ActivTrades’ Market Analysts prepared their daily commentary on traditional markets for February 17, 2020. This is not a trading advice. See details below:
FOREX
The big foreign exchange news of the day concerns the euro and its performance against the dollar. During the early Monday session the single currency gained almost 0.1% against the greenback. It may not sound like much, but considering how much of a battering the euro has been taking from investors over concerns the impact the coronavirus may have over European exports to China as well as lacklustre performances from the German and Italian economies, today’s modest gains stand out, when you consider that the euro has lost almost 2.5% against the dollar since the start of the month.
Ricardo Evangelista – Senior Analyst, ActivTrades
GOLD
Gold started the week with a modest decline, with the price playing with the $1,580 level. The main trend remains positive but for further rallies we would need some fresh impetus, as stock markets are still in a risk on scenario, with many indices at historical highs, while the US dollar remains strong. These two factors make further recoveries for bullion more complicated, given the scenario where markets are still pricing the impact of coronavirus on economy as relatively modest. The first resistance is now placed at $1,585, followed by $1,592 and by the psychological threshold of $1,600.
Carlo Alberto De Casa – Chief analyst, ActivTrades
EUROPEAN SHARES
European markets edged higher on Monday, following a mixed trading session in Asia where shares erased last week’s losses in China but tumbled in Tokyo. All of the European benchmarks followed the trend set overnight by Chinese shares after the nation unveiled a new set of measures in the fight against the coronavirus. These new measures included increasing financial flexibility across the country after the central bank lower rates and the government planned to cut corporate taxes and fees.
This news was very well received by investors who are already bracing for an extended rally on the back of a quick recovery of the Chinese economy allied to these stimulus measures and this could present a real upside risk for markets. In addition, traders also welcomed the fact that the number of new daily cases of coronavirus is trending lower. This positive sentiment comes on what is likely to be a quiet trading day in the US with markets shut for Presidents Day.
Most sectors of the Stoxx-50 Index are trading higher today with the Index continuing to flirt with its record high. Prices are now heading to 3,860pts following two rebounds on both 3,800pts and 3,830pts. These moves confirmed bull traders have the upper hand currently.
Stoxx-50 Index chart
Pierre Veyret– Technical analyst, ActivTrades