Market Analysis

The Dollar continues to hover close to its highest level

FOREX

Despite an improvement in market sentiment, the Dollar Index continues to hover close to its highest level in two months during early Monday trading. Figures recently published indicate the continuation of the economic recovery in China, which stimulated investors’ risk appetite, with the major stock indexes all trading in the green. However, due to concerns about the second wave of the coronavirus in Europe and the impact the worsening of the situation is likely to have on the economy coupled with Brexit-related tensions once again building up, downside risk persists for both the euro and sterling in relation to the dollar.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

EUROPEAN SHARES 
European markets opened higher on Monday, continuing the trend registered overnight in Tokyo, Hong-Kong and Seoul as investors welcomed the latest encouraging data from China. While Beijing’s economic recovery seems to be well underway, tensions with Washington continue to grow after the US issued another export restriction on China’s largest chipmaker. Monday morning’s rally on stocks is likely to be short-lived as investors will face more uncertainty and volatility from this week’s busy agenda. Today starts the final round of EU-UK Brexit talks while tomorrow brings the first Trump-Biden presidential debate ahead of the election in November. Wednesday sees the release of further important data from China as well as global crude oil inventories while the last US non-farm payroll before the presidential election looms on Friday. In the meantime, the ongoing battle between US Democrats and Republicans for a new stimulus package before November is likely to keep investors cautious with their trading this week, making most markets volatile but lacking a clear direction. Technically speaking, the Stoxx-50 Index is registering a rebound on the strong support level at 3,145pts but crucially it needs to clear the zone at 3,222-3,240pts zone for an extended rally up to 3,300pts and beyond.

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.