FBI Clears Clinton to Help Break US Losing Streak

It’s been a bright start to trading on Monday with investors buoyed by Hillary Clinton once again being cleared by the FBI in the email scandal, an announcement that could play a significant role in the election result.

Clinton’s substantial lead was shattered 10 days ago when the FBI reopened its investigation into her emails, paving the way for Donald Trump to re-enter a race that had appeared to have moved beyond him. Sunday’s announcement may have once again reopened that lead although I imagine some lingering damage will remain which is why investors continue to ease on the side of caution, as seen by the fact that previous losses haven’t been immediately reversed.

USD/JPY – Yen Loses Ground as FBI Clears Clinton

With Clinton stealing back the momentum 48 hours before the election, we may see risk appetite remain positive heading into the vote. The Trump hedge has been partially unwound this morning, with Gold slipping more than 1% from around $1,300, where it last week ran into resistance. We could see this head back towards $1,250 in the coming days, possibly even further in the event of a Clinton victory given what that would mean for both risk appetite and US interest rates.

Gold Daily

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The improved risk appetite is also providing a boost for oil prices at the start of the week, which looks set to end a six session losing streak. While we could see some reprieve in the short term, a little more downside could be on the cards going forward, with WTI possibly falling back to $42 if $44 support is broken and Brent potentially heading back towards $43. That said, it is worth considering that oil is now around 15% off its October highs so may be looking a little overextended to the downside.

Brent Daily

WTI Daily

Strap In, Capital Markets Are In For A Wild Ride

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This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.