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The Pound Rebounds & Oil Is Firmer: Market Update

By AvaTradeMarket OverviewJun 12, 2017 07:18AM ET
www.investing.com/analysis/the-pound-rebounds---oil-is-firmer:-market-update-200195085
The Pound Rebounds & Oil Is Firmer: Market Update
By AvaTrade   |  Jun 12, 2017 07:18AM ET
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Oil is firmer this morning after last week’s sharp sell-off. A decline in technology stocks sent US indices lower. The pound has rebounded after last week’s disappointing UK general election results.

Commodities

Crude Oil

Oil declined almost 4% last week. The sell-off came after an unexpected increase in US inventories coupled with a large increase in natural gas storages. After the sharp decline, oil is starting to stabilise.

Oil is hovering at $46 this morning, unable to break through that level. Momentum for this commodity is weak.

Support level is at $45.70, resistance is at $46.10

Gold

The decline in US assets and increased perceived risk caused a rally for gold. The precious metal shot up 0.1%

This week’s US interest rate decision might spur a sell-off for this safe-haven asset. The Federal Reserve are expected to increase interest rates by 25 basis points which would increase demand for the dollar and thus drag down gold.

US equities

Technology stocks including Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), Samsung (KS:005930) and Microsoft (NASDAQ:MSFT) sharply declined on Friday. The sell-off took 0.1% off the S&P 500. Meanwhile, the Nasdaq 100 shed 1.8% of its value. The bearish tones came after Robert Boroujerdi, global chief investment officer at Goldman Sachs Group Inc (NYSE:GS)., cautioned that low volatility in tech stocks may be hiding the perils of regulation and cyclicality.

European equities

The US sell-off sent bearish tones through equity markets. European equities are all trading downwards. Britain’s FTSE 100 is following its European counterparts and trading lower this morning.

Forex

GBP

The pound clawed onto gains after last week’s general election results left the British with a hung parliament. With no overall majority, Theresa May scrambled to form a government and settled for a coalition with the Democratic Union Party.

Possible bullish movements may form supported by an upswing in moving averages and an upward sloping momentum curve.

GBPUSD

USD

The dollar is weaker in the run-up to this week’s interest rate decision. After three days of gains the greenback is 0.1% weaker against its peers.

The dollar is close to 2017 lows.

EUR

Thanks to the weaker dollar, investors are plunging bullish bets into the euro, up 0.1% today.

EURUSD

Up 0.2% this morning, the EURUSD looks set to remain bullish thanks to an upward slopping moving average and supportive upward sloping momentum curve.

JPY

The rally in riskier assets this year has pushed this safe-haven currency lower. However, even the recent sell-off in equity markets hasn’t spurred interest in this safe-haven asset.

The Japanese yen had a bout of the Monday blues with disappointing economic data, sending the currency lower. Japan Domestic Corporate Goods Price Index (YoY) came in at 2.1%, below forecasts of 2.2%. Additionally, Japan Machinery Orders (YoY) missed the mark at 2.7% expectations were at 6.3%.

USDJPY

Possible bullish movements could form later today with support at 109.21 and the resistance level at 110.81, thanks to an upward sloping momentum curve.

Cryptocurrencies

Ethereum

Ethereum has added 43.67% to its value today after bitcoin reached record levels.

Ethereum has added 4800% to its value in 2017.

Investors are optimistic about the underlying blockchain Ethereum offers which has been adopted by companies such as JPMorgan (NYSE:JPM) and Microsoft.

Dash

Another all-time high was reached by Dash this morning. This digital asset climbed 23%, fuelled by the rally in Ethereum.

The Pound Rebounds & Oil Is Firmer: Market Update
 
The Pound Rebounds & Oil Is Firmer: Market Update

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