European Open: Markets retrace against Friday’s losses

Matt Simpson financial analyst
By :  ,  Market Analyst

Asian Indices:

  • Australia's ASX 200 index fell by -19.6 points (-0.27%) and currently trades at 7,259.70
  • Japan's Nikkei 225 index has fallen by -216.98 points (-0.75%) and currently trades at 28,537.64
  • Hong Kong's Hang Seng index has fallen by -124.09 points (-0.52%) and currently trades at 23,956.43
  • China's A50 Index has fallen by -8.15 points (-0.05%) and currently trades at 15,480.10

UK and Europe:

  • UK's FTSE 100 futures are currently up 93 points (1.32%), the cash market is currently estimated to open at 7,137.03
  • Euro STOXX 50 futures are currently up 63.5 points (1.55%), the cash market is currently estimated to open at 4,153.08
  • Germany's DAX futures are currently up 180 points (1.18%), the cash market is currently estimated to open at 15,437.04

US Futures:

  • DJI futures are currently down -9.42 points (-0.03%)
  • S&P 500 futures are currently up 193.75 points (1.21%)
  • Nasdaq 100 futures are currently up 42.75 points (0.93%)

Futures markets are higher as they seem less fearful of the covid variant than they were on Friday. It has been reported that Dr Fauci has told President Biden that vaccinations should provide ‘a degree’ of protection against the new covid strain. Yet trading volumes were very light so these rising prices could simply be corrective in nature unless we get a strong buy catalyst.

Trade could remain choppy whilst sentiment will likely be driven by covid headlines

It’s not uncommon to see choppy trade following an extremely volatile day, and as investors had the weekend to poor over covid articles and absorb the information, they’re likely in a wait and see approach before committing to any notable direction. On one hand the risk of lockdowns over Christmas is denting sentiment, yet there are also hopes that the mild symptoms reported could quash any draconian measures over the festive period. Either way, the only news in town this week of Omicron. And when we have a better understanding over its severity and impact on government polices we’ll have a much better idea of how 2022 will look

OPEC postpone meeting due to Omicron concerns

The meeting will likely take place on either Wednesday or Thursday to allow them more time to assess the potential impact of the new covid variant. WTI fell around 13% on Friday during low liquidity trade as the US celebrated Thanksgiving. However it also tracked futures markets higher as the gloomy sentiment of Friday abated, seeing WTI open back above its 200-day eMA and rise early in the session as it fills liquidity gaps.

AUD is the strongest major

The Australian dollar is higher across the board today, yet they’re simply retracements against Friday’s heavy losses as opposed being bid with any bullish conviction. JPY and CHF are the weakest majors whilst the US dollar sits in the middle of the pack.

AUD/USD is holding above 71c and Friday’s low, and we suspect a new catalyst is required for prices to break below it – such as Omicron being as bad or worse than feared. Otherwise, the risks are tilted to the upside from current levels, but we’re not convinced it will make a remarkable comeback without a positive covid story attached.

GBP/AUD hit our initial target of 1.8750 on Friday. We suspect prices will retrace lower before resuming the trend in line with its bullish flag breakout, but it could also head to 1.8900 if its flag target is reached.


USD/CHF produced a solid bearish engulfing candle on Friday although prices have recouped around a third of the day’s losses. A morning star pattern has formed on the four-hour chart, so perhaps we may see further corrective gains over the near-term. However take note of the weekly and daily pivot around 0.9270 which could be used by bearish swing traders, or confirm its next leg higher with a break above it. Higher resistance levels to monitor include 0.9300 and 0.9320, support at0.9200 and 0.9167.

Worst day in 17-months for the FTSE on Friday

To be fair it was not a pretty close for any major stock market index on Friday. But prices fell to just 44 points above 7,000 which took its decline from the November high to -4.9%. FTSE futures are up over 90 points so the cash index is expected to open around 7140. Resistance levels are nearby around 7165 and 7180, support is at 7100, 7045 and 700.


FTSE 350: 4038.19 (-3.64%) 26 November 2021

  • 21 (5.98%) stocks advanced and 327 (93.16%) declined
  • 3 stocks rose to a new 52-week high, 32 fell to new lows
  • 69.52% of stocks closed above their 200-day average
  • 32.19% of stocks closed above their 50-day average
  • 18.8% of stocks closed above their 20-day average


  • + 4.57%-Ocado Group PLC(OCDO.L)
  • + 3.18%-Games Workshop Group PLC(GAW.L)
  • + 1.75%-Pets at Home Group PLC(PETSP.L)


  • -16.04%-Carnival PLC(CCL.L)
  • -15.65%-SSP Group PLC(SSPG.L)
  • -15.23%-Wizz Air Holdings PLC(WIZZ.L)

Up Next (Times in BST)



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