ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for January 24, 2020. This is not a trading advice. See details below:
FOREX
The euro is showing weakness in the aftermath of yesterday’s ECB meeting, currently trading at $1.1050, after losing 0.4% to the US dollar over the last 24 hours. If some investors harboured hopes that the voices within the ECB advocating for less accommodative policies would be heard, they were surely disappointed after Christine Lagarde delivered her speech. The president of the ECB made it clear, there will be no change in direction in the near future, reaffirming the need for a highly accommodative monetary policy. The risk for the single currency continues to be very much to the downside.
Ricardo Evangelista – Senior Analyst, ActivTrades
OIL
In the last few days the oil price has suffered, with 4 consecutive trading sessions in red as investors are seeing growing chances – again – of oversupply for the next few months, particularly with US inventories rising earlier this week. Moreover, there is some anxiety for the possible impact from Chinese flu, even if at this stage we cannot understand how this fear is justified and how it will impact on oil demand. Technically, the fall below $58 can be seen as a negative signal, with price now finding a support zone at $55 and is trying to rebound – without a lot of strength – after a negative week.
Carlo Alberto De Casa – Chief analyst, ActivTrades
EUROPEAN SHARES
European equities are trading significantly higher today with all the region’s benchmarks in green territory, offsetting losses registered earlier this week. The trend seems to be global as Asian shares rose overnight, except in China where markets remain closed, and US futures point to a solid open. This renewed appetite for risky assets has been driven by investors welcoming the set of measures from China where the government has locked down 30m people to prevent the coronavirus from spreading as the death toll continues to rise.
Furthermore, stock prices have also been boosted by the latest dovish words from ECB Chairman Lagarde who kept rates unchanged but also said that although inflation inside eurozone has ticked up slightly, it isn’t enough to change the current accommodative monetary policy. The volatility remains low on EU stocks as investors are cautious with benchmarks trading close to their all-time highs.
However, the batch of recent reassuring data pointing to a global growth recovery combined with the current solid earnings reports from companies should give a further boost to market sentiment. Banking and miners are among the top movers in Europe today with shares from these sectors driving benchmarks higher.
The best performance comes from Frankfurt as the DAX-30 Index is now trading close to 13,600pts following a solid rebound above 13,485pts in early trading. The next upward targets after 13,600pts are near 13,635pts and 13,705pts by extension.
DAX-30 Index chart
Pierre Veyret– Technical analyst, ActivTrades