The Safe Haven Wind Down | Bulletin
As investors turn risk-on equities this week, both Gold and Silver experienced a significant sell off, based on news that the US may remove tariffs on China. This led to US Stocks recording new all-time highs, with the Dow Jones up over 2.3% this week and a safe-haven trade wind down, as Gold and Silver slumped 2.3% and 5.2%, respectively.
This news has still not been confirmed by US Trade authorities, however we could continue to see speculation drive markets for today’s trading.
Gold and Silver, now trade at key support levels, wicking to the October 1st low of $1,460 per ounce, with buyers looking for an opportunity to “buy the dip” or look for shorter-term reversals. The chart below shows several ranges that Gold has formed over the last few months, and investors will be looking for this to remain consistent barring any other stimulus news, with bulls looking to potentially target a retracement towards the $1,475 mark.
GBP/USD Stuck at 1.28 Handle
The Bank of England gathered yesterday as two MPC members voted for an interest-rate cut, which weighed on GBP bulls, who are still fighting to hold up the 1.28 level. The pair reached fresh two-week lows, with bears now looking to breach the 1.28 handle. See chart below.
BOE Governor Mark Carney, in the post meeting conference, said that risks to UK growth remain skewed to the downside, suggesting the BOE could eventually shift towards a cut, with a view of supporting the economy during a potential downturn.
Other Important Events
►The RBA, who held interest rates, said that Australia is slowly coming out of a slow patch, with record rates at all-time lows, the Aussie Dollar aims to breach the 70 cent mark against the US Dollar.
► US Stocks continue to trade at all-time highs and Trump is very happy, however on the Corporate side, there are key Tech earnings coming out soon which could change the momentum shift
Many “this week ahead” articles start off referencing the Coronavirus and how it is still front and center of many news and data headlines. However, we all know that, and therefore I felt that I should start this article with something more positive. A federal court of appeal has ruled against Trump and his proposed legislation to allow hunters to kill Yellowstone grizzly bears, stating that they were illegal. Yellowstone Grizzly bears are now officially protected by the Endangered Species Act once again. Here is your week ahead.
With price wars between Saudi and Russia, to negative oil prices all during the Coronavirus, Oil has had one of its most turbulent year to date. However, deep cuts from OPEC and a resurgence in oil demand has helped oil prices stabilize around the $40 mark – with Brent peaking just under $43.929, just short of the psychological $44 mark. However, this is shy of the $45.5 mark required to close the gap pre-coronavirus.
The Japanese candlestick tells uses a box and whiskers type format, changing between two colors dictating whether it closed higher or lower. Japanese candlesticks can be used for any time frame, and are used to describe the price action during that time frame.
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