Market pulse: Fear and caution back on markets

Fear and caution returned to the market. The uncertainty, born in the aftermath of Brexit, is growing and liquidity in GBP is dropping. Additional tension is created by the unclear political situation in Australia and the upcoming presidential elections in the US.

Despite the positive sentiment after BREXIT and the sell-off on the day of the referendum, the caution comes to the fore.
So far, equity markets traded the probability that the central banks will loosen their policies to keep interest rates low in the long-term, which was the reason for the upward movement of prices. Now, however, investors started noticing the first speculative outbreaks like the one in the banking sector in Italy and estimates that additional capital will be needed to meet the consequences of Brexit.

The appreciation of the JPY and the decline of the GBP made investors pay attention again to the problems, rather than the political opportunities of the markets.
In the last couple of minutes, we saw a short-term increase in the index prices, which gives us a good opportunity for new short positions because the likelihood of a downward movement is far more superior to that of an upward movement.

We can see short term corrections in NZD/USD and AUD/USD, which allows us to open new short positions.

Goldman Sachs lowered its forecast for GBP/USD and EUR/USD and increased its target for EUR/GBP.

Gold, Silver and yen will likely remain the preferred safe haven by traders and investors

It is very likely that the ongoing risk-off trend will continue in the financial markets.

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