Today is the start of 2 crucial weeks in the markets, so make sure you are ready. We will start with the FED interest rate decision and the FOMC statement on Wednesday, followed the next day by the rate decision by the BOJ and their press conference. It will be interesting to see if the BOJ will increase its stimulus or decides to keep it as it is. Also on Thursday we have a lot of data out of the UK, which will be overshadowed by the Brexit vote next week, which is likely to be a major mover in the market. We can see that already now with the latest polls, and that is likely only to increase.
CurrenciesEUR/USD – is moving further down as the fear of a Brexit are starting to hurt the EUR more and more. This morning we are seeing a small move up, but with the absence of any data today, it is likely to be only a correction.
USD/JPY – with the risk events gripping the markets, we can see the JPY strengthen as people are looking for safe havens. Technically we can see that we are trading just below the downwards trend line which was able to hold recently. We are close to reach the lowest level since October 2014.
GBP/USD – took another sharp dive on Friday and is continuing this move after yet another poll showed the pro Brexit camp ahead by the largest margin recently and also showing a majority this time (55%). If more polls are showing this, then it will become more and more likely that indeed a Brexit could take place. In that case we could be heading to test the lowest level we reached back in March around the 1.383 level. If we drop below this level we will be trading at the lowest level in over 7 years!
EUR/CHF – has been moving sharply down last week as there is more uncertainty in the markets. Just as the JPY, the CHF is considered a safe haven. In addition to this, the EUR is losing strength due to the expected negative results for the economy of the Eurozone if and when a Brexit will occur.
Bitcoin – is rising to the highest level in 2 years and is trading near the resistance around the 650 level. After breaching this level there is nothing much holding it back to move even higher. While still far away, but are we seeing an attempt again to reach the 1000 level?
IndicesDAX 30 – is dropping hard and fast in recent days as the sentiment is turning more negative. This is reinforced by the new Brexit polls. We finished trading on Friday near the support around the 9815 level, but currently we are trading much lower already, to reach the lowest level since April.
S&P 500 – dropped below the 2100 level again on Friday, as the market has turned more negative. The lower oil prices are also not helping obviously, and also the financial sector is moving doing. Obviously the impact of a Brexit will not be limited to only the UK and the Eurozone, but will likely have global consequences, although they will be without a doubt bear the brunt of it. Technically we are trading around the support at the 2078 level.
CommoditiesGold – the global uncertainty is driving gold higher, especially with the expectation that the FED will not make a move with the interest rate. As the market already doesn’t expect a change in the interest rate, the language of the FOMC statement will be even more important, as that is what will give us a hint of what is ahead.
Oil – has continued to move down as we saw that the number of active rigs increased for the second week in a row, something that hasn’t happened since August. In addition the anxiety in the markets regarding the economy is also not benefitting oil. However, we have to remember that we are entering a territory which has acted as support recently. In order to really see a change in direction, we would need to drop below the 47 level. When that happens, we can expect a further move down, unless we see fundamentals change.
StocksApple – will hold its yearly developers event today, so we will be waiting to see if anything interesting will come out of that.
Intel – will reportedly be producing the chips for the iPhone from now on, giving the company some much needed financial relief, as it should offset some of the losses due to the slumping PC market.