Sterling suffered its most volatile session in living memory and hit its lowest level since 1985 as Britain voted to leave the European Union, triggering a move into safe-havens such as the yen, the dollar, gold and the Swiss franc. The markets appear to be in a nervous situation after optimistic swings yesterday. People are selling the pound, causing it to drop by more than 10 percent to $1.3300, its cheapest level since September 1985. Yet the euro was under pressure against most other currencies as investors fear that the Brexit could spark anti-establishment movements in other European countries, some of which have already seen a decline in traditional political parties. Futures on the FTSE 100 Index plunged with S&P 500 Index contracts as Asian stocks dropped by the most in five years. Bank of England promised to take all necessary steps to ensure stability in the markets while Japanese Finance Minister Taro Aso declined to comment when asked about the possibility of joint G7 intervention.
The euro fell near three-month lows against the dollar after the U.K. finally voted to move out of the European Union with Brexit officially declared. Downside pressures remain strong as the Brexit now could trigger another referendum wave, with markets anxious on whether the French and Dutch will also call for a vote out of the EU. Markets now await for the UK Prime Minister Cameron’s speech post the Brexit aftermath, with the Prime Minister scheduled to speak at next week's European Summit.
Pivot: 1.13Support: 1.13 1.1265 1.1215Resistance: 1.1355 1.1385 1.1415Scenario 1: short positions below 1.1240 with targets @ 1.0900 & 1.0820 in extension.Scenario 2: above 1.1240 look for further upside with 1.1340 & 1.1400 as targets.Comment: the RSI has broken down its 30 level.
Gold
Gold surged to the highest level in more than two years after markets shifted towards safe haven assets following Britain’s vote to leave the European Union after a historic poll. Golld prices jumped as much as 8.1 percent to $1,358.54 an ounce, posting the biggest daily jump since 2008 and reaching the highest price since March 2014. Gold was supported by turmoil in global financial markets as the pound was driven to the lowest level in more than three decades and as equities plummeted with investors moving away from risky assets.
Pivot: 1297Support: 1277 1272 1265Resistance: 1297 1308 1315Scenario 1: long positions above 1294.00 with targets @ 1368.00 & 1393.00 in extension.Scenario 2: below 1294.00 look for further downside with 1271.00 & 1250.00 as targets.Comment: the RSI broke above a declining trend line.
WTI Oil
Oil prices slumped by more than 6% on Friday after results of a referendum that showed Britain had voted to leave the European Union, causing huge market uncertainty and fracturing European efforts to forge greater unity. Financial markets have been troubled for months by worries about what a British exit from the European Union would mean for Europe's stability, but were clearly not factoring in the risk of a leave vote. Oil prices had risen more than 30% this year before Thursday's fateful UK vote. Today energy traders will focus on Baker Hughes weekly data on the U.S. oil rig count.
Pivot: 48.6Support: 48.6 47.77 47.3Resistance: 49.7 50.2 50.7Scenario 1: short positions below 48.40 with targets @ 45.90 & 45.10 in extension.Scenario 2: above 48.40 look for further upside with 49.10 & 50.56 as targets.Comment: the RSI is capped by a declining trend line.
Japan 225 (Yen)
A British vote to leave the European Union sent sterling plunging on Friday and hammered equities across the world as turmoil moved global markets. This turn of global confidence could well prevent the Federal Reserve from raising interest rates as planned this year, and might even provoke a new round of emergency policy easing from all the major central banks. Risk assets suffered as investors moved to safe havens such as the Japanese yen and gold. Japanese stocks took the biggest hit, dropping to five-month lows while the Nikkei dived as much as 8.3 percent, reaching the lowest since February. A sharp surge in the yen added to downward pressure on the Nikkei as investors sought safe havens.
Scenario 1: short positions below 15750 with targets @ 14500 & 14000 in extension. Scenario 2: above 15750 look for further upside with 16350 & 16800 as targets. Comment: the RSI is bearish and calls for further decline.