Market Analysis

The Pound is under pressure

FOREX

The Pound is under pressure versus both the euro and the dollar, losing more than 1% to both currencies during early Monday trading. The markets are showing signs of nervousness, as the talks between the EU and the UK continue with both camps’ positions remaining far apart on the issue of the so-called level playing field. As time begins to run out, the base case scenario for the majority of investors is still that an agreement will be reached before time runs out. However, the clock is ticking and every day that passes without an agreement being reached increases the pressure and raises the stakes, forcing investors to start factoring in the possibility of there being no deal in place by December 31, at the end of the transition period.

Ricardo Evangelista – Senior Analyst, ActivTrades


GOLD

After last week’s rebound, gold is taking a break and the price is consolidating and trading between $1,830 and 1,840 per ounce, a fractional decline from last week. The next few trading sessions will tell us how strong the resistance area of $1,850 is, which is the first clear barrier for further recoveries for the yellow metal. Vice versa, buyers seem to have created a valid support zone between $1,810 and $1,820, which has supported last week’s price recovery. We should also note that the selloff seen on dollar has (temporarily?) stopped, confirming that markets are now waiting for new directional drivers

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

EUROPEAN SHARES 
Most stock markets around the world drifted lower on Monday after new bearish leverages appeared and weighed market sentiment down at the start of the week. Even if most investors have their eyes on the economic recovery, their current focus on both macro data and international trade relationships has made them temper their exposure to share markets. This morning’s mixed sentiment is taking place after investors digested renewed US-Sino trade tensions, sparking concerns over the future of the relationship between the world’s two largest economies, and another deadlock in Brexit negotiations which also worries market operators as the ultimate deadline for a deal is approaching quickly. Furthermore, after last Friday’s disappointing US jobs report, some investors are now betting on more economic and monetary support from both central bankers and governments with further US stimulus and increased bond-buying program from the ECB expected as early as this week. These hopes may increase the downside risk on most markets as if data, central bankers or governments disappoint, the current bearish corrective move is likely to become sharper and deeper than initially expected.

The FTSE-100 Index from London is one of the only positive performers in Europe today, as prices are getting boosted by the pound’s decline.

Pierre Veyret– Technical analyst, ActivTrades

 

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