Date: 09 Apr 2020

FOREX

Positivity continues to be the prevailing sentiment in the financial markets, with the S&P 500 Index once again in a bull market. In the FX space however, activity has been subdued with this lack of dynamism stemming from investors being on standby ahead of important risk events later today. Chief among these is the publication of weekly American unemployment figures with the last two weeks revealing record-busting numbers of new claims. As a result, investors are buckled up in anticipation and this explains the relative steadiness in the correlation between the dollar and its peers, with the Index that measures the performance of the greenback almost flat on the day. We should expect more activity and fluctuation later in the day once these unemployment figures are published.

Ricardo Evangelista – Senior Analyst, ActivTrades


GOLD

Gold’s spot price rebounded on the support level of $1,640, thereby confirming the recent positive mode. The bullion price soared to $1,660 and we are just 1% away from the one-month peak achieved earlier this week. Despite the risk-on approach on stock markets of the last few days, investors are still confident that gold can shine further. This is particularly the case in a scenario where central banks are going to be forced to add a tremendous quantity of liquidity into the monetary system while keeping rates close to zero for a long time, as long as inflation doesn’t start to soar. Moreover, gold is also seen as an insurance in the event of further collapses on stock markets due to coronavirus.

Carlo Alberto De Casa – Chief analyst, ActivTrades


OIL 

After yesterday’s oil price rally, investors are in a wait and see mode as the OPEC+’s key virtual meeting approaches. It will be crucial for the group to reach a quick agreement to mitigate against the worst-case scenario of an enduring global glut, which was the result of the failure of the previous OPEC agreement. Technically, the WTI price is moving laterally after the huge spike of volatility seen last Friday and earlier this week. A first positive signal will arrive with a clear climb above $27, even if the technical scenario is secondary today with the news from OPEC+ the real market driver.

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

EUROPEAN SHARES 
Shares are trading higher in Europe on Thursday despite a shy market open and modest rises overnight by most Asian stocks. The appetite towards riskier assets seems to be back on track on what’s set to be a busy day before the Easter weekend. Even if uncertainty remains on the timeframe for economies to re-open and on how hard it will be for them to recover, investors seem to be willing to extend this week’s rally with fresh highs likely today. Volatility is also likely to be on the rise today as many market participants will be cautiously monitoring a batch of important data releases coming from both Europe and the US.

 

The Stoxx-50 Index is approaching strong technical resistance levels and the fact that the current short-term bullish trend is slowing down as the market nears these levels is a cause for concern. Although markets may still initially climb higher, the temptation for investors will be to take their profits and reduce their exposure to risk markets, as long as there doesn’t seem to be any significant improvements in the struggle against the pandemic.

Currently, the market is being pushed by financial and discretionary consumer shares with companies like BNP Paribas, ING, Adidas and Daimler among the largest movers. The DAX-30 of Frankfurt is the best performer in the eurozone with the market trading close to 10,600pts. Technically, the market has opened the way for an extended rally towards the gap between 11,000pts and11,540pts zone after the prices cleared its last Speedline. However, the MACD indicator also shows a trend slowdown with a bearish divergence and this should be taken seriously as the DAX, like the Stoxx-50, is also approaching strong technical levels.

Pierre Veyret– Technical analyst, ActivTrades

 

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