Market Analysis

Oil has fallen, once again

FOREX

Thursday’s session began under the spell of risk-on, following yesterday’s inauguration of the 46th President of the United States. Joe Biden’s presidency promises the deployment of a massive fiscal stimulus package as well as greater harmony between the Treasury and the Fed, with the central bank’s monetary policy likely to remain dovish for the foreseeable future in order to help create the necessary conditions for a post-pandemic rebound in economic activity. As expected, the dollar is on the backfoot in relation to other major currencies. Meanwhile, amongst other currencies the pound is emerging as the stand out winner of the current surge in risk appetite, reaching its highest for 2½ years during early Thursday trading. Freed from the shackles of Brexit, sterling’s performance now appears mainly driven by risk, with its performance shadowing that of other risk-related assets, in patterns that resemble those of the major stock indices.

Ricardo Evangelista – Senior Analyst, ActivTrades


GOLD

The presidency of Joe Biden started with expectations for a new stimulus and with a new rally for the bullion price. Gold jumped well above the threshold of $1,850 and is now dancing around the $1,870 mark. This rebound confirms the momentum for gold’s recovery has returned, as investors are betting on further monetary stimulus from central banks in the next few months. From a technical point of view, we can see a first bullish target at $1,900, while only a decline below $1,830 would denote weakness, as the main trend still appears supportive for the yellow metal.

Carlo Alberto De Casa – Chief analyst, ActivTrades


OIL 

Oil has fallen, once again, breaking through the $53.90-54 zone before slowing down below $53. From a technical perspective, the price is playing with the first support zone at $52.70. A breakdown of these levels would open space for further declines and increase the chance of a fresh test of $51.80-$51.90. However, given the main trend is still bullish for oil that still seems unlikely.

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

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