GameStop: Game Over or Game On? – Rabobank

Dhwani Mehta FXStreet

The Rabobank Research Team, in its daily report, offers his take on the recent drama over the broker’s short-squeeze and Robinhood, deciding all trading in GameStop and a few other key stocks were to be sell only.

Key quotes

“On one level this is indeed Game Over. The House wins. The Empire Strikes Back. ‘Sanity’ prevails. And, yes, we should not be encouraging retail investors to manipulate markets and pile into obvious bubbles with stimulus cheques “because markets”.”

“However, on another level this is Game On. The retail horde are not going anywhere, and may have no day jobs to go back. They have been defeated here, but can pile into any stock or asset they choose, forcing brokers or regulators to shut down trading, making life hard for The Street, and a mockery of the system. Moreover, they have political support: when AOC and Ted Cruz and Donald Trump, Jr. all agree the system is rigged, you know something is happening.”

Read: Brokers’ restrictions on GME and AMC set a dangerous precedent – FXStreet Editorial

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

AUD/USD shows resilience below 38.2% Fibo. near mid-0.7100s

The AUD/USD pair touches a one-and-a-half-week low, around the 0.7140 region during the Asian session on Monday, though it lacks follow-through. Spot prices currently trade just above mid-0.7100s, down nearly 0.25% for the day.

USD/JPY: Japanese Yen edges lower vs USD amid Middle East jitters as Fed, BoJ meetings loom

The USD/JPY pair attracts some buyers at the start of a new week and climbs closer to the 154.00 mark during the Asian session, reversing a part of Friday's losses. Spot prices, however, remain confined in a range held over the past week or so and within striking distance of a nearly seven-month low, touched last Tuesday, as traders await this week's key central bank events.

Gold: Fed’s rate decision to drive the next move

Gold reflects a subdued performance at the start of the Federal Reserve’s monetary policy week at around $4,330. Fed’s interest rate expectations heavily influenced last week after the release of the hot United States Producer Price Index and Consumer Price Index reports for August.

Bitcoin consolidates, Ethereum faces hurdle, XRP nears key support

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) start the week near crucial technical levels after a broadly bearish performance, correcting over 4%, 1.5% and 5% last week. BTC consolidates around $77,600, while ETH approaches key $2,550 resistance. Meanwhile, XRP trades near its key level around $1.354, making this support level crucial for its near-term outlook.

US Dollar Weekly Forecast: The last line of defense

There was no respite to the downward trend for the US Dollar this week, which added to the prior week’s retracement and at some point flirted with the area of four-month lows. Indeed, after trading at levels just shy of its psychological 100.00 barrier early in the month, the US Dollar Index has come all the way down to challenge the 98.50 zone, extending its negative streak for the third month in a row.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.