Market Analysis

Strong gains for the pound

FOREX

Strong gains for the pound versus both the dollar and the euro during early Monday trading, as investors price in increasing chances of a deal being reached between the UK and the EU. While negotiators are still struggling to reconcile opposing views on fishing and legal matters, it appears increasingly likely that both sides are committed to reaching an agreement, as illustrated by the statement made on Sunday by the Chancellor of the Exchequer, Rishi Sunak, who said he is confident in a trade agreement being reached with the EU soon.

Ricardo Evangelista – Senior Analyst, ActivTrades


OIL 

Stocks started the week in green in the early trading. In this still “risk on” scenario, the oil price is extending its gains. Investors are betting on the efficacy of the vaccine and with it, slowing numbers of coronavirus cases within a few months. These expectations – which of course will need to be confirmed later this winter – come in conjunction with expectation that OPEC+ will renew its current cuts in December. Moreover, crude oil inventories in the US are slowing down. All these elements are supporting oil with WTI now testing $43, while Brent jumped above $45 and continued its rally to $46 to close in on the peak reached in late August.

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

EUROPEAN SHARES 
The “risk-on” trading stance on stock markets has continued into the last week of November. Investors, encouraged by enthusiasm surrounding successful vaccine developments, signs of the global economy recovering as well as speculation about more dovish monetary policies to come from the Fed, have sent stock prices higher on Monday.

Technically speaking, the configurations are starting to become really interesting on EU assets as most benchmarks are now challenging key resistance levels, the only ones before a likely price acceleration inside a bullish trend resurgence movement. The Stoxx-50 Index is currently challenging the 3,500pts level where a clearing could open the way to 3,610pts on a very short-term basis while the DMI indicator already shows a growing buying pressure inside an increasingly clear directional price action: the bulls seem to be back. However, a failure below the 3,500pts level could send the market back to 3,440pts, 3,400pts and even 3,355pts.

Pierre Veyret– Technical analyst, ActivTrades

 

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