Market Analysis

Oil continues to struggle

GOLD

Despite the rebound of European stocks, gold is unable to sustain any solid recovery and is still trading below $1,500. Yesterday we had a first attempt at a recovery, as the price rebounded strongly from the support level of $1,450, but the main trend remains unchanged. It is clear that the selloff of gold extends far beyond fundamental reasons as investors are still struggling to find cash for covering margin calls or rebalancing their portfolio amid these turbulent and volatile times. Cash, rather than gold, seems to be the real king in this scenario.

Carlo Alberto De Casa – Chief analyst, ActivTrades


OIL 

Oil continues to struggle as investors are seeing every rebound as a good time to sell. After the price managed to recover $30, it fell again this morning as gains on stock markets began to slow down. Volatility is dominating this bearish scenario, with a first support level at $28 and a second barrier placed at $28.50, while the first significant resistance is located at $31.50.

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

EUROPEAN SHARES 
Shares jumped higher on Tuesday in Europe, following a positive trading session in Asia overnight as traders digest the swathe of monetary responses from governments and central bankers around the world. An equilibrium price may be in sight on most markets as bearish trends seem to be slowing down with the price and technical indicators diverging. Market volatility is also noticeably lower this week compared with last week but still remains unusually high while directionality is waning as investors still hesitate between “buying the dip” and limiting their exposure to risk assets. Globally, it is good news to see more price stabilization on share markets after the worst sell-off since 1987. However, the current recovery attempt will need to be supported by further leverages for the gains to be sustained. Investors welcomed the global monetary response from central banks but now expect more on the fiscal side as packages from different economic areas are on their way.

All of the European benchmark are trading higher with the best performance coming from the IBEX-35 in Madrid. The market is currently trading near the 6,200pts zone following a rebound over 5,820pts yesterday. Prices are still within their short-term bearish channel but bullish divergences between the market and the RSI indicator may announce a trend invalidation to come. The market will however have to clear 6,555pts in order to unlock further bullish potential towards 7,000pts and 7,370pts on a short-term basis.

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 PLC (“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.