Weekly reviews

Monday session was interesting as oil updated annual highs, and gold moved above $1,300

On September 25, Eur/Usd currency pair continued the previous week tendency and declined significantly. Ambiguous Germany election results, yesterday's Mario Draghi’s "dovish" comments, as well as US dollar gains across the whole spectrum of the market put pressure on the single European currency, which moved to the nearest support of 1.1820. Today the bears push the market lower.

In turn, the dollar got some support from the statements of New York Federal Reserve Bank’s head, William Dudley, saying that the FED’s inflation goal of  2% will soon be achieved and the policy of a gradual rate hike will continue its course.

After the negative last week close below $1,300 per ounce and the not very convincing opening of trading on Monday, the gold market managed to stop the decline and moved to the expected growth, during yesterday's trading.

The catalyst for such dramatic changes in mood and technically expected growth were statements of the Foreign Minister of North Korea. In his speech in New York, a North Korean official said that the United States was the first to declare war on North Korea, and now the DPRK has every right to take retaliatory measures. Moreover, according to the North Korean minister, Pyongyang can shoot down US strategic bombers even outside the air borders of the DPRK.

It was Foreign Minister of North Korea's reaction to the next tweet of Trump, which was published after the minister's speech at the UN. In particular, Trump wrote: “Just heard Foreign Minister of North Korea speak at U.N. If he echoes thoughts of Little Rocket Man, they won't be around much longer!”

Amid the escalation of the conflict between the United States and the DPRK, the demand for safe haven assets, including gold, has risen sharply.

Yesterday, the Brent oil market continued gaining, rapidly passing the level of the annual maximum of $56.70, coming close to the level of $60 per barrel. Apparently, there was a close of shorts and activation of stop orders on this background. That is a purely technical situation. The news background assumes discussion of the OPEC agreement extension after March 2018 and the possible closure of oil exports from Kurdistan by Turkey, amid Kurdistan independence referendum. The situation is not simple and interesting. Technically, we can expect a pullback to a new strong support zone 56.70-57.00 (the former annual maximum), but it seems that the oil market is experiencing a massive injection of hot speculative capital. Thus, we can expect the continued growth of the oil market.

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