The US dollar is trading almost flat during the early part of Monday’s session, remaining close to the multi-week lows recorded on Friday. As we’ve entered August, traditionally a period of low liquidity, the markets will tend to see its action concentrated around a small number of events. One such moment will be this Friday’s non-farm payrolls, which is expected to condition the Fed’s decision over the timing of the tapering of its asset purchase program. A disappointing number, anything below the 900,000 consensus would be penalising for the dollar, feeding into the dovish narrative recently adopted by some Fed officials, who have been highlighting weaknesses in the labour market as signs that the recovery will need to cover more ground before the tightening of policies can start. On the other hand, a number surprising to the upside would have the opposite effect and be likely to offer strong support to the dollar.
Black gold keeps on trading inside its mid-term bullish channel today despite its failure to clear the $73.85 level last week. The current rebound over the lower band of the bullish channel at $72.30 isn’t reassuring investors as it remains limited compared to the recent 2% correction. Despite a decreasing US dollar providing fresh support to oil markets, investors prefer to remain cautious following the recent rise in tension between Washington and Teheran. That said, a lack of directionality is to be expected on these markets as investors will seek for further clarity before driving prices higher or lower.
Gold continues its slow dance above $1,800, trading inside its mid-term bullish channel despite a recent failure below its last top at $1,833. Even if the bullish trading enthusiasm on stocks would typically impact on the price of safe havens, market sentiment on gold continues to be well supported overall. In fact, this appetite for bullion comes from investors cautiously monitoring the situation in China with the price further supported by a decreasing US Dollar. Technically speaking, the market is trading slightly above its first available support level at $1,808, close to the lower band of its bullish channel with no sign of any immediate bearish break-out.
Pierre Veyret– Technical analyst, ActivTrades
EUROPEAN SHARES
European shares opened higher on Monday, following the global trend after Asian stocks and US Futures edged higher too amid strengthening risk appetite. Today’s market sentiment seems to be mainly boosted by two different drivers, both on the other side of the world: progress towards the $550 billion infrastructure plan in the US, which is expected to pass in the Senate this week, as well as an easing of concerns from China following last week’s Government crackdown on its biggest companies. Meanwhile, even if inflation worries linger, investors continue to welcome solid corporate earnings which will help to sustain market sentiment this summer. Today all eyes are likely to be on the ISM Manufacturing PMI data from the US, prior to Friday’s NFP, as well as today’s earnings from AXA, HSBC and Global Payments.
Pierre Veyret– Technical analyst, ActivTrades
Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
