THE week ahead could prove to be the most crucial in the relatively short history of the continent’s common currency. We now know that banks will have to raise capital – but markets are still hoping for news of just how much money the better-funded elements of the Eurozone are prepared to throw at the crisis. It doesn’t seem to address the fundamental issues however, so unless we see some bigger picture proposals, the euro may be in for a choppy spell. IG Index quotes euro-dollar at $1.3775-$1.3776.
The fortunes of the partially state owned Lloyds Banking Group have failed to improve in recent weeks. Its shares are sitting just a few pence above year-to-date lows, with the market still generally lacking in enthusiasm for the stock – and of course all banking stocks are trading at rock-bottom. However, with the likes of Germany and France poised to throw in a significant tranche of funds to bolster the EFSF, even lenders such as Lloyds that won’t directly be affected will be hoping this might mark a turning point. IG Index quotes 32.6p-32.7p.
The FTSE 100 behaved as we thought it might for the past week: finding support from the former resistance of the top of the trend channel it was in for months, around 5,360-5,400. There is reason for now to change that strategy: buy around these levels with a stop loss around 5,320, with a target of 5,550-5,600. Spreadco quotes the UK’s index of 100 of the most highly capitalised UK companies at 5,489.4-5,490.2.