 123.00
USDCHF
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.9703
Target 2: 0.9525
Projected range in ATR’s: 0.0097
Daily control level: 0.9400
USDCAD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.3135
Target 2: 1.2939
Projected range in ATR’s: 0.0098
Daily control level: 1.2675
AUDUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 0.7355
Target 2: 0.7183
Projected range in ATR’s: 0.0085
Daily control level: 0.7490
GOLD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1110.49
Target 2: 1079.03
Projected range in ATR’s: 15.73
Daily control level: 1160.00
OIL
The intraday technical outlook
Trend 1 hour: Down
Target 1: 48.55
Target 2: 45.45
Projected range in ATR’s: 1.55
Daily control level: 51.00
MORE ON ACFXblog.com