Market Analysis

The euro is gaining ground on other major currencies

FOREX

The euro is gaining ground on other major currencies during the start of Friday’s trading session. The single currency found support after yesterday’s ECB monetary policy committee meeting during which ECB president, Christine Lagarde, stated that the current asset purchase program – totalling €1.85 trillion – remains flexible, meaning it may not all be used, or it could increase should circumstances require it to. Lagarde managed to navigate the press conference without triggering any alarm bells, with the flexible yet measured stance of the central bank maintaining the confidence of the markets in the prospects of the single currency, despite the pandemic and a looming double-dip recession triggered by the resurgence of the virus in the euro-zone.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

EUROPEAN SHARES 
European equity markets drifted lower on Friday, following a global trend after mounting virus-related fears hit sentiment at the end of the week. The recent market euphoria fed by further stimulus plans and corporate results, peaked on Thursday as Joe Biden’s inauguration as President pushed US markets to record highs. Following that it seems most investors now feel the party is over and are back to the reality of the pandemic, after the situation worsened in many countries.

Technically speaking, this return to the “risk-off” mood can be seen on most charts as a “bull-trap” situation yesterday, after many benchmarks briefly edged higher than their major resistance level before collapsing again inside their short-term consolidation patterns.

Even if the market correction is sharp, there is no real threat to the long-term bullish trend as no major supports have been broken yet. Investors may be tempted to put the rally on hold by taking some profit ahead of the weekend, but the lack of a strong bullish market reaction next week could lead prices to a deeper correction.

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.