Market Analysis

The pound is gaining ground

FOREX

The pound is gaining ground to the euro during early Wednesday trading, on what is now the third consecutive day of losses for the single currency. The success of the UK’s vaccine rollout, especially when compared against a clunky European process that has so far delivered unsatisfactory results, raises concerns that the eurozone’s return to normality may take longer than some predicted, and justifies greater optimism over the speed of the British post-pandemic recovery. Sterling is finding support, with the prospect of no-deal Brexit no longer weighing on the currency and lower likelihood of the BoE introducing further interest rate cuts, which could drive further gains against the euro.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

GOLD AND SILVER
Indices closed yesterday’s trading sessions in green and started this morning in the same way with risk on still dominating sentiment. Moreover, the greenback is strengthening and EUR/USD is getting closer to 1.20. As a result, investors are not keen on increasing their position on gold and bullion declined to $1,835. The last few hours have shown little volatility, after an attempt to recover to $1,850 was stopped.

Meanwhile, the silver story seems to be reduced to a temporary accident. Indeed, the grey metal jumped on the early trading on Monday above $30, before sharply falling yesterday. As we predicted, moving silver is much more complicated than manipulating a small crypto or a single stock and the quick rise was mostly absorbed by the markets.

After the collapse of yesterday, silver is taking a breath and consolidating, but it is hard to see any future movements for the grey metal on its own and not in conjunction either with other metals rallying or at least with fundamental support.

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

EUROPEAN SHARES 
Yesterday’s bullish trading stance continued into Wednesday for both Asian and European shares with most benchmarks edging higher amid a wind of relief brought by decreasing market volatility. European stocks traded higher from London to Frankfurt, mostly driven by the continuing euphoria towards tech shares, especially after both Amazon and Alphabet topped revenue estimates yesterday. Generally speaking, optimism, fuelled by stimulus progress, the vaccine rollout and the fading of the buying frenzy on GME and AMC, is reassuring stock investors around the world. However, by the end of the week this may change as with a busy run of major macro news including today’s EIA crude oil reports, Thursday’s BoE’s decision on rates and Friday’s US NFP. Today’s best performance comes from Milan where the FTSE-MIB Index is trading well above 22,130pts. However, the market will have to clear strong resistance at 22,735pts to unlock upward targets at first 22,900pts and then 23,185pts.

Pierre Veyret– Technical analyst, ActivTrades

 

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