Date: 13 Jan 2020

FOREX

The pound is under increasing pressure, as a growing number of Bank of England officials have now voiced their support for a rate cut. Sterling is down 0.37% against the euro and 0.25% against the dollar during early Monday trading, following this weekend’s publication of an interview with Gertjan Vlieghe, a member of the Bank of England’s Monetary Policy Committee, who signalled his support for a rate cut, unless the country’s economic data improves. There may be further downside risk ahead for the pound later today, with the publication of GDP and industrial production figures, which, if negative, may further strengthen the case for a more accommodative monetary policy.

Ricardo Evangelista – Senior Analyst, ActivTrades


GOLD

Bears are trying again to pull down bullion, with the price that is testing another time the support level of $1,550. If gold falls below this level, it would be a negative signal, opening space for further declines, at least in the short term, as a significant number of stop-losses and profit-taking measures are placed just below this level. It is clear that the slowing down of tensions between the US and Iran and expectation for a positive closure of trade deal phase one between US and China are reducing the attractiveness of safe havens in the short term, as investors are seeing less risk on the markets.

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

EUROPEAN SHARES 
European shares traded steady on Monday following a quiet weekend. Uncertainty is weighing heavily on risky assets as investors are still digesting the latest geopolitical developments between the US and Iran, as well as Friday’s disappointing job report. Many traders are also bracing for a busy week, with much higher market volatility in sight. Important economic data across the world, the signing of the US and China’s phase-one trade deal as well as the beginning of the earning season are likely to set the pace for financial markets this week. Investors are closely monitoring their charts as many European indices are currently trading close to strong psychological and technical resistance levels, waiting for either a break-out or a deeper market correction. So far, the Stoxx-600 Index is trading sideways with Mining shares offsetting gains in the Tech sector. The best performer is the UK’s main index, the FTSE-100 in London, which is benefitting from Sterling’s decline. The market is challenging its first available resistance towards 7,630pts where a break-out could lead prices to 7,675pts, if the pressure continues on the British currency.

 

Pierre Veyret– Technical analyst, ActivTrades

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