Weekly Market Report – 15.10.2018
CurrenciesEUR/USD – the breach of the resistance around the 1.1375 level was short-lived as we saw a turnaround in the USD. In addition, we have to take into consideration that a Brexit will also have negative implications for the Eurozone, and as such, as we approach the Brexit vote we can see that the EUR will be more and more impacted by the polls.
USD/JPY – reversed course yesterday as the USD strengthened across the board. We can also see there is some support to be found along the downwards trend line in recent days. With the risk events coming up, we could see a move towards the safe havens as is usually the case, but as we have the BOJ decisions next week as well, this move could be more limited than usual.
GBP/USD – continues to slide as we slowly approach the Brexit referendum in just under 2 weeks now. There have been a lot of warnings on the implications on the UK economy if a Brexit were to take place, and with the polls showing a close race, there is a lot of fear which is pulling the GBP down. We are again trading around the 1.444 level.
IndicesDAX 30 – is finding some support around the 10,038 level. The Brexit will without a doubt also have an impact on the European economy, and as such we are likely to see more volatility in the EUR as well as the European indices such as the DAX.
S&P 500 – is moving down from the highest levels in nearly a year, as we are seeing a correction after a nice upwards move since last month which saw the S&P rise by nearly 100 points. In addition to this, we are getting a lot of risk events in the coming 2 weeks, with the FED interest rate decision, FOMC statement, the BOJ rate decision and press conference and the week after the Brexit. It is very possible that we will see risk-off sentiment as we approach these events.
CommoditiesGold – was able to turn around even though the USD strengthened and reached close to the next resistance around the 1276 level. Market uncertainty is another factor that is driving the price of gold up now, especially the fears of a Brexit.
Oil – is continuing to drop after having failed to breach the resistance around the 51.7 level. The USD is also strengthening which is weighing on oil, but also a dimmer economic outlook is having an influence. We will be looking ahead to the active rig count this evening, as it will be very interesting to see if we see a continued increase, as we did last week. If that is the case, we could see production in the US increase again.
StocksYahoo – has received numerous takeover bids of around $5 billion, making the offer reported earlier from Verizon of $3 billion, one of the lower bids and therefore it is unlikely that Verizon will succeed, unless they increase their offer.