ActivTrades’ Market Analysts prepared their daily commentary on traditional markets for March 30, 2020. This is not a trading advice. See details below:
FOREX
After several consecutive sessions of gains versus other major currencies, the pound is recording losses during the early part of Monday’s session, having traded at $1.2316, almost 0.9% down against the dollar. The weakness of sterling is a result of the United Kingdom having its credit rating downgraded from AA to AA- by Fitch on Friday. This decision is of course related to the massive undertaking in spending the British government has committed to in order to mitigate the damage from the coronavirus fallout. When combined with that other old chestnut of the UK’s post-Brexit relationship with the EU and the country’s fiscal spending spree is likely to keep the Pound under pressure.
Ricardo Evangelista – Senior Analyst, ActivTrades
GOLD
The new week has started with gold still trading around $1,615-$1,620, more or less the same value as on Friday despite a volatile start which saw the price jump above $1,635 in very early trading. The fact that the price was unable to hold above $1,630 confirms that investors are in a “wait and see” mode with the sideways movement of the last 5 days between $1,595 and $1,640 continues. For now, the huge amount of liquidity that the Fed is going to send into the markets has been unable to generate further gold rallies, but the scenario could quickly change.
Carlo Alberto De Casa – Chief analyst, ActivTrades
The weakness of stock markets is adding further bearish pressure on the oil price, with the WTI benchmark again approaching the psychological threshold of $20. Markets are now betting that the crisis could be relatively long, and the barrel is the perfect asset to be shorted by traders. From a technical point of view, the price is now dancing between the significant figure of $20 and the support at $20.50, which is the bottom reached in the last few weeks. A clear fall below $20 would open space for further declines amid this massively bearish trend.
Carlo Alberto De Casa – Chief analyst, ActivTrades
EUROPEAN SHARES
European shares drifted lower on Monday, despite bullish moves in before the market opened on the back of another set of stimulus moves from Asia. Market volatility isn’t as extreme as what the levels it has reached over the past few weeks but still remains unusually high. That said most indices are now getting starting to stabilize with markets around the world consolidating towards the tops of their bullish retracement reached last week amid a belief that the bottom may be behind us now. On the other hand, the deteriorating health situation continues to have a serious impact on investors’ exposure to risk assets. Some portfolio managers think it will take a long time for the situation to get back to normal with reversal in the trend reversal expected until a vaccine is successfully created.
The IBEX-35 from Madrid is the worst performer so far with the price trading below 6,600pts. The 34-day moving average has reversed and now plays a resistance role in a market already heading for the lower band of its short-term bullish channel. A break-out below 6,345pts could extend the current slump to 5,875pts with 5,500pts and then 5,120pts the key levels afterwards.
