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Tech stocks worst week since March

GBP/AUD – Daily Candlesticks
Source: GKFX / MT4 (September 13, 2020)

GBP/AUD has entered a cluster of support from a potential rising trendline and a long-term 300pip support zone between 1.72/75. The area offers a good risk: reward long opportunity, however should the zone break it would indicate strong bearish bias for future short trades.
 

TAKEAWAYS


•    Tech stocks had worst week since March market sell-off
•    Vaccine news: AstraZeneca resumes UK clinical trials, Pfizer could be ready by year-end
•    Controversial UK ‘internal markets bill’ up for 1st parliament debate
•    Beijing opposes sale of TikTok US operations - reports
•    DAY AHEAD: Japan & EU industrial production data
 

GURU WISDOM


“The investor’s chief problem, even his worst enemy, is likely to be himself.” — Benjamin Graham
 

MARKETS


The British pound was hammered in the last week amid renewed Brexit concerns, with EUR/GBP touching a 5-month high while GBP/USD had its worst weekly drop since March. The sell-off in stock markets and dovish rhetoric from the ECB helped the US dollar rise for a second week – its first consecutive weekly gain since May.
Tech stocks turned lower on Friday to finish their worst week since March, though there was some late-buying that prevented even larger declines. A rally in mining stocks after the departure of Rio Tinto’s chief executive helped European stocks close slightly higher. Shareholders had been campaigning for management to take responsibility after the company destroyed ancient Aboriginal caves.

A lack of new stimulus from the ECB saw gold edge lower on Friday but it still finished the week higher. Oil prices closed lower for a second week despite a small gain on Friday. The losses come at the end of US driving season, as the dollar strengthened and on renewed stock market jitters.
 

GBP & parliament


British politicians will debate the internal markets bill- the new legislation that disrupted EU/UK trade talks and saw the pound get clobbered last week. The Conservative Party have a large 80-seat majority after last December’s snap UK election, meaning it should be able to easily pass the bill. If the debate on Monday shows the government is on course to pass the bill, the pound could see more weakness, however signs of an unlikely defeat of the bill could see Sterling bounce back.
 

No TikTok deal


Officals reportedly told CNBC that Beijing opposes the forced sale of TikTok’s US operations. The inference is that the Chinese government would rather see the company simply close operations in the US. That opinion would coincide with the updated ‘export control rules’ on the sales of Chinese technology to companies overseas. The new rules could force TikTok owner ByteDance to get a license to sell TikTok to a US bidder like Microsoft or Oracle.  
 

Vaccine news


The progress of new coronavirus vaccines has been a key underpinning for rising stock markets since March. The news that AstraZeneca and Oxford Univeristy had to pause stage 3 trials coincided with a sell-off last week, news that trials will resume in the UK could support risk sentiment going into the new week. As could optimism from Pfizer that it is expanding its own stage 3 trial to 44,000 people from 30,000 – and that the vaccine could be ready by the end of the year according to CEO Albert Bourla.
 

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