Daily Analysis: Pound Turns Volatile as Brexit-Worries Return

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2549 0.04%
DAX 12970 0.15%
WTI Crude Oil 51.27 0.69%
GOLD 1287.00 -0.48%
Bitcoin 4847 -0.68%
EUR/USD 1.1842 0.30%

Record low volatility, new all-time highs in stocks, everything seems rosy on Wall Street and in the broader financial market. That is, until you consider valuations debt levels and other old-school, pre-central bank bubble measures.

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For now, the bull market party is on, and with Wal Mart kicking off third-quarter earnings with a buy-back announcement, the major indices are somewhat higher, even though right now the short-term indicators also suggest caution for equity investors.

As the worries regarding Catalonia took the backseat, European stocks also edged higher, but the second day of gains in Japan was more meaningful especially given the 23-year high in the Nikkei Index. While the rally shows the relative strength of Asian equities, it’s also a clear warning for those who think that valuations and debt levels won’t matter in the long run. The Japanese benchmark is still well off its.

Nikkei Index, Weekly Chart Analysis

Gold gave back some of its gains from yesterday, thanks to the less nervous environment, while the Euro strengthened for het same reasons against the Greenback. Besides the common currency, forex markets are also in hibernation, as the major pairs are all close to unchanged in the choppy environment.

EUR/USD, 4-Hour Chart Analysis

OPEC-related speculation keeps energy markets active, but despite the supply-cut talks, the WTI contract of crude oil is still just above the $50 level, as even the cartel admits that without the shale players, there is a “hard cap” above oil prices.

Cryptocurrencies

The crypto segment settled down after the early-week volatility and the underlying bullish trend seems to be in no danger despite the scary dip in altcoins. Bitcoin is a totally different story, as the most valuable digital currency is just a tad off its all-time high near the historic $5000 level. Ripple has been the other market leader, and although it entered a volatile short-term correction, the currency remains clearly in a bullish trend, and a rally to $0.30 from seems to be baled in the cake for the coming weeks. The other majors are basically unchanged since yesterday’s bounce, and the low-volatility environment is encouraging for the coming period.

Ripple has been the other market leader, and although it entered a volatile short-term correction, the currency remains clearly in a bullish trend, and a rally to $0.30 from seems to be baled in the cake for the coming weeks. The other majors are basically unchanged since yesterday’s bounce, and the low-volatility environment is encouraging for the coming period.

XRP/USDT, 4-Hour Chart Analysis

Technical Picture

Gold is at an interesting technical juncture, as the short-term declining trend is now broken but the key $1300 resistance is still ahead for the precious metal. The long-term picture is clearly positive, despite the undoubtedly risk-on sentiment, but further consolidation is possible before the next major leg higher. That said, the current levels still look attractive from an investment standpoint.

Gold, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
16:00 US JOLTS job Openings 6.08 mill 6.13 mill 6.14 mill
20:00 US FOMC Meeting Minutes

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
14:30 CANADA NHPI 0.3% 0.4%
14:30 US PPI Index 0.4% 0.2%
14:30 US Unemployment Claims 255,000 260,000
16:30 EUROZONE Mario Draghi Speaks

Featured image from Shutterstock

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