As Wednesday trading gets underway, the pound continues to gain ground in relation to its peers. After Monday’s announcement of Pfizer’s vaccine success, sterling received a big boost because the UK had pre-ordered 40 million doses of the vaccine and is likely to start deploying it earlier than most other countries. The country being in pole position to receive the vaccine is likely to give the UK economy a much needed reprieve, leaving the end of the economically-damaging virus containment measures within sight.
The good times for oil are continuing with risk on is still dominating. There is widespread optimism on markets even if in early trading today we have seen some investors taking profit after the large gains of the last few days. Investors are now seeing Covid-19 matter as something that won’t affect global oil demand in the long term. This has been reflected in the price in the last few days, as WTI rebounded to $42, while Brent is trading above $44.
From a technical point of view, the scenario remains bullish, with WTI clearing resistance at $41.50 and now closing in on the August high at $43.50, which represents the next key resistance for oil.
Share markets continued to edge higher after Wednesday’s European opening bell as market sentiment continues to soar on vaccine hopes. Sector-based rotation is still going on with investors fleeing tech shares to increase their exposure to assets more linked to economic growth such as the industrial sector for example. Even if market optimism remains globally high, some investors already think this week’s price moves on both safe havens and riskier assets were too sharp. In fact, lingering uncertainties about the next stimulus packages and the delay of implementation of a public vaccine campaign has seen some investors bet on an upcoming correction. This would make sense for a technical perspective following the 9-day winning streak for the Stoxx-50 Index.
Pierre Veyret– Technical analyst, ActivTrades
Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.