Daily Market Review — 28/06/2016
US economic statistics will drive the markets today
The British currency is still under immense pressure thanks to the Brexit. Yesterday, the S&P lowered the UK’s credit rating, which caused the pair to plunge sharply (1.3119) to fresh 31-year lows. Despite the government’s promises to solve all problems, analysts predict the currency will only continue to weaken across the broad market spectrum. Despite this, the UK government is not going to generate any sort of stimulus package. Today’s trading dynamics will be impacted by a slew US economic statistics, kicking off at 12:30 GMT, with the Final GDP Q1 report.
Resistance: 1.3474, 1.3782, 1.4007
Support: 1.3119, 1.2950, 1.2824
The pair is showing lateral dynamics after Brexit. Although the UK news doesn’t have a direct impact on the ruble, it can put pressure on whole range of commodities associated with it. After the Brexit the USD/RUB rose sharply, but then lost ground. This sudden jump came about because there is a speculation that there demand for certain commodities will fall, which can negatively impact the ruble. However, the ruble regained some of its footing against its US counterpart because it is the start of the Russian tax season. Today’s trading dynamics will primarily depend on the state of the oil market.
Resistance: 64.6649, 65.0663, 65.4238
Support: 64.1193, 63.6866, 63.3479
Major European stock indexes dropped yet again as investors are trying to make sense of the Brexit. The UK finance minister stated yesterday that the country is equipped to deal with the current crisis, but no financial stimulus package should be expected before new elections, slated for this coming October. Bearing this in mind, it is more than likely that the European stock markets, including the FTSE 100 will continue to gradually drop in the short-term as most investors would prefer to avoid these riskier assets.
Resistance: 5997.30, 6044.40, 6090.30
Support: 5896.60, 5860.70, 5811.30
Brent Oil Futures
Brent oil prices trended negatively for the second consecutive session. The aftermath of the Brexit is causing the USD to rise as it is being utilized as a protective asset. As such, riskier assets such as Brent oil are increasingly under pressure. On Friday alone oil experienced its largest fall since February of this year. Today’s trading dynamics will depend on the US dollar exchange rate and the general mood of investors.
Resistance: 49.16, 49.78, 50.67
Support: 47.79, 46.88, 46.20