The Euro is on the fourth consecutive day of gains against the dollar, touching a more than 2% weekly increase versus the greenback during early trading on Friday. The single currency’s appeal derives from improved market sentiment, triggered by hopes of a quick economic turnaround as the major economies progressively end lockdowns. But, greater risk appetite is not the only reason why there is a smile on the faces of euro traders; the European recovery fund is perhaps the real spring behind the rise of the single currency, as it offers hope of a more functional future for the European Union and specially for the euro.
EURUSD
Ricardo Evangelista – Senior Analyst, ActivTrades
GOLD
Gold has entered a consolidation phase. After the recovery to $1,720, the spot price has been unable to make further gains despite the weakening of the US dollar, which generally represents a positive element for bullion. The spot price seems to have found a temporary equilibrium between $1,700 and $1,750, while investors are waiting for further direction.
The weakening of physical demand seen in the last few months in Asia has been compensated by the surge of investment demand in the USA and Europe, pulled up by dovish central bank decisions and expectations for further expansive monetary policies in the next 12 months.
Carlo Alberto De Casa – Chief analyst, ActivTrades
Shares opened lower throughout Europe as uncertainty rises ahead of what may prove to be an eventful day. Even if simmering Sino-US tensions are nothing new to investors, the relationship between the two blocs has now become the biggest source of uncertainty to markets. President Trump is set to hold a press conference later where he is expected to lay out the US response to China’s stance in Hong Kong. This has sparked fresh concern for investors, who fear a further escalation in tension between the two nations will put the phase one trade deal, as well as any future political or economic relationship, at risk. Investors will be hoping for clues as to the next move by the Federal Reserve when Jerome Powell as the FED’s chairman, is expected to participate in a virtual discussion today. Having said that, it is not surprising investors wanted to secure part of this week’s rally by taking some profit, ahead of today’s important news.
The DAX-30 index has registered the worst performance in Europe so far even if the market remains above 11,600 pts. Technically, today’s bearish move doesn’t really threaten the underlying bullish trend and may be a simple correction, the next target remains at 12,145 pts. However, a break-out of the 11,530 pts short-term support level today could lead the market to a deeper corrective move towards 11,230 pts and 10,965 pts.
