Market Analysis

The barrel has fallen again

FOREX

The dollar is on the backfoot against the yen during the early part of Monday’s session, with the Japanese currency gaining almost 0.8% to the greenback. In light of the recent dynamic for this pair, the yen’s gains are remarkable. The dollar has been on a winning streak since the 10th of March, amassing gains of about 8.5% against the yen until the start of today’s session. The halting of the greenback’s gallop is, at least partially, the result of a coordinated move by the Fed and several other central banks around the globe to increase the liquidity of the American currency. Many of the recent dollar gains came from the difficulties many international businesses felt in finding sufficient quantities of the currency for payments, which was obviously pushing up the dollar’s value.

Ricardo Evangelista – Senior Analyst, ActivTrades


OIL 

The barrel has fallen again as there is simply too much oil with a massive oversupply generated from this crisis scenario where demand has fallen, and supply has grown. The strong rebound of Friday, when the price lifted to $28, was over in just a few hours, and oil has fallen again to test the key support level at $21. In the last few hours we have seen a rebound to $22.50, which can be considered a modest rebound in the current conditions of huge volatility. Technically the holding support zone of $20.50-$21 is now crucial. The first positive signal would only arrive if prices manage to recover and hold on to $24, as the overwhelming sentiment remains very bearish and hugely volatile.

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

EUROPEAN SHARES 
Shares tumbled globally on Monday, with prices returning to last week’s lows as the spread of the deadly virus continues to have a big impact on market sentiment. Even though most markets tried to consolidate around major technical support zones last week after one of the steepest declines in decades, investors’ trading stance remains clearly bearish once again this week. The recent monetary and fiscal stimulus packages provided by central banks as well as nations around the globe didn’t have the expected impact on markets as most investors await reassuring data on the virus front. The fact the death toll continues to rise everywhere, with no peak in sight, is the main driving force sending markets lower at the moment. Investors remain very worried to see governments struggling, especially in Europe, to flatten the curve of Covid-19 cases even though a lag certainly exists between draconian measures being taken and actual daily data of new cases and deaths. Elsewhere, the fact the US Congress failed to agree on an aid plan didn’t assure markets and investors are now anticipating US GDP to shrink by a record 30% in Q2.

The worst performers on the Stoxx-600 so far is coming from companies like Linde, BASF and Air Liquide, who have all recorded sharp drops in their share price. The FTSE-100 Index is trading at the bottom of the table today with the price falling below 4,800pts early in the morning before registering a slight rebound to 5,000pts, which is the main resistance for the price at the moment.

Pierre Veyret– Technical analyst, ActivTrades

 

Source: ActivTrader

*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.