The overall market sentiment is mixed as new virus cases continue rising throughout the world, but most economic indicators came out better than analysts expected. Let’s look at the main market movements.
Victorious Boris Johnson
Information is not investment advice
Finally, the victory of the Сonservative party under the leadership of Boris Johnson is confirmed. They have a 43.6% majority, while the Labour party follows with 32.4% and the Liberal Democrats got 11.4%.
Boris Johnson had previously commented he had a strong agenda for the United Kingdom should he win the election. One of the pillars of his plan was to “get Brexit done” at the soonest and in the best interest of the UK.
For the UK, it means higher stability and a better economic outlook with all the consequences.
For the world, it means stronger GBP against the related currencies.
All of that, of course, takes place if Mr. Johnson does not fail on his intentions.
GBP celebrating the victory
In the meantime, the British pound reacted immediately to the victory of Boris Johnson.
On the weekly chart, it is visible that the price of GBP/USD rose to the area of 1.35 – a height it has never been to since May 2018. And it is testing the August-2018-December-2019 resistance currently. Crossing this barrier would confirm the market’s intention to go even higher.
In the short term, however, we are expecting a certain correction downwards, as confirmed by the Awesome Oscillator. In any case, whether it is going further upwards now or later, the price would need to make a stop at the resistance it is testing now. On the hourly chart, the level of 1.3500 is going to be capping the bullish direction for a while, while 1.3450 will be the support. Crossing the support would mean a deeper correction downwards. Otherwise, we will observe a more sideways movement of the price.
Watch the news and stay informed!
The market sentiment switched to risk-off after the Fed’s Powell statement. The USD edged higher, while risker assets started falling after reaching quite high levels. Let’s have a closer look.
The overall market sentiment is mixed as investors await the Federal Reserve’s statement today at the evening.
The market sentiment is indeed risk-on today. Stocks, riskier currencies and gold are rising amid the waning US dollar.
The US NFP will be published on August 7 at 15:30 MT time.
The RBA will make a rate statement on August 4 at 7:30 MT time.