The fight between pound and dollar
After losing ground to the dollar and the euro during Thursday’s trading, the pound regained the front foot during early Friday trading following press reports that Prime Minister Boris Johnson’s closest advisor is set to leave his post by Christmas. The claims that Dominic Cummings will leave his role at Downing Street, followed in-fighting within Johnson’s inner circle and represents a blow to Brexit hardliners. Given the continued uncertainty surrounding the outcome of the post-Brexit negotiations with the EU as well as the bleak economic and the continuing healthcare crisis in the country due to coronavirus, the fact that investors are this morning backing the pound suggests the departure of Cummings means there is an increased likelihood of a softer break from the EU.
Ricardo Evangelista – Senior Analyst, ActivTrades
European markets slid lower at the open on Friday, continuing the corrective move registered yesterday on most benchmarks, as a risk-off mood prevails. Spikes in virus infections added to the lack of progress regarding the new stimulus package in the US is a perfect occasion for investors to take some profits ahead of the weekend. However, this bearish correction shouldn’t drive markets very deeply as they have already cleared major resistances at the beginning of the week -further evidence of the strong bullish sentiment on the long-term view. The French CAC-40 index has seen one of the best performance so far, even if prices could technically go deeper before registering any rebound. The first support can be found over 5,230 pts and then 5,165 pts by extension, while the 5,450 pts/5,525 pts stays as the main objective on the short-term basis.
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.