ICM: US Stocks rose for the Third Consecutive Day, Pound Tumbles

ICM, the leading London-based FX and CFDs provider, reported that major US indices extended gains despite the increased probability of a trade war between the United States and China. Moreover, the pound fell from a three-week high amid the resignation of the Foreign Minister Boris Johnson.

US indices rose for the third consecutive day as traders continue to digest the economic data from the United States. The data suggests that the economy is still in its expansionary face and outperforming other major economies. As per ICM trading platform, the Dow Jones had its best one-day performance since June 6. The index rose 327 points to settle at 24784. The financial and industrial sectors supported the Dow to get back in green for the year. SPX500 and Nasdaq Composite Index added 0.9% each.

The dollar index bounced back above the 94 level after finding support at the 50-day simple moving average. The U.S. consumer credit reached $24.56 billion in May, the highest since November 2017, which signals that the consumer spending could be picking up. USDJPY breached the 111 level to reach a high of 111.20, the highest level since May 21st.

ICM highlighted in its report yesterday that the political uncertainty in the United Kingdom regarding the Brexit deal could way on the pound. The Sterling retreated from its highest level since June 14 due to the resignation of the British foreign minister. As per ICM trading platform, the pound traded at a high of $1.3362 during the early European session and tumbled to a low of $1.3190 on the news. From a technical analysis perspective, yesterday’s high coincided with the 50-day simple moving average and the 23.6% Fibonacci retracement of the drop from $1.4380 to $1.3052. The resignations signal that we could be far from a real Brexit and the pound will remain vulnerable to the headlines related to the Brexit deal.

Gold prices fell from a two-week high of $1266 to settle near $1257. The robust economic data from the United States favors the monetary policy stance of the Federal Reserve which is weighing on the precious metal. On the other hand, the silver ounce posted the highest close in two weeks at $16.10.

Oil prices ended higher on Monday supported by the concerns over supply shortages. In addition to the shortage of supply from Canada, Libya, and Venezuela, Norway could be added to the list, as hundreds of workers due to strike after the rejection of a proposed wage deal. The West Texas Intermediate was almost flat on the day where it settled at $73.97. On the other hand, the Brent oil gained more than one percent and closed at $78.17. The American Petroleum Institute will report the weekly crude oil stock later today.

AXIR Consulting

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