US Equity Markets Plummet, GBP Gains Amid Brexit Optimism

Wall Street Tumbles and Triggers a Sense of Déjà vu

The dollar traded mixed against the other G10 currencies yesterday. The commodity-linked currencies CAD, AUD and NZD stayed on the back foot, while the safe-haven JPY was the main winner, as US equity plummeted in what it seems as a Déjà vu of what happened in February.

Nasdaq 100 Cash — Technical Outlook

Yesterday, Nasdaq 100, together with the other indices, plummeted, repeating the scenario seen in February. During yesterday’s sell-off, the US technology index was the biggest loser, compared to the S&P 500 or the DJIA. The index lost more than 4% on the day and it looks like that the bear-party could not be over yet. From the technical side, Nasdaq 100 slid from near the lower side of the range between the 7385 and 7690 levels, and dropped without giving the bulls even a chance to breathe. Overall, the index is still above this year’s uptrend line taken from the low of the 9thof February, but it looks that it could soon be heading towards that line for a test. For now, we remain bearish in the short run, but we would expect a bit of correction back to the upside, where the bears could take advantage of the higher price and jump into the action again.

Barnier lifts the Pound, Euro-traders Focus on ECB Minutes

The pound continued to gain against most of its G10 peers yesterday. It lost some ground only against JPY and NOK, while it traded virtually unchanged versus EUR and CHF. The main losers against the British currency were CAD and AUD.

EUR/GBP — Technical Outlook

The British pound has been outperforming the common currency since the last days of summer and for now, it seems that this could continue being the case in the near future. The pair is trading below its downside resistance line, taken from the peak of the peak of the 28thof August. That said, from a very short-term perspective, we could see some correction back to the upside, as EUR/GBP is quite oversold on the 4-hour chart, but overall, we remain bearish over the longer-term outlook.

As for the Rest of Today’s Events

Besides the US CPIs and the ECB minutes, we also have Sweden’s inflation data for September on today’s agenda. The forecasts suggest the CPI rate rebounded to +2.2% yoy from +2.0% in August, while the CPIF print is expected to have risen to +2.4% yoy from +2.2%. That said, once again, we will pay more attention to the core CPIF inflation metric, which excludes energy.

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