ActivTrades’ Market Analysts have prepared for Leaprate their daily commentary on traditional markets for June 18, 2019. See details below:
FOREX
Trading at yearly lows to the Dollar, just above $1.25, the Pound is under pressure. Another would be potential Tory leader and future Prime Minister pulled out from the race and vowed to support Boris Johnson, as the next leader of the party and country. In the meantime, Mr. Johnson keeps repeating that a no deal Brexit will occur on the 31st October unless the EU agrees to his demands. This is worrying for the markets, a no deal scenario is widely seen as the most negative scenario for the economy. That is the reason why investors are turning their backs to Sterling, causing a depreciation in relation to other currencies.
Ricardo Evangelista – Senior Analyst, ActivTrades
EUROPEAN SHARES
Today’s landscape is getting darker for European stocks. Regional benchmarks drifted lower alongside U.S. futures, following another negative session in Asia. The risk-off mood has been built by investors who want to stay cautious ahead of the next FED meeting, reducing portfolios exposure and taking some profit. Furthermore, this sentiment has been boosted overnight by rising geopolitical tensions after the U.S. were said to be sending more troops to the Middle East due to the Iranian threat, according to officials.
Investors fear that another military conflict with Iran could have a strong impact on oil prices and, mechanically, on the stock market. In addition, an escalation of the dispute could also involve more nations, like Russia, which could put European oil supply at risk. The Stoxx-50 index fell today even though the bulls are currently defending the 3,365.0pts price level. Volatility is likely to be on the rise as investors will be paying attention to significant economic data expected from both EU and the U.S.
Pierre Veyret– Technical analyst, ActivTrades
GOLD
Gold is testing again the key resistance placed at $1,350/1,360. The recovery seen after the fall to $1,330/1,335 of yesterday is witnessing the strength of the bullish movement, as investors continue to bet on a dovish Federal Reserve in the next few months. It is now clear that all eyes are on the FOMC: one rate cut in 2019 seems to be already priced, if we had two or more, this could definitely lift gold price.
From a technical point of view, short sellers are now struggling, while the positive movement could get further fuel if prices can surpass the resistance level of $1,350/1,360.
Carlo Alberto De Casa – Chief analyst, ActivTrades