The collapse of the new Italian administration is raising doubts about the political situation there and, more crucially, Eurozone’s stability. Without a government since March, Italy braces itself for another round of election later this year.
Understandably, against this backdrop of political turmoil Italy’s markets plummeted, including bank stocks, government bonds, and the Euro. Risk aversion spikes again on Tuesday.
GBPUSD is somehow behaving like an inverse risk barometer. It goes up on rising risk appetite and goes down on a fall in risk appetite. As a result, GBPUSD hit new 2018 lows on market jitters. The trend here is very consistent but oversold. The next area of support is at 1.32-1.30, the former trading range developed in Oct-’17.
Jackson has over 10 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world largest institutions and hedge funds.
Expertise: Global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University.