ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for August 12, 2019. See details below:
FOREX
The Japanese Yen continues to gain ground against other major currencies, noticeably to the American Dollar, currently trading just above the 105 level, having dropped from highs of 109 at the beginning of the month. This is of course the result of heightened trade tensions between the US and China. The Japanese currency is seen as a safe haven asset and is traditionally sought after during times of increased uncertainty. We can therefore see the rise of the Yen as an indication that the markets are taking the threats posed to the future growth of the global economy, by an escalating trading conflict between the two global economic superpowers, very seriously indeed.
Ricardo Evangelista – Senior Analyst, ActivTrades
EUROPEAN SHARES
Equities are moving higher in Europe this morning following gains registered by Asian benchmarks overnights. Traders are still weighing trade tensions following the last comments on the topic from President Trump who said at the end of last week that the September talks could be “cancelled” before adding that “the U.S. is doing very good but is not ready to make a deal with China”. These words have paradoxically boosted market sentiment this morning as they lifted expectations for further central bank easing as investors hope the FED will sustain the economy if the dispute keeps deepening between the two blocs.
Traders‘ attention is likely to be drawn to economic data this week with the highly anticipated U.S. CPI release on Tuesday, one of the most observed data by the FOMC, as well as the German ZEW Economic sentiment in Europe. For now, European benchmarks still struggle to get a clear direction despite bullish moves in early trading. The stoxx-50 index will have to clear the 3,365.0pts level before heading to the next resistance located at 3,375.0pts.
The DAX-30 index shows a similar configuration as prices continue to flirt with the strong technical level of 11,800.0pts. The best performance is that of the French CAC-40 index, which went back to the 5,385.0pts zone shortly after the opening bell. A clearing of this zone could potentially drive prices higher to 5,430.0pts whereas a fall below 5,385.0pts is likely to take the market back to 5,320.0pts.
French CAC-40 index
Pierre Veyret– Technical analyst, ActivTrades
OIL
Oil is failing to find strength to continue the recovery seen in the final part of last week as fears of a slowdown in global economic growth are still weighing on the market. Investors are considering as real the risks of weaker demand, with the possibility of a productive surplus in the upcoming months, despite the OPEC cuts. From a technical point of view, we could consider the recovery from $51 to $54 as a physiological rebound, while this move so far does not have yet the strength of a proper inversion.
Oil chart
Carlo Alberto De Casa – Chief Analyst, ActivTrades