This area has provided a decent point of entry for traders in the past, so any close below it, especially on a weekly basis, would probably have bearish repercussions.
Vedanta Resources has seen its share price decline by some 25% over the past month. However, the bargain-hunters have stepped in today and the mining company has taken the top spot on the UK benchmark, adding 2.48% in early trade.
Given the declines in gold and silver prices over the past year, there has been a degree of rotation among gold enthusiasts to Bitcoin. The fact that the People's Bank of China has slammed the virtual currency earlier this morning may well prompt a favourable return to the precious metal in the near term. And, while the overall downtrend is still intact for gold, there is still a lot of support around the June low of $1200/oz. Nevertheless, some of the bounce can be attributed to short covering.
Tesco, as was expected by some, did not issue a profit warning during yesterday’s trading update. Yet the supermarket is still out of favour today, aided and abetted by yet another broker downgrade. Fierce competition in the sector and loss of market share over the past year has pushed the share price down by 14% over the past six months. It has lost 8p today alone.
The European Central Bank is unlikely to make any changes to monetary policy today. Yesterday's services PMI from eurozone member countries was a mixed bag, and producer price inflation has fallen more than expected, but it seems probable that the central bank will wait for the recent rate cut to take hold before making any more cuts. 2014 may well see the ECB rifle through its not-so-extensive toolbox, and we may get some clues about what actions will be taken to address credit conditions and disinflation concerns.
Dovish language will be the order of the day and, in light of the single currency strength, which has defied all recent jawboning about negative interest rates, we can expect some volatility in the euro crosses.
The pound can do no wrong lately, establishing two-year highs against the US dollar this week. The content of the autumn statement today may give pause to the sterling bulls, especially if George Osborne offers up any surprises.