ActivTrades’ Market Analysts have prepared for Leaprate their daily commentary on traditional markets for June 25, 2019. See details below:
FOREX
The US Dollar continues to lose terrain against other major currencies, under pressure from a cocktail of circumstances. These include: an expected interest rate cut from the Fed, which could arrive as early as July; lingering trade tensions between the US and China, which make it more likely that the Fed will cut rates; geopolitical tension in the Middle-East, potentially a threat to trade and the growth of the global economy and therefore another incentive to the Federal Reserve to initiate a new cycle of monetary easing.
Ricardo Evangelista – Senior Analyst, ActivTrades
GOLD
Gold is hitting new highs as the demand for bullions is surging on growing tensions between the US and Iran, while markets are still betting on a dovish Federal Reserve in the next few months. The weakness of the greenback, with EUR/USD traded just below 1.14, remains another supportive element for the precious metal.
Carlo Alberto De Casa – Chief Analyst, ActivTrades
OIL
Oil is consolidating above $57 (WTI), after the +10% achieved last week. From a technical point of view prices remains well settled, with a potential target of $58.5 and after that $60. Geopolitical tensions and expectations for a dovish Fed are the two main elements supporting the recovery of the barrel in this scenario.
Carlo Alberto De Casa – Chief Analyst, ActivTrades
EUROPEAN SHARES
Equities are drifting lower almost everywhere around the globe today as investors fear a geopolitical escalation ahead of the G-20 summit. The recent bearish leverage coming from the U.S. / Iran dispute continue to weigh on assets perceived as riskier after President Trump implemented a new set of major sanctions on Iran on Monday evening.
Investors were not reassured by Tehran’s reply as the government said it will not engage in any talks with Washington as long as these sanctions are in place. In addition, investors are also worried by a possible intervention of Russia after the nation’s deputy foreign minister said the government and its allies will counteract U.S. sanctions on Iran, escalating the dispute further. For now, the mood on markets has turned more prudential as investors look for safer assets like gold, the Swiss Franc and the Japanese Yen to weather volatility spikes on stocks.
Equities are likely to be volatile and not very directional prior to the next G-20 as investors await more details on the evolution of trade dispute with China to decide whether to increase their exposure to this market or not. The Stoxx-600 index is trading lower, like every benchmarks of the old continent, with all sectors down. However, the 3,425.0pts price level on the Stoxx-50 index as well as 12,200/12,205.0pts zone on the DAX-30 are well defended by bulls, meaning the current bullish trend may not be over.
Pierre Veyret– Technical analyst, ActivTrades