ActivTrades’ Market Analysts have prepared for Leaprate their daily commentary on traditional markets for May 7, 2019.
Forex
The US Dollar continues to slowly depreciate against other major currencies, as it becomes increasingly likely that new tariffs will be imposed on Chinese imports by this Friday. The Dollar Index is down on the day by 0.1%, as many see the potential for an escalation in trade tensions as a scenario that will make a rate cut by the Federal Reserve more likely, therefore representing downside risk for the Greenback.
Ricardo Evangelista – Senior Analyst, ActivTrades
Gold
Gold is attempting a rebound but so far the bullish movement is struggling to find strength as prices have been unable to break up the first resistance placed at $1,288, and are continuing the slow dance at $1,280. We would have a first positive signal if prices jumped above this threshold, with space for a quick rally to $1,300. Despite this, in the last 3 months we have seen decreasing tops and decreasing lows, which are suggesting a declining investor interest in gold. If bullion were able to break up this negative trendline, there are growing chances of a switch in investor mood.
Carlo Alberto De Casa – Chief Analyst, ActivTrades
European Shares
Stocks opened lower in Europe this morning but pared most of the losses in early trading. This trend reversal has been observed on European markets after China Vice-Premier Liu He confirmed he will be part of the Chinese delegation going to the US at the end of the week, to continue trade talks with Washington. Even if this information brought a bit of relief to traders, investor sentiment remains weak and the next round of talks will be closely watched.
The U.K is entering into a very special day as Prime Minister Theresa May will meet opposition leader Jeremy Corbyn in order to decide whether it is possible to reach a Brexit deal. This is a very important meeting as the failure to reach an agreement between Tory and Labour could increase the chances of a 2nd referendum or even a new general election, bringing more uncertainty to UK markets and businesses.
Technically speaking, the stoxx-50 index is trading sideways between 3,425.0pts and 3,400.0pts. The DAX-30 has cleared its 12,270.0pts short-term resistance, trading above 12,300.0pts currently. The SMI-Index in Geneva has almost managed to close yesterday’s bearish gap as prices are now challenging the 9,655.0pts resistance. (Please find gold chart attached)
Pierre Veyret– Technical analyst, ActivTrades