Daily Analysis: Election Shocker Weighs on the Pound but Stocks Remain Strong | Hacked: Hacking Finance
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Daily Analysis: Election Shocker Weighs on the Pound but Stocks Remain Strong

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Daily Analysis: Election Shocker Weighs on the Pound but Stocks Remain Strong

Introduction

This article was posted on Friday, 13:43, UTC.

Friday Market Recap

Asset Current Value Daily Change
S&P 500 2435 0.11%
DAX 12761 0.37%
WTI Crude Oil 45.52 -0.22%
GOLD 1284.00 0.45%
Bitcoin 2820 1.44%
EUR/USD 1.1176 -0.30%

Global financial markets are fairly quiet today despite yesterday’s busy schedule, even as the British snap election turned out to be sort of a Brexit 2.0. The Conservative Party that has been leading polls by a mile just two months ago, now has to look for a coalition partner (Theresa May already announced coalition talks with the DUP party) or risk minority governance, as it fell short of the 326 seat needed for the majority. The Pound suffered steep losses in very active trading after the event, and it settled down with losses between 1.5% and 2% compared to its major peers, a huge drop in forex terms.

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The major global stock benchmarks experienced a slight dip overnight, also influenced by the next chapter of the Trump-scandal. That said, the main British index, the FTSE 100, is actually up today, while global equities are still hovering near their bull-market or all-time highs. Yesterday’s dovish ECB statement reassured investors that central banks are still willing to ease-and-print their way out of any trouble, lifting risk assets and pushing equity-volatility lower once again.

GBP/USD, 4-Hour Chart Analysis

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Other asset classes are less affected by the election results, although the uncertainty gave a small boost to gold and cryptocurrencies, while the Dollar is the winner of the day among the major currencies despite the troubles of President Trump. Oil continues to be volatile despite the calm trading environment, as the woes regarding Qatar are still present, although industrial commodities continued their relief rally, as the Chinese market remained stable.

WTI Crude Oil 4-Hour Chart Analysis

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Technical Picture

The S&P 500 acted very strong despite the negative news flow this week, consolidating just below its all-time high at 2440. The lack of breadth behind the current rally is still a concern but the price action suggests more short-term upside with a break-out to new highs in the coming days, before the Federal Reserve’s meeting. The MACD indicator is turning bullish, and a swing seems to have formed a tad above 2420. Below that crucial support is found at 2400 and 2355.

S&P 500, 4-Hour Chart Analysis

Key Economic Releases on Friday

Time, CET Country Release Actual Expected Previous
3:30 CHINA CPI Index 1.50% 1.50% 1.20%
3:30 CHINA PPI Index 5.50% 5.70% 6.40%
10:30 UK Manufacturing Production 0.20% 0.80% -0.60%
10:30 UK Goods Trade Balance -10.4 bill -12.0 bill -13.4 bill
14:30 CANADA Unemployment Rate 6.6% 6.6% 6.5%
14:30 CANADA Employment Change 54,800 11,500 3,200

 

Key Economic Releases on Monday

Time, CET Country Release Expected Previous
1:50 JAPAN PPI Index 2.10%
20:00 US Federal Budget Balance 182.4 bill

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Mate Cser

Mate Cser

Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.

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