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Mixed sentiment in the stock markets and fall of the GBP, the highlight of the week

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The week ended last Friday (02/26/2016) started with a very negative investment atmosphere and this was reflected immediately in the prices of the major stock indexes, which suffered widespread and strong falls in the early stages of the week especially in the day on Tuesday.

As the week progressed the atmosphere was becoming opposite and at the end financial markets have managed to close with mixed results. In the foreign exchange the pound sterling crosses have shown nervousness offering the best trading opportunities especially in the first part of the week. The uncertainty about a possible departure of UK from the EEC has taken its toll on the currency. The forecast data of US GDP for the fourth quarter of 2015 reflect a substantial improvement of 2 tenths which immediately revalued the dollar.

Fall of GBP/USD in tge month of February, 2016

-EUR/USD: Having spent the week fighting with the medium-long term resistance at the 1.1026 level, the currency pair has weakened at the end of week thanks to the US GDP data published in Friday’s session. So it closes with very heavy losses of -1.81% in the area of 1.09.

-GBP/USD: At the end of the week the pair reached an area of minimum prices that had not been seen since March 2009, experiencing very heavy losses of -2.98% up to 1.3860 level. The uncertainty about a possible departure of UK from the EEC have hurt the GBP value, which in the case of GBP/USD is placed below the psychological barrier of special grade of 1.4000.

-AUD/USD: The currency pair continues its particular fight with two levels of very long term, which are exerting great force of resistance. It closed with a small loss of -0.39% over 0.7124. The interest rate decision that will be made public on Tuesday in Asian trading hours will be the focus of interest for this pair during the next week.

-USD/CHF: The currency pair closed with hefty profits of 0.88% coming back to the radius of influence of its annual opening price (1.0006), a price level which will be vital to follow the evolution of its price at the start of the next week. From a macroeconomic point of view all eyes on the crosses with the dollar will be on the employment data of February that will be released on March 4.

The main currency crosses with the Yen close the weekly period with mixed signals: 

  • USD/JPY had gains of 1.12%  trying to consolidate above the level of 114. 
  • The EUR/JPY had a minimal fall of -0.59% and stops in a medium-term support at the 124.33 level. 
  • Finally, the GBP/JPY loses ground with great force, falling -1.86% and closing on 158.00.

After early days of pessimism, the main stock indexes end the week with disparate yields with the German Dax generating a negligible gains of 0.56% to close on 9,500. Oil continues gaining ground, Brent advances $2 per barrel to 35 and the WTI rises $1 to 31.50. Gold has been very hesitant.


 

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