HomeContributorsFundamental Analysis'It's You Guv' Latest Poll Tells Boris

‘It’s You Guv’ Latest Poll Tells Boris

The latest YouGov MRP poll released this morning in Asia, suggests that the Conservatives are on track for a 68 seat majority in Parliament after December’s election. The YouGov poll carries more weight than most as it’s MRP model correctly predicted a hung parliament at the last election. GBP has climbed more than 80 points since it’s release, to 1.2945 but overall, is still ranging between the clearly denoted 1.2800 and 1.3000 levels. The topside resistance looks increasingly likely to be threatened if that lead proves correct, but we will probably need to be closer to the election date for GBP to have the momentum to do so.

Hong Kong Law Cancels US GDP Equity Rally

The US produced another set of decent data overnight with GDP and durable Goods both outperforming. It sent Wall Street, along with Australia and New Zealand equity markets to new record highs and saw a bright start across Asian markets. That came to a juddering halt though as Donald Trump signed the Congress Hong Kong Bill into law. The rally came to a juddering halt, with China baring its teeth, signalling it’s displeasure with the bill, and summoning the US Ambassador in Beijing for a dressing down. Worries that the Hong kong law could affect trade negotiations between the two countries saw all of Asia’s equity markets fall and end the day in the red. In the bigger picture, though, one suspects this will be China going through the motions with President Trump able to plead it wasn’t his bill. The President, in fact, had already said he had personally saved Hong Kong a couple of weeks ago anyway. China needs a trade deal as badly as the US at the moment, and pragmatism will overcome pride.

With the US away for Thanksgiving, trade nervousness has spilt over into early European trading, with most markets slightly in the red. Uncle Sam’s absence roasting turkeys means Europe will be headline-driven this morning with activity petering out this afternoon with no New York.

Oil Lower On Trade Concerns

Oil continued easing in Asia following another unexpected rise in US Crude Inventories last night. The US Hong Kong Law left traders fretting over trade negotiation implications, with Brent crude falling 0.45% to $63.85 a barrel and WTI falling 0.55% to $57.80 a barrel. News of a North Korean missile landing in the Sea of Japan has stopped the rot for now. Markets though have long passed ‘peak missile test’ with North Korea, and support is likely to be temporary.

Brent crude has support nearby at $63.50 a barrel, and WTI has support at $57.10 a barrel. With trading thinned by the US absence, conditions are ripe for a clear-out of long positioning if the weak sentiment continues. Energy markets have bought heavily into the trade deal, global recovery story. The reality is the US is pumping more oil than ever and OPEC+ is facing some hard choices at their December meeting.

Gold Has A Dead Cat Bounce

With the dollar edging lower on trade concerns over the Asian session, gold has climbed 0.20% to $1457.30 an ounce in early Europe. The rally is somewhat uninspiring with gold getting a zero boost from the North Korean missile test. Much will now depend on whether China is merely waving its fist over the Hong Kong Law, or it takes the unlikely route and retaliates in some way.

Gold has critical support around $1445.00 an ounce, with a daily close under that region opening a lot of empty air on the charts until $1400.00 an ounce. Gold has technical resistance at $1463.00 an ounce followed by, the now formidable, $1480.00 regions.

MarketPulse
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