Market Analysis

The US dollar is gaining ground

FOREX

The US dollar is gaining ground in relation to its peers during early Monday trading, as investors react to fears that inflation will follow the post-pandemic rebound in economic activity. The approval of the $1.9 trillion American Rescue Plan by the US senate over the weekend, alongside the much better than expected job numbers published on Friday, suggests the recovery will be faster than previously expected. The prospect of a sudden rise in inflation is scaring investors into selling bonds and causing yields to rise, making it more expensive to hold short dollar positions.

Ricardo Evangelista – Senior Analyst, ActivTrades

Source: ActivTrader 

 

GOLD

A new week may have started for financial markets, but nothing seems to have changed for gold. Bullion remains weak, unable to rebound above $1,700, with the main topics on the table, fears over inflation and the recovery of US bond yields, are still the same. The strength of the greenback is making any recovery for gold more difficult while the technical scenario is still weak.

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

OIL

Oil is continuing its triumphant march with Brent reaching the $70 threshold, before slipping back to $69.50. Although the outlook remains bullish, we should expect some profit taking as technical indicators are showing the commodity as overbought. Also after Brent opened the week with a large gap to Friday’s close, closing in on $71, it then slowed down significantly, showing that the rally needs a pause for consolidation. The scenario is similar for WTI.

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

EUROPEAN SHARES 
The new week brings new hopes on stock markets despite a mixed picture on global shares with EU stocks opening higher while US futures extended last week’s losses. Lingering concerns about mounting inflation and the bond market sell-off combined with the majority of bullish catalysts having already priced in the recovery are proving major short-term obstacles to an extended rally and a perfect occasion for traders to take some profits. However, investors remain globally confident about the medium-term outlook and will closely follow this week’s macro news with both the EIA crude oil inventory report and the US CPI for February out on Wednesday, while the ECB will hold its highly awaited monetary policy meeting on Thursday, where the semantics of Christine Lagarde’s speech will be carefully scrutinised in the hope of gaining more clues on what the central bank’s next move will be.

The DAX-30 Index is trading well above 14,000pts, with the resistance levels at 14,075pts and 14,140pts in sight.

Pierre Veyret– Technical analyst, ActivTrades

 

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