(XTB Analysis Team)
European indices started the day with upbeat moods and are trading higher following the positive performance by US and Asian markets which saw Nasdaq reach the highest level in ten days after breaking through a previous resistance area. Despite this, the situation remains quite volatile and we could see a major shift in moods as investors follow macroeconomic data and major Wall Street earnings reports with Netflix expected to publish their report today. Furthermore, investors continue to monitor the political and economic turbulence surrounding the UK which saw the new chancellor announce a U-turn on the majority of measures previously announced by this newly formed government in an attempt to stabilize currency and stock markets. Despite a lack of major economic data today, investors will certainly have a lot to keep an eye on as the geopolitical and economic situations continue to develop and as uncertainty continues to dominate the market.
Commodities remain stuck in consolidation range as dollar attempts to rebound
While the recent weakness seen from the US dollar has led to a recovery in commodity prices and cryptocurrencies, it appears that today might see some unexpected movements across markets while the greenback is attempting to rebound from the lowest levels in around ten days as general market moods showed signs of improvement. Oil prices remain stuck in their recent trading range and while they appear to be slightly pulling back at the beginning of the European session, there is still room for a potential recovery as they test an important support which has managed to hold the price for the last several days and as concerns about supply remain. Meanwhile, gold prices are also struggling to initiate a significant upward move as they continue to hover in the $1650 area after retreating slightly and as they await a catalyst for significant momentum shift. The situation appears to be similar when it comes to cryptocurrencies with Bitcoin still hovering under the key $20,000 level as it trades about 2,70% below that while Ethereum trades around the $1320 mark after testing the highest level since the end of last week. It seems clear that commodity prices continue to be highly related to the US dollar’s performance and any major shakeup in sentiment towards the greenback may lead to a cascading effect across asset classes.