FOREX
The US Dollar Index touched its lowest in more than 2 years, at 93.335, during early Wednesday trading. It is interesting to notice the weakness of the greenback against both risk and safe haven currencies, denoting investors’ concerns over the ability of the American economy to bounce back. On Tuesday, some of the worst affected states published record numbers of deaths caused by COVID.
Meanwhile political uncertainty hangs over the US Senate, with lawmakers divided over the size and structure of a new relief package, which may lead to delays in its deployment. Amidst this scenario, the Fed will conclude its July meeting later today, with most observers expecting the continuation of the dovish stance that has characterised the American central bank over the last few months. Looks like all the stars are aligned and there may be further downside risk ahead for the US dollar.
Ricardo Evangelista – Senior Analyst, ActivTrades
GOLD
In the last 24 hours, we’ve seen the gold price achieve its highest ever level, drop dramatically before recovering. Probably, the most important thing is that gold has shown a strong reaction after yesterday’s decline to the key level of $1,900.
The price is now testing the resistance at $1,950. A new acceleration above $1,960 could open space for another rally to $2,000, while a fall below yesterday’s bottom would put gold in a dangerous situation. The quick fall seen yesterday helped technical indicators to recover from being in hyper-bought territory, while the price seems to be in a consolidation phase after the long rally.
Carlo Alberto De Casa – Chief analyst, ActivTrades
