Market Analysis

The euro is gaining ground

FOREX

The euro is gaining ground to the dollar during early Wednesday trading, following Janet Yellen’s comments to the Senate finance committee in Washington as well as Italian Prime Minister Comte surviving a vote of confidence. Yellen, the Biden nominee for treasury secretary, reaffirmed her belief in the importance of the stimulus package proposed by the incoming administration and the continuation of the Fed’s dovish monetary stance. The combination of these two policies is likely to decrease real interest rates even further, generating conditions conducive to further dollar weakness. Meanwhile, in Rome the Italian Prime Minister survived the departure of one of his coalition partners, avoiding a political crisis that potentially could have affected the confidence of investors in the single currency. Considering these two scenarios it seems reasonable to expect more dollar weakness ahead.

Ricardo Evangelista – Senior Analyst, ActivTrades


OIL 

Oil is confirming its positive momentum with WTI rebounding above $53. Market sentiment remains positive as traders are building further long positions, in a clear bet on the demand side recovering once the vaccinations defeat the virus, putting an end to the lockdown of the last few months. Moreover, the price seems to be supported by the cuts decided by Saudi Arabia just a few hours after the last OPEC+ meeting. Technically we would have another positive signal if WTI breaks through resistance at $53.90-$54, coming on the back of rebounds above first $52.70 then $53, which already showed there is support for the black gold.

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

EUROPEAN SHARES 
Equity markets traded higher on Wednesday as the “risk-on” trading stance still prevails, driven by current stimulus plans and corporate results. Investors seem to be pricing such a distant future that even the extended restriction measures, now in place in many countries, are no longer affecting market sentiment significantly. Most market operators now have their eyes on the end of the pandemic of course but also towards earnings as well as the future of international trade, anticipating brighter prospects everywhere. Today’s trading session is however likely to become volatile as many traders wait for major macro data from Canada, the UK and the US as well as earnings from Procter & Gamble, Alcoa, Soitec and Morgan Stanley.

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 (“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.