European update – Trump, UK, gold, oil, bitcoin

Stocks Back in the Green

Stock markets are back in the green on Wednesday, following a woeful start to the week which came as Donald Trump cast doubts on a pre-election trade deal with China.

Source – Thomson Reuters Eikon

It still baffles me that investors hang on every Trump statement and tweet. His trade deal optimism changes on a near-daily basis and yet, investors are very sensitive to it. It’s probably a reflection of the relative lack of other talking points.

Trump claimed he doesn’t want to interfere in the UK election during his NATO visit to London, despite being tempted by questions on the NHS as part of a future trade deal. Trump was clearly well briefed and resisted the urge for now and the Conservatives will be hoping he continues to do so for the rest of his visit.

Gold taking another run at major resistance

Gold had another run at $1,480 this morning and once again, it’s holding firm. This is a big level of resistance for the yellow metal, one that if broken could trigger another run up towards $1,520, which providing a ceiling for prices throughout October.

I’m not convinced there’s much of a bullish case for gold though, despite the recent shift in risk appetite. It seems to be built primarily on trade statements which change constantly and traders still, for some reason, cling to. I’m not convinced the latest worry will last.

Gold Daily Chart

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Oil buoyed by inventory data

Oil prices are faring a little better today, lifted by the slightly improved sentiment in the markets. Tuesday’s inventory number from API won’t have done crude any harm either, with a 3.72 million barrel drawdown offsetting last week’s similarly sized increase. Expectations for the EIA release today are for a smaller drawdown which could provide another boost for oil prices.

Brent Daily Chart

Correction on the cards for bitcoin?

Bitcoin is continuing to drag its feet despite having a couple of runs at $7,000. While the level has broken on a few occasions, it’s not sticking. Perhaps there isn’t as much bearish momentum in the crypto as there has been over the last month, a sign that a correction is on the cards. If it fails to make a new low then $8,000 will start to look a lot more interesting.

Bitcoin Daily Chart

Source – Thomson Reuters Eikon

Economic Calendar

For a look at all of today’s economic events, check out our economic calendar.

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
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 Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. 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.