ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for October 17, 2019. See details below:
FOREX/BREXIT
A roller-coaster day for the pound with it almost reaching $1.30 following the announcement of a Brexit deal between the EU and the UK only to then lose all of the day’s gains in the aftermath of the refusal by the Northern Irish Democratic Unionist Party to back such an agreement. It is widely assumed that without the support of the of DUP the deal is condemned to be voted down by parliament, as the hard Brexit wings of the Conservative Party made their support conditional to the deal being accepted by the DUP. In practical terms this means that a new extension to the exit date is now more likely. As a consequence the pound erased earlier gains and is now unlikely to test the $1.30 resistance level again, at least not until there is another clear solution within sight.
Ricardo Evangelista – Senior Analyst, ActivTrades
OIL
Oil started the trading session with very little volatility, as investors are awaiting US data on crude oil inventories. From a technical point of view, the main trend remains weak, as the price was not able to rebound above resistances placed at $53.70 and $55. The optimism seen on Brexit was not enough to sustain the price, while fears of an economic slowdown and potential trade war damage remain key concerns. For WTI there is a first support level at $52.50, while the area $51.50 represent a key support level. The first positive signal will arrive only with a solid recovery to $55.
Carlo Alberto De Casa – Chief analyst, ActivTrades
EUROPEAN SHARES
European stocks had a mixed opening on Thursday following a directionless trading session in Asia as Wednesday’s disappointing US retail sales continue to weigh on market sentiment. The first consumer spending decline in seven months is seen as a potential threat to the longest US expansion on record by investors and put further pressure on the US dollar. However, this could benefit stock markets as more disappointing data are likely to pave the way to a third straight rate cut from the Fed. Furthermore, the recent optimistic mood surrounding trade talks between Washington and Beijing is also being tempered as the truce remains fragile.
Most traders may want to stay cautious regarding their exposure to stocks as markets are likely to stay volatile and trendless as long as no formal deal will be signed between the US and China. In Europe, the trading wind changed once again this morning after the DUP in Northern Ireland confirmed it will not back the latest proposal on Brexit as there remains a lack of clarity on VAT and issues on customs.
This put pressure on the pound but had the opposite effect on the FTSE-100 index which has almost erased yesterday’s losses. The market is trading below the 7,200pts level at 7,175pts with the 7,185pts zone well defended by bear traders. A clearing of the 7,185pts intraday resistance level could extend the current rally to 7,210pts and 7,235pts by extension.
Pierre Veyret– Technical analyst, ActivTrades