Global stocks rose sharply today and sterling strengthened broadly while safe-havens including the yen and gold retreated, after polls showed support for Britain staying in the European Union regaining momentum before Thursday's referendum.
On the U.S. Dollar Index daily chart we are observing a big sideways pattern since the start of 2015; it's slow, sideways and overlapping price action, which is a personality of a contra-trend movement that can be completed now.
Risk remained out of favour this morning as stocks tumbled and safe haven government bonds extended their rally, causing yields on the 10-year German bunds to drop below zero for the first time. In Britain, the equivalent yields have also fallen to a fresh record low level. Ahead of the above fundamental events, the euro/U.S. dollar (EUR/USD) currency pair has reached a key technical level today, namely around 1.1210/20.
The U.S. dollar/Japanese yen (USD/JPY) currency pair went out of the red wave 4 triangle and down into wave 5 to lower levels. Currently, we are trading around potential resistance for the black wave 4 in the red wave 5 and we think one more push d
Crude oil prices fell sharply at the end of last week and have extended their losses as the new week begins. At the time of this writing, Brent oil was back at $50 per barrel and WTI was hovering around $48.50, a good 6% off its high on Thursday.
Central banks will take the spotlight as the U.S. Federal Reserve, Bank of Japan, Bank of England and the Swiss National Bank will publish monetary policy decisions. The market anticipates no changes across the board, but is expecting some of the rhetoric to fill the void of monetary policy actions. The next few weeks will be full of economic events and with uncertain outcomes volatility is forecasted to rise.