Global equities and commodity prices gained on Wednesday as the market expected that policy makers will take actions to stabilize financial markets and national economies after Britain’s vote to leave the European Union.
West Texas Intermediate increased more than 50 cents to $48.57 per barrel from the last settlement, while Brent crude inched up 0.4% to $49.59 per barrel. The number of crude oil barrels held in the US inventory by commercial firms is expected to have decreased by 2.3 million barrels last week, following a 0.9 million barrel contraction in the week before.
Asian stocks witnessed an advance today as the gains in crude oil supported commodity producers. The MSCI Asia Pacific Index added 0.8% as the Topic index rallied 0.9% in Tokyo after Japanese Prime Minister Shinzo Abe said that he would mobilize all possible measures to curb the negative effects of the Brexit vote.
Japanese yen rose 0.4% to 102.480 per dollar after losing 0.7% on Tuesday. The US dollar index, measuring the strength of the greenback versus its major rivals, was seen up 0.13% , after falling 0.5% in the last session, amid worries that Brexit could cause a collapse in the world’s economic recovery.
The sterling reversed into losses, hitting around $1.3299 after the 0.9% rise in the previous trading session. Meanwhile, the Euro stayed steady at $1.1064 as French President Hollande stated yesterday that the currency was not put into difficulty by Britain’s plans to leave the EU.
On the back of the Brexit referendum, traders are assigning a 10.5% probability of a rate cut in September or November by the Federal Reserve, according to the latest readings on the CME’s Fed Watch tracker. The percentage of traders estimating an increase before the end of the year was only 17.1%, while 0% expect a November’s hike.
Gold remained flat as the markets seemed to be stabilizing after the initial rout on Friday and Monday. The commodity was last trading near the $1320 mark after hitting highs at $1358.
The Japanese Yen has gained against its American counterpart to around 102.480 per dollar today. The price has crossed below the 10-day moving average, signaling downward pressure on the currency pair USDJPY. A bearish market is also indicated by the RSI (14) currently below 50 and heading down. The trend indicator has been suggesting short positions since the appearance of the red arrow. The pair is likely to retest the 5-day low at 101.152 soon.
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EURGBP has been moving cautiously recently after the significant spike from 0.75993 last week, supported by the short-term and long-term EMAs. RSI is hovering at level 67, indicating that the pair is about to enter the overbought territory. More gains are anticipated for the pair as seen in the green parabolics sar movement below the price chart.
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AUDNZD has been moving sideways around the area of Fibonacci retracement 23.6% after falling deeply from the one-month high of 1.07375. Neither bull nor bear is dominating the market as RSI is currently around the average while the trend indicator manifests new and varying signals constantly. However, the support of 1.04468 has been hit. Hence, the pair is expected to gain slightly for the rest of the day, to hit the resistance at around 1.04850.
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Silver is on track to gain to as high as $18.298. The commodity is about to enter the overbought zone as RSI is lingering near the 70 threshold. The ADX is at level 23 currently, and DI+ (green line) has crossed DI- (red line) and is heading up, suggesting a continuous up-move for the price. The advance is expected to keep going, with the price testing the two-year peak of 18.298 soon. The trend indicator is urging long orders.
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Brent crude price has recovered from the one-month bottom of $47.21 to as high as $49.48 per barrel. ADX is standing at 27; the DI+ (green line) is moving far above the DI- (red line) and heading up, signaling strong bullishness in the market. RSI has just confirmed the uptrend by moving past 50. It is anticipated that the price will go on with the current up-move, and head for the highest level since June 10 at $51.74.
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NASDAQ extended its recovery to reach 4291.00 after testing the four-month low of 4166.83 on Monday. The bullish trend seems strong as seen in the ADX staying at level 30, along with DI+ (green line) lingering above DI- (red line). With the support of the short-term moving average below, the index is expected to continue its gains to test the resistance level at 4350.08, formed at the beginning of May.
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