Market Analysis

The US dollar is edging higher during early Wednesday trading

FOREX

The US dollar is edging higher during early Wednesday trading, as investors appear increasingly convinced that the Fed will move to start tapering in November. With this Friday’s release of employment data looming on the horizon and expectations remaining optimistic, with a consensus of around 480,000 new jobs created during September, rising energy prices are piling the pressure on the Fed to start tightening policies. The recent escalation of energy prices, combined with lingering supply chain issues, are pushing inflation up and feeding into the narrative of imminent tightening that is supporting the dollar.

Ricardo Evangelista – Senior analyst, ActivTrades

Source: ActivTrader

 

GOLD

Gold is unable to take advantage of the current risk-off trading stance today with the price consolidating over $1,750. Even if the market has been trading sideways since the beginning of the quarter, the recent bullish break-out of the short-term bearish channel remains valid so far. Of course, a rising US Dollar is likely to keep putting pressure on gold, and the market will have to clear the zone at $1,765-$1,770 to unlock the door to further gains up to first $1,777 and then $1,790, but the price remains well supported from a technical perspective. The RSI indicator is still inside the buying zone, following a bullish break-out of its own trendline and we will keep our bullish view on gold as long as the support level at $1,747 remains unbroken.

Pierre Veyret– Technical analyst, ActivTrades

 

EUROPEAN SHARES 

European share markets drifted lower on Wednesday, alongside Asian equities and US futures amid a lingering “risk-off” trading mood. Traders continue to reduce their exposure to riskier assets and seek safe havens as uncertainties across multiple fronts weigh on today’s market sentiment. Rising high yields and currencies in both the US and Europe don’t provide the best set-up for stocks today, leading investors to look for diversification options such as crypto markets. Of course, with Europe’s ongoing energy crisis, energy-linked stocks remain the most resilient asset on the old continent. However, investors are likely to stay focused on macro data this week, notably today’s US ADP report and Friday’s non-farm payrolls, seeking more clues on what central banks’ next move will be.

Pierre Veyret– Technical analyst, ActivTrades

 

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