Australian stocks decline after latest Brexit news and Hong Kong reports 23/10/19

Australian stocks decline after latest Brexit news and Hong Kong reports 23/10/19

Asian stocks were mixed as the market reacted to the ongoing US earnings season. The earnings released to date have been relatively strong. Yesterday, excellent results by companies like Chipotle Mexican Grill and Proctor & Gamble showed that consumer spending is still at good levels. The market also reacted to yesterday’s happenings in the British Parliament. Also, the market reacted to the news that Beijing was considering ways to remove Hong Kong’s Carrie Lam. Over the past five months, Hong Kong has seen its economy affected by the continued protests. In China, the A50 and Shanghai composite index declined by 52 and 7 points respectively. In Australia, the ASX declined by 23 points.

AUS200. The AUS200 index declined slightly as the market reacted to happenings in Asia and Europe. As of this writing, the index is trading at A$6650.00, which is slightly higher than the intraday low of A$6634. On the 30-minute chart, this price is along the 23.6% Fibonacci Retracement level. The pair is slightly above the lower line of the Bollinger Bands while the RSI has remained along the oversold level. The index may continue moving lower in the near term.

Sterling. Sterling declined after a mixed day for Boris Johnson. The Parliament session started well for Johnson after his Brexit agreement passed the first vote. This was the first time that Parliament has voted in support of such a bill. However, his joy was short-lived after his timetable was voted against. This means that the country will not leave the EU on October 31. Worse still, Johnson’s bill will likely have so many amendments that the EU will reject. The continued uncertainty will not be good for the UK or the European Union. This is because companies are holding back investments because they don’t know what the future will look like.

EUR/GBP. The EUR/GBP rose slightly after the latest developments in Parliament. On the four-hour chart, the pair moved from a low of 0.8573 to 0.8650. Previously, the pair had formed a triple bottom pattern. On the four-hour chart, the short and medium-term moving averages appear to be making a bullish crossover while the RSI has been moving higher. The pair may continue moving higher to test the 23.6% Fibonacci Retracement level of 0.8750.

Crude Oil. In the past few weeks, the price of crude oil has been moving in a sideways direction. Yesterday, the price declined after the American Petroleum Institute (API) released its inventory data for the past week. Numbers showed that inventories declined by more than 4.45 million barrels. This was lower than the 10.5 million barrels that were released a week ago. Later today, the EIA will release its own inventory data. The market expects the inventories to come in at 2.35 million barrels. This data comes a few days after the IMF lowered the global growth forecast and OPEC lowered the demand for crude oil in 2019 and 2020.

XBR/USD. This month, the XBR/USD pair has been moving in a horizontal direction. The pair’s price has ranged between 57.97 and 60.45. As of this writing, the pair is trading at 59.20, which is lower than yesterday’s high of 59.97. On the hourly chart, the pair is along the 14-day EMA and slightly above the 28-day EMA. The pair is also slightly below the lower line of the envelopes. Today, the pair may move sharply in either direction after the EIA releases its inventories data.


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