Energy stocks slipped this morning thanks to a sharp decline in oil prices. Forex is muted ahead of the UK general election.
Forex
USD
Fiscal stimulus from the Trump administration now looks unlikely as Washington becomes soaked in political scandals and uncertainty. The dollar has decreased 4.4% since January.
EUR
The euro is slightly down ahead of the European Central Bank interest rate decision later today. Investors are betting that President Mario Draghi will have a dovish outlook for future inflation expectations, thus are selling off their euro holdings.
EURUSD
Momentum is slowing down for this currency pair. On the other hand, we can see a possible bullish movement thanks to an upward sloping moving average. Support level is at $1.1237 and resistance is at $1.1289. However, low volatility persists, leading me to believe that the currency pair will remain subdued for the morning.
GBP
Ahead of today’s highly anticipated general election in the UK, the pound is virtually flat. Expect volatility later in the day.
The latest polls suggest current Prime Minister Theresa May’s Conservative party has a 12-point lead over Jeremy Corbyn’s Labour party. If the Conservatives gain a strong majority over Labour the pound should strengthen.
Momentum is tipping downwards, however the moving average is slightly upwards. The pattern is still in the process of forming.
GBPUSD
AUD
The Aussie dollar is 0.2% weaker against the US dollar thanks to data showing the nation’s trade surplus fell to its lowest point in six months.
Momentum and moving averages for AUDUSD are moving upwards meaning a bullish tone could form in the next 24 hours.
JPY
The Japanese yen fell after an unexpected downward revision to GDP growth in the region erased profits for the currency.
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Commodities
Gold
Gold edged lower today ahead of the UK general elections as investors favour risker assets. While the election results unfold watch out for an increase in demand for this safe-haven asset.
Another potential stimulus for gold is James Comey’s testimony due to be given later today. The former director of the United States Federal Bureau Investigation is revving up to divulge details about his interactions with Trump.
Finally, there is the ECB meeting, where facets of the future for interest rates will be disclosed by President Draghi.
This flurry of uncertainly means gold may increase throughout the day.
Crude Oil
After an increase in US inventories, oil declined sharply and is now struggling at $46.07. Investors have lost confidence in OPEC’s ability to keep storages down, thus have engaged in an intense sell-off.
Support is now at $46 and resistance is at $46.20.
Global Equities
The world’s littered with uncertainty. From rising unrest in the Middle East to an uncertain UK election and the scandals emerging from Washington, the markets should be recoiling in fear.
However, financial markets are largely ignoring the geopolitical tensions and global stocks are just 0.4% away from all-time highs.
European equities
Stocks rose this morning ahead of the European Central Bank policy decision. While we don’t expect that interest rates will remain steady, we will be listening closely to any clue president Draghi gives about future policy changes.
Equities will also be affected by the results of today’s UK general election.
US equities
Comments from James Comey confirmed Trump tried to make him drop the Russian investigation. Stocks have largely shrugged off the affair, trading slightly upwards.
Cryptocurrencies
Bitcoin
Mark Cuban, an influential entrepreneur, sent Bitcoin tumbling. Cuban asserted that the digital asset is not a currency. The comments sent Bitcoin down 5% on Tuesday. Cuban took to Twitter, ranting about the cryptocurrency and calling the recent rally a ‘’bubble’’ before going on to say that the blockchain ‘’is very valuable and will be at the core of most transactions in the future. Healthcare, finance etc..’’
Bitcoin has recovered slightly, now at $2680.
Ethereum
This digital asset has advanced 3000% in 2017. Ethereum is still hovering around its high of $263 at $257, up 2.2% this morning.
The cryptocurrency has recently caught the attention of Vladimir Putin. Ethereum could be used as a tool to help Russia diversify its assets beyond oil and gas.