Date: 23 Jun 2020
As an increasing number of economies continue to ease lockdown measures, risk-on seems to have taken over market sentiment. Risk-related currencies, such as the Australian dollar and the euro, continue to make ground during early Tuesday trading, while those that acted as safe havens during the darker days of the pandemic are now retreating. This scenario is perfectly illustrated by the performance of the euro versus the US dollar; the single currency has gained more than 1% to the greenback so far this week. The American currency, much in demand when investors prioritised safety, is now on the back-foot, signalling the markets’ renewed hopes of a quick economic recovery.
Ricardo Evangelista – Senior Analyst, ActivTrades
The spot price of gold remains steady, just a few dollars below the 7-year high reached last month. Investors’ appetite for bullion remains huge: despite the large recovery seen in stocks from April onwards, the scenario remains highly uncertain, with potential new corrections just around the corner and traders are still buying gold as a hedging asset. Moreover, central banks are extending their expansive monetary policy, lifting investors’ interest for gold to an historic high.
Carlo Alberto De Casa – Chief analyst, ActivTrades
European stock indices opened significantly higher on Tuesday after Washington reassured investors on the state of the US’ relationship with China with President Trump stating the trade deal signed with Beijing in January was still “intact”. These few words were enough to offset recent uncertainty surrounding risk assets, reviving market sentiment and driving prices higher. The general mood remains positive so far with most investors continuing to expect higher highs this year, with 2019 levels in sight amid expectations of a V-shaped recovery. Having said that, it will certainly take a bit of time for some businesses to return to being profitable as businesses adapt their models to this new work-from-home economy. This structural change is likely to create different opportunities for stock traders in the near future.
The DAX-30 is the eurozone’s top performer today with the index trading above its recent consolidation zone, near 12,500pts. An extended bullish move towards 12,730pts and 12,925pts could take place soon if it clears resistance at 12,540pts.
Pierre Veyret– Technical analyst, ActivTrades
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