Equities trim losses and Bitcoin rebounds

Chris Beauchamp IG

Traders are taking a more measured view of the geopolitical situation this afternoon, says Chris Beauchamp, Chief Market Analyst at online trading and investing platform IG.

Losses stabilise across equity markets

Perhaps the surprise about today has been the relatively muted reaction across equity markets. Oil prices reacted in suitably dramatic fashion, but today has seen US indices emerge as something of a safe haven. Given their poor performance versus other markets so far this year, this perhaps isn’t a surprise, and today’s reaction certainly falls into the category of ‘sell the rumour, buy the fact’. It is early days of course, but stocks seem able to live with the war in the Middle East so long as it doesn’t escalate.

Bitcoin finds its footing

Today’s other move of note was bitcoin, which surged over 5% in the afternoon session. While the price hasn’t rallied of late, it has avoided any major breakdown below $60,000, something that is likely to tempt flows back on hopes that a recovery is at hand. Silver’s sharp reversal and a struggle for gold after initial gains should add to bitcoin’s appeal on a relative basis.

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Chris Beauchamp

EUR/USD appears supported by the 200-day SMA, for now

Following an early pullback to multi-week lows near 1.1670, EUR/USD now manages to reclaim the 1.1700 region as the NA session draws to a close on Monday. The steep retracement in spot follows the equally strong move higher in the US Dollar, as investors continue to assess the geopolitical landscape in the wake of the US and Israel attacks on Iran.

GBP/USD hits new yearly lows near 1.3300

GBP/USD adds to the recent bearish tone, approaching to the key 1.3300 support to reach fresh YTD troughs against the backdrop of the robust performance of the US Dollar. Indeed, Cable’s decline comes amid the firm demand for the safe-haven space in the wake of the US and Israel attacks to Iran.

Gold eases some ground, approaches $5,300

Gold now surrenders part of the earlier advance, reshifting its attenton to the $5,300 zone per troy ounce at the beginning of the week. Indeed, the yellow metal’s firm performance appears propped up by incresing geopolitical jitters in the Middle East, which at the same time fuels the demand for the safe-haven space.