ActivTrades’ Market Analysts prepared their daily commentary on traditional markets for January 29, 2020. This is not a trading advice. See details below:
FOREX
The US dollar is strengthening against other major currencies, as illustrated by the US Dollar Index, which is up by roughly 0.1% during early Wednesday trading. Judging by the greenback’s performance it is clear that investors don’t expect the US Federal Reserve to deliver any surprises at their January meeting, which occurs later today, with the general consensus that the Fed will keep interest rates unchanged. The US economy continues to display signs of vitality with the latest survey of US consumer confidence showing its highest reading since August 2019.
Ricardo Evangelista – Senior Analyst, ActivTrades
OIL
The return of the risk-on scenario has lifted oil with the price also strongly supported by a surprising draw on inventories announced by the EIA yesterday. The price rebounded just before reaching the support level at $51.50 and could now target the resistance level at $54.80-$55. From a technical point of view, it is now crucial to understand the strength of the current movement: investors are still concerned by the Chinese flu coronavirus and trying to correctly price the impact that this pandemic virus could have on the long-term demand. Despite this, there is again growing interest in black gold.
Carlo Alberto De Casa – Chief analyst, ActivTrades
EUROPEAN SHARES
Share markets climbed almost everywhere this morning, extending yesterday’s gains, with market sentiment improving ahead of today’s FOMC meeting in the US. The “risk-on” mood seems to be back on track with investors focusing on yesterday’s positive US data as well as Apple’s solid results despite disruption caused by the deadly coronavirus.
The Federal Reserve is highly expected to maintain rates at their current level, marking a pause to the recent dovish moves from Jerome Powell and providing a positive message about the soundness of the US economy to investors. This set of good news (data + earnings) provides further proof of a global growth recovery and offset fears sparked by the near-term risk of the virus in China spreading. Banking and mining shares are the best performers so far in Europe with Santander and Vinci the top movers in the Euro Stoxx 50.
The IBEX-35 Index in Madrid is at the top of the European board today with the market having closed the bearish gap opened at the beginning of the week. Prices are now challenging the 9,550pts resistance level, which is the first mark before the major one located below 9,640pts, which can only be breached if the market clears its short-term bearish trendline.
IBEX-35 Index chart
Pierre Veyret– Technical analyst, ActivTrades