Volatility in the Markets has hit its highest level this year, despite Easter Holidays approaching. Geopolitical tensions increased between the US and North Korea after the ‘toughest’ counteraction against the US in response to the dispatching of a big airplane carrier near North Korea. Also, concerns over Russian/ US relations over Syria and fading hopes for US tax reform and infrastructure spending, kept the market on its toes and traders are seen to be shifting finds to “safe” assets.
- Major events of the day: UK job data will be the main focus in the European session. The Bank of Canada (BoC) will also announce its rate decision later in the day and is widely expected to keep its interest rate unchanged at 0.50%.
- Gold has jumped to $1281 highs so far, its highest level since 10th of November 2016. Important resistance is at $1284 and a breakout of this could open the way to $1320. The yellow metal gained sharply after U.S launched an air strike on targets in Syria as a direct response to a recent alleged chemical attack by the Syrian government.
- West Texas Intermediary (WTI) crude oil, also extended its recent rally to as high as 53.6, still on course to 55.24 being the key resistance level. Oil rose amid geopolitical tension, as did gold.
- The biggest gainer was the JPY which hit a 5-month high of 109.33 against the USD. Elsewhere, EURUSD and GBPUSD remained more-or-less stable.
- What should be stressed again is that both the VIX – measure of volatility in US equity markets and ‘safe haven’ spot gold prices – rose to its highest level since the US elections, while another ‘safe haven’, the Japanese yen, strengthened against the rest of the G10 overnight. This is a clear indication of market nervousness which could be the catalyst for very sharp moves.
Risk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose. Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd- CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd -AFS license No. 246566).