Market Analysis

Markets are set in a bullish limbo

FOREX

After several days gaining ground to other major currencies, the dollar is trading flat during the early part of Thursday’s session. The greenback’s recent strength resulted from expectations that a larger than previously thought stimulus package, that Joe Biden will seek to deploy once he is sworn in, could force the Fed to anticipate the tapering of its asset purchase program. This prospect drove the 10-year treasury yield above 1% for the first time in months, forcing an increase in demand for the American currency. However, with a speech by Chairman Jerome Powell scheduled for later today, investors are pausing in their quest for dollars and will be paying close attention to the Fed chairman’s words, to try and find clues as to the central bank’s stance on the increased fiscal intervention.

Ricardo Evangelista – Senior Analyst, ActivTrades


OIL 

No news is good news: this old motto describes the current situation on financial markets. Despite tragic figures coming from Covid-19, markets are set in a bullish limbo with the main environment firmly risk on. In this scenario, oil benchmarks are consolidating after the recent gains, which pulled up prices to their highest level since the coronavirus outbreak destroyed demand. From a technical point of view, the main trend remains positive for both WTI and Brent. Focusing on WTI, we have seen a new bullish impulse in the last few hours, which has driven the price above $53 again, without managing to break through resistance at $53.30. There is now a clear support zone at $52.70, with the next significant support level at $51.50. A new positive signal will arrive if the price breaks through $53.90-$54.

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

EUROPEAN SHARES 
European markets ticked higher on Thursday alongside US futures as hopes of a recovery continue to drive market sentiment higher. Joe Biden’s team managed to reassure investors after announcing a further $2 trillion relief plan to the Congress, which had an immediate bullish impact on the three main US benchmarks. Furthermore, it may still be the beginning of a new “risk-on” trading phase as investors look forward to hearing more details from Biden’s economic package, which is due later today. Even if most markets are drifting on a very short-term basis, it seems hopes brought by this fiscal boost and the global rollout of vaccines are offsetting valuation fears. Meanwhile in Europe, carmakers, banks and tech shares are the best performers and most benchmarks remain positive. On the flipside, Carrefour is one of the worst performers after the French government opposed Couche-Tard’s bid for the French group. The CAC-40 Index is still trading well above 5,600pts today even if both the bullish pressure and market directionality are slowing.

Pierre Veyret– Technical analyst, ActivTrades

 

The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.

All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of futures performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.