Summary:
- Sell-off which began in the JAP225 spreads throughout Europe and US
- US100 hands back the last 3 days gains
- Gold could benefit from risk-off mood
- Oil edging higher but remains below possible double top
- Bitcoin coming under pressure after yesterday’s sharp reversal
A sell-off that began towards the end of the Asian session has spread throughout the globe with European indices declining this morning and US markets also lower. The JAP225 had early on made its highest level since 1992 but a spate of selling which saw the market trade in the red as the cash session ended also weighed on the DE30 which fell to its lowest level of the month.
The US500 was retesting it all-time high around 3-4AM at 2596 with the market looking strong and trading within a whisker of the big 2600 level. However, the drop seen in the JAP225 was felt in the US500 and price is now trading lower by approximately 20 points.
Declines across the European stock markets have deepened which could herald a larger pullback around the corner. In this environment risk-off currencies along with gold prices are in demand. A technical overview of Gold can be found here.
The Oil price has made some gains today but Brent remains below the 64.64 level which saw a possible double top form yesterday. Longer term the market remains in an uptrend but given that price has rallied so strongly with a gain in excess of 40% since the late June low there is a chance we get a pullback.
Yesterday was a highly volatile session for Bitcoin even by its own standards. The cryptocurrency first surged higher by more than 10% to post a new record peak before a sharp reversal in the evening saw the day’s gains wiped out. The precipitous drop came after news broke that the widely anticipated software upgrade (known as SEGWIT2X) scheduled for next week had been suspended. Can the market shrug off this setback and continue the stunning recent rally or does a large correction lie ahead? Watch our short video here.
Donald Trump could be in Asia but the Tax Reform is the story number one in the US politics. An analysis on the key tax proposal, possible hurdles in a legislative process and affected markets: US500 and USDJPY can be found here.