Market Update

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As the potential for a trade war between the world’s two largest economies – China and the U.S. – have started to abate, a new conflict has started worrying markets. The West has been considering the potential of sanctioning Russian owned companies and assets as a reaction to both the Skripal poisoning and escalating tensions in Syria. The second event was kicked off by the alleged use of chemical weapons against civilians in Douma – one of the last rebel held territories closest to Syria’s capital of Damascus. The chemical attack was reported to be enacted by the Russian-backed Assad forces.
This caused a spike in the prices of both Oil and certain industrial Metals – the leader amongst them: Aluminum and Nickel as rumors circulate about sanctions being taken against UC Rusal – a Russian owned company with operations in the U.S.
Oil’s rally was likely fueled (I apologize for the unavoidable pun) by conflict in the Middle-East along with Tuesday’s API report showing a significant drop in oil reserves in the region of 1.1 million barrels. Oil’s price reached a 3 ½ year high. WTI was at $69.09 and Brent at $74.33 at the time of writing this article.

The volatility index (VIX) is showing a downwards trend, and the drop in a price of gold and silver seems to reflect this; gold was banded between 1350.68 and 1344.88 and silver between 17.2051 and 17.1318 (at the time of writing) – even as aluminum and nickel surge.

These conditions are the bread and butter of trend traders, as both highs are formng (with Oil and Metals) and lows (with Precious Metals).
The post Market Update appeared first on Forex.Info.



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