US open – Trade, Alibaba, bitcoin, gold, oil

Quiet Thanksgiving week For Wall Street

It’s been a flat day in Europe so far and a look at US futures suggest the day on Wall Street is going to be no more thrilling.

Source – Thomson Reuters Eikon

Then again, what more should we expect from Thanksgiving week when it seems the trade war is all anyone is now concerned about. Of course, there are other domestic issues with Hong Kong enjoying some peace for now and the UK heading for the polls, but broadly speaking it’s all about trade deal, phase one.

We are getting a constant drip feed of updates on how negotiations are going from both sides and it does all sound positive. My only problem is that we’ve had this all before and when it’s been more than a month since the deal was announced and more than a week since it was meant to be signed, I’m a little skeptical.

Alibaba makes decent gains on day one

More interesting today has been the first day of trading for Alibaba in Hong Kong. The territory has been in the headlines for all the wrong reasons over the last six months, to the point that at one stage, questions were being asked about whether it was the right time for Alibaba to list there.

The listing was a big success though, with shares rising more than 6% on the opening day of trading, giving the city something positive to talk about. Hong Kong authorities will have been keen to project a business as normal image to the rest of the world with this listing and I’m sure they’ll be pleased with how everything has gone. Particularly coming on the back of a weekend result for pro-democracy candidates in council elections.

Bitcoin struggles around $7,000

Bitcoin has sprung back to life in recent weeks and found itself trading back at six month lows on Monday, as it becomes increasingly clear that China is not becoming more accepting of cryptocurrencies as previous reports have indicated. The country does appear to be a fan of the technology behind bitcoin and others but not in the form that crypto-enthusiasts probably hope.

Bitcoin has bounced off Friday’s lows to trade back around $7,000 but the trend is not favourable for bitcoin which is still having a very good 2019, despite trading well off is early summer highs. Still, returns of almost 100% for the year so far are hardly anything to whine about.

Bitcoin Daily Chart

Source – Thomson Reuters Eikon

Gold vulnerable despite marginal gains

Gold is making small gains on Tuesday but continues to looks vulnerable as it tests the lows from a couple of weeks ago. We’ve seen some nice technical moves over the last few weeks, with $1,480 initially breaking – having provided strong support for the prior month – before the yellow metal found support around early summer resistance. Since then, it’s rebounded back towards $1,480 which has held firm as new resistance, confirming the initial breakout. It is now heading south again and a test of $1,440 now looks on the cards. A move below here could see attention shift back towards $1,400.

Gold Daily Chart

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Oil limps higher

Oil is limping higher today but is struggling to generate much upward momentum, a possible sign of over-extension following a strong rally since the start of October. Markets have been buoyed the last couple of days by promising trade comments but oil seems to have missed the boat, potentially another sign of bullish reluctance.

Brent Daily Chart

Economic Calendar

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam