GBP rallies, oil gains and US equities correct lower

GBP rallies across the board

The USD continued to lose ground in the FX market yesterday, yet across the Atlantic, the shock from the violent protests and the uncertainty for Eurozone’s and France’s political outlook still weighs fundamentally on EUR. Tomorrow, we highlight the release of the Euro Zone’s preliminary PMI figures for October and possibly lower than expected readings could weigh on the common currency. Across the Channel, the GBP seems to be the main winner in the FX market, despite any fiscal worries. With accelerating UK CPI rates and a tighter employment market, pound traders await the release of UK’s retail sales for September and preliminary PMI figures for October tomorrow, while BoE Governor Bailey speaks today and better than expected rates and figures along a possibly hawkish tone by Bailey could support the GBP further.

US stockmarkets correct lower

US stock markets were on the rise yesterday with SpaceX and Super Micro earnings reports boosting the market’s sentiment. Yet futures corrected lower during today’s Asian session as market worries for Tesla and its potential merger with SpaceX tended to worry investors. In today’s earnings calendar we note the releases of the less glamorous P&G, Lockhead Martin and Spotify. Fundamentally, market worries for inflation in the US and for AI trades are still present and seem to weigh on US equities, allowing for a more cautious market approach to emerge.

Oil gains some ground

Oil prices continued to correct lower yesterday yet jumped in today’s Asian session. The renewal of Houthi attacks on Saudi Arabia tended to intensify market worries for the supply side of the international oil market thus providing support on a fundamental level for oil prices. Possible further escalation of tensions in the area could provide additional support for oil, while an easing of the market’s worries could weigh.  

Gold slides lower for fourth day in a row

Gold’s price slid lower for a fourth day in a row. Market worries for inflationary pressures in the US remain high given also the high oil prices, thus weighing on gold’s price. Gold traders also keep an eye out for the Fed’s meeting next Wednesday at which the bank is expected to remain hawkishly on hold, and we note the event as the next big test for gold’s price.

Other highlights for today

In today’s American session, we note the release of Canada’s PPI rates for September. In tomorrow’s Asian session, we get the preliminary PMI figures of Australia, Japan and Japan’s CPI rates for September.

Charts to keep an eye out

GBP/USD Daily Chart

GBP/USD moved higher placing more distance between the 1.3300 (S1) support line and its price action. We maintain a bullish outlook for cable given also that the RSI indicator has risen above 50, implying a bullish market sentiment for the pair. Should the bulls continue to lead GBP/USD, the pair could break the 1.3510 (R1) resistance line and start aiming for the 1.3655 (R2) level. Should the bears take over, GBP/USD could reverse direction by breaking the 1.3300 (S1) support level, and start aiming for the 1.3155 (S2) support base.

WTI Cash Daily Chart

WTI’s price edged higher in today’s Asian session yet remained well below the 101.00 (R1) resistance line. The intact upward trendline and the RSI indicator being above 50, dictate a bullish outlook, yet we worry for WTI’s inability to form new higher peaks and warn of a possible stabilisation. Should the bulls take over, we may see WTI’s price breaking the 101.00 (R1) resistance line, and aim for the 108.85 (R2) resistance level. Should the bears take over, we may see WTI’s price breaking the prementioned upward trendline, continue to break also the 94.30 (S1) support line and start aiming for the 87.55 (S2) support base.

Disclaimer: This information is not considered investment advice or an investment recommendation, but instead a marketing communication.