Lukman Otunuga,
FXTM Research Analyst
It has been a turbulent trading week
for financial markets as investors tussled with ongoing trade developments,
Brexit uncertainty and geopolitical tensions across the globe. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Risk sentiment crumbled today on
reports circulating around China's lack of interest to resume trade discussions
with the United States. Global equity markets were flashing red amid the
uncertainty and this negative mood could roll over into the new trading week.
Markets remain uncertain at this point
in time as to whether the seemingly confrontational rhetoric following the
escalation in the US-China trade dispute over the past two weeks actually
spells the death of any trade deal. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html Perhaps the weekend couldn’t have come
at a better time, allowing time for investors to digest the latest commentary
and ascertain whether both sides are playing hardball as an intended signal, a
show of brinkmanship, or just plain noise before the scheduled G20 meeting in
Japan next month.
Pound hammered as Brexit talks collapse
It was already a terrible trading week
for the British Pound thanks to the political risk circus in Westminster and
Brexit-related uncertainty. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Recent reports of cross-party talks
between the Conservative and Labour party concluding without a deal have
compounded to the Pound’s woes today. With the failure of cross-party talks and
Theresa May agreeing to set a date for her departure fueling concerns over the
UK potentially crashing out the EU without a deal in October, Pound weakness is
likely to remain a dominant theme.
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In regards to the technical picture,
the GBPUSD is bearish on the daily and weekly charts. The currency pair
extended losses on the negative news this morning, with prices trading around
1.2750 as of writing. A weekly close below 1.2820 has the potential to open a
path towards 1.2700 and 1.2620, respectively.
All eyes on Nigeria GDP in the week ahead
Next week kicks off with a bang for the
Nigerian economy as GDP figures for Q1 are scheduled to be released on Monday. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html Investors will closely scrutinize the
data for insights into the health of the nation during the first quarter of
2019. A figure that exceeds market expectations is likely to boost sentiment
over the Nigerian economy.
Commodity spotlight – Gold
This has not been the best of trading
weeks for Gold with prices trading around $1283 as of writing. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Conflicting signals over the direction
of US – China trade talks caused risk sentiment to swerve back and forth which
ultimately impacted appetite for Gold. Although the yellow metal is trading
back towards $1285 level at the time of writing, bulls remain in control above
$1280. With uncertainty over trade talks likely to stimulate the flight to
safety, safe-haven assets like Gold are poised to remain buoyed. Technical
traders will continue to closely observe how prices behave around the $1285
region. Bulls need to break back above $1300 for prices to push higher in the
medium term.
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