FTSE 100 JUMPS ON MARKS AND SPENCER ACQUISITION RUMOURS

The euro was under intense pressure on Monday as some European capitals saw waves of protests because of the new Covid-19 mandates. Protests continued in Vienna, Austria’s capital and in Brussels. Other countries like Italy, the Netherlands, Switzerland, and Croatia saw protests. These countries, including Germany, are considering reinstating lockdowns as the number of Covid-19 cases rises. A return to lockdowns will likely lead to slower recovery of the economy. As a result, the European Central Bank (ECB) will likely be under pressure to maintain a dovish stand.

The price of crude oil continued its downward trend as demand and supply concerns remain. Demand issues are mostly because of the rising number of Covid cases in some European and Asian countries. A return to lockdowns will have a negative impact on demand. At the same time, oil has dropped as some important countries consider pumping their strategic reserves. In the US, the Biden administration is considering using these reserves to stabilize prices as his approval rating slide. Other countries seeking to use their reserves are China and Japan.

UK stocks rose slightly as interest in more UK companies continued. The best performer in the UK was Marks and Spencer. The company’s shares jumped by more than 3.1% after news emerged that Apollo was interested in the company. According to the Sunday Times, Apollo has been assessing the viability of the company’s prospects. Apollo believes that the company is undervalued. The acquisition will come a few months after Morrisons was acquired. Asda, a leading retailer was also acquired.

UK100

The FTSE 100 index rose to a high of £7,252 after Morrison’s acquisition news. This price is slightly above last week’s low of £7,196. It remains above the 23.6% Fibonacci retracement level. Also, the index has dropped below the 25-day and 50-day moving averages while the MACD has moved below the neutral level. Therefore, the index will likely resume the bearish trend as this enthusiasm wanes.

EURUSD

The EURUSD pair declined sharply as investors reflected on the new Covid wave in Europe. It dropped to a low of 1.1280, which was the lowest level since July 2020. On the four-hour chart, the pair has moved below the 25-day moving average. It has also moved slightly above the lower line of the Bollinger Bands while the MACD is also below the neutral line. Therefore, the pair will likely keep falling, with the next reference level being at 1.1200.

USDCAD

The USDCAD pair is hovering near its highest level since October 1 as the dollar strength continues. The pair’s upward trend is being supported by the 25-day and 50-day moving averages. The MACD and the Relative Strength Index (RSI) have continued rising. Therefore, while a pullback is likely, the pair will continue in a bullish trend in the coming days.