Date: 22 May 2020
The euro is on the back foot during early Friday trading, losing ground to all the safe haven currencies as the mood in the markets drifted towards risk aversion and the focus of investors shifted from the reopening of economies to the escalation in US-China tensions. After China announced a new stricter security law in Hong Kong, the US responded by threatening to react very strongly against any changes. The reignition of tensions between the two economic powerhouses is bad news for the prospects of a world economy already battered by the coronavirus and is likely to increase the flow towards refuge assets, such as the Japanese yen and the Swiss franc.
Ricardo Evangelista – Senior Analyst, ActivTrades
Gold remains in a positive technical environment, despite price declines seen yesterday. Evidence of resilience in bullion markets has been seen this morning, with a good number of investors prepared to buy into dips and seemingly not worried by price corrections. Technically, spot prices have fallen in the intraday trading below the support zone of $1,725, before recovering in the last few hours. The early trading of today seems to be confirming that the support level is still valid, after yesterday’s test.
Carlo Alberto De Casa – Chief analyst, ActivTrades
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