ActivTrades’ Market Analysts prepared their daily commentary on traditional markets for February 13, 2020. This is not a trading advice. See details below:
FOREX
The euro sunk to its lowest in 2½ years against the dollar during the early part of Thursday’s session, following the publication of December eurozone industrial production output data, which came in below expectations and pointed to the sharpest decline in over 10 years. At the same time China authorities published fresh figures for the number of infected with the coronavirus, using a new methodology which added 15,000 new cases overnight, sending shivers down the spine of investors and changing the mood of the markets to a more risk off stance. Currency traders fear that Europe may see its economic woes amplified by the impact of the coronavirus, whose global spread appears to be increasingly likely.
Ricardo Evangelista – Senior Analyst, ActivTrades
GOLD
Investors’ appetite for gold remains high. Despite the strength of the greenback, bullion was not showing any weakness and the price is taking advantage of stock markets in red to recover and approach the resistance level of $1,575. In contrast to oil, the price remains in a long-term bullish trend and if we see a sustained return of risk-off on markets there could easily be space for a further rally. Vice versa, a fall below $1,550 would denote weakness of the yellow metal.
Carlo Alberto De Casa – Chief analyst, ActivTrades
OIL
WTI price is attempting to rebound and managed to reach $52 yesterday, before slowing down to $51 today. The new calculation of the number of people infected by the coronavirus pushed stocks into red, with the optimism seen in the last few days slowing down and oil confirming its weak scenario of the last few weeks. Technically there is a strong support zone between $49.50 and $50, which has stopped the decline of prices in recent trading sessions, but at this stage the barrel is not finding sufficient strength to overcome the bearish trend.
A clear break out above $52.10 would represent a fist positive signal, while for a proper inversion, we would need to wait for a recovery to $54 at least.
Carlo Alberto De Casa – Chief analyst, ActivTrades
EUROPEAN SHARES
European markets slid lower on Thursday while safe havens surged as renewed concern about the spread of the coronavirus reversed recent positive market sentiment. A revision to the counting process resulted in 15,000 new cases being reported in the Chinese province of Hubei, the epicentre of the virus outbreak. This significantly increased the total number of infected people and undermined yesterday’s reassuring data in which the spread of the virus appeared to be slowing. This is seen, by investors and short-term traders, as the perfect occasion to reduce their exposure and take some profits after stock markets hit fresh record highs yesterday.
However, today’s market correction may also be short-lived as the revised counting process in China, despite adding 15,000 new cases, doesn’t necessarily mean the virus isn’t actually still spread slower. Retailers and financials are currently among the worst performers in Europe with equities such as Nestle, Credit Suisse and Barclays driving the Stoxx-600 lower.
All European benchmarks are trading in red territory today with the IBEX-35 in Madrid the worst performer. The market opened with a strong bearish gap below 9,900pts this morning and continues to sink towards its bullish trend line with a first available support zone located between 9,840pts and 9,850pts. The 21-period exponential moving average has already reversed and now fulfils a resistance role to the market. In the meantime, investors will keep an eye on today’s US CPI due later today as well as earning reports from giants such as Alibaba and Airbus.
IBEX-35 index chart
Pierre Veyret– Technical analyst, ActivTrades