Market Analysis

The pound is paring gains versus the dollar



The pound is paring gains versus the dollar and the euro during early Friday trading following a statement issued by EU leaders last night warning that a post-Brexit deal will be very unlikely unless the UK adopts a more flexible stance. With the ball now in the British court a reaction is expected from Boris Johnson’s government. Whatever happens over the next few weeks, it seems that markets don’t expect a no deal scenario, with the pound remaining very close to $1.30. The brinkmanship adopted by both parts is seen as tactical manoeuvring rather than an unwillingness to negotiate. Still, a bumpy ride is expected for sterling, with each back and forth likely to increase volatility.

Ricardo Evangelista – Senior Analyst, ActivTrades

source: ActivTrader


After yesterday’s sell off on European stock markets, gold is remaining steady just above $1,900. Rising figures of Covid-19 infections are increasing fears of more lockdowns with all the related consequences. In other words, the impending need for more monetary stimulus to mitigate the impact of the coronavirus-induced crisis is keeping investors’ gold appetite at its peak. That said, we should be cautious as at some point central banks will start to be more resistant in adding new stimulus, but this scenario is far from imminent.

From a technical point of view, gold still appears in a positive mode but for further rallies we would need to see a clear breakup of the $1,920-$1,930 level. A fall below $1,880 and later on below $1,860 would denote weakness.

Carlo Alberto De Casa – Chief analyst, ActivTrades

source: ActivTrader


An optimistic wind blew over European assets shortly after the opening bell on Friday morning, with almost all benchmarks climbing higher. Today’s risk appetite for European stocks has been boosted after investors welcomed positive developments on the corporate front. Optimism is particularly prominent in the automotive and engineering sectors after both Volvo and Thyssenkrupp reassured investors with their past performances and short-term outlooks. However, traders are still likely to face a “not-so-easy” trading session today as many uncertain market drivers remain. Investors are still digesting the latest set of Covid-19 restrictions in France and the UK with lingering concerns they may severely impact an already fragile recovery. Furthermore, volatility is likely to be on the rise today for UK shares, not only because of the expiry of options, but also because of Boris Johnson’s potential decision to walk away from the Brexit negotiation table with the EU.

Pierre Veyret– Technical analyst, ActivTrades

source: ActivTrader



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.