Archive for Financial News – Page 3

Week in review: Gold tops $1800, Pound smiles while Dollar slips

By Lukman Otunuga, Research Analyst, ForexTime

The trading week kicked off on a risk-on note despite coronavirus cases rising across the globe.

Equity markets in Asia, Europe and the United States rallied, even as the World Health Organization (WHO) reported a one-day high for global coronavirus cases. Investors who were searching for a negative correlation between stock markets and Covid-19 infections were left empty handed after riskier assets gained across the board.

On our weekly technical outlook, we discussed the possibility of the Dollar extending losses, Euro gaining ground and Gold hitting $1800. As the mood improved on growth optimism, the Japanese Yen and other safe-haven assets came under fire.

Mid-week the Reserve Bank of Australia was under the spotlight, with the Australian Dollar weakening after the central bank left interest rates unchanged at the record low of 0.25%. Much attention was directed towards the Euro on Wednesday thanks to lacklustre economic data warnings from the European Commission.

The momentum witnessed across stock markets showed no signs slowing on Thursday despite a record daily increase in US COVID-19 infections and sharp rise in deaths. However, Gold found ample support from this negative development, surging to levels not seen in 9 years above $1800.

Given how US earnings season kicks off next week, more volatility across financial markets is certainly on the cards.

Dollar Index drifts lower.

King Dollar looks tired and slightly defeated on the daily charts. Prices are struggling to push back above 97.15. Sustained weakness below this point may open the doors towards 96.00.

 

 

Euro remains choppy 

The Euro’s movement against the Dollar was choppy, rough and rocky this week. A breakdown below 1.1270 could open the doors towards 1.1200. If 1.1270 proves to be reliable support, prices may rebound towards 1.1360.

 

 

Pound pushes higher 

Sterling has appreciated against every single G10 currency this week. GBPUSD bulls are greedily eying the 1.2750 level. With the 50 SMA on the cusp of crossing above the 100 SMA, the technical remain in favour of bulls.

 

 

USDJPY breakdown setup in play

The USDJPY has broken below the 107.00 support level. A weekly close below this point may open a path towards 105.90.

 

 

Commodity spotlight – Gold 

After charging to levels not seen in nine years, Gold may experience a technical correction back towards the $1780-$1765 regions before bulls gather fresh momentum. Although prices have cut through the psychological $1800 level like a hot knife through butter, a weekly close below this point could trigger a much-needed correction.

 

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Gold Hits 9 Year Highs As USD Sinks

By Orbex

Gold

The yellow metal has seen a strong rally this week with price breaking out to fresh 2020 highs.

The move comes despite equities remaining near recent highs and is primarily driven by the sell-off in the US dollar.

The greenback has come under renewed selling pressure this week amidst growing fears of a second wave of COVID-19. Currently, over 40 states are reporting new highs in infection numbers.

The US has come under widespread criticism for its handling of the virus. Some states are needing to reintroduce lockdown measures to combat a fresh outbreak of the virus.

US unemployment claims on Thursday came in lower than expected. This suggests that the post-lockdown recovery in the economy is continuing this month.

The June jobs report highlighted record growth in employment with nearly 5 million jobs added last month. However, the prospect of further lockdowns is weighing on USD, keeping gold prices supported as traders move back into the safe-haven on a larger scale.

Gold Hits Highest levels Since 2011

Gold price broke out above the 1795.66 level this week, trading back up to their highest level since 2011. While price holds above here, the next level to watch is the 2011 closing high of 1823.25.

As price continues to move higher within the rising wedge pattern, traders should keep an eye on the RSI indicator as any bearish divergence could highlight a potential reversal lower.

Silver

Silver prices have been well supported this week amidst a perfect combination of higher equities prices, higher gold prices, and a lower US dollar.

With USD likely to remain under pressure in the near term, the outlook remains bullish for silver. Recent industrial data sets have helped support silver as manufacturing continues to recover, reinforcing the view of a demand recovery for silver.

However, this view could change if the virus in the US causes further lockdowns.

Tensions between the US and China could also pose downside risks for silver if hostilities lead to a breakdown in trade negotiations. Prices were heavily weighed down by the two-year US/China trade war which decimated demand levels in silver.

Silver Approaching 2019 Highs

Silver prices have broken out above the bearish trend line and the 18.83 level this week. While price remains above the broken trend line, focus remains on a further grind higher.

The 2019 highs of 19.62 are the next upside area to watch. Should price break back below the trend line, the 17.42 level is the main support to note ahead of deeper support at the 16.53 level.

By Orbex

Is Europe At Risk Of A Tax Increase?

By Orbex

European governments are spending unprecedented levels of money on COVID relief. Therefore, it’s only natural to wonder: how is this going to be paid for?

Germany might have the fiscal latitude to adjust its budget to address the issue. But what about countries like Italy, or France, which were already above EU debt guidelines?

The shutdown makes things more complicated for government finances. And not just because of the increased spending. In fact, since when has a government actually reduced its spending once given the opportunity to spend, anyway?

The economic fallout means that governments are expected to collect less revenue in taxes. And then there are countries, like Italy, they’re considering cutting taxes to stimulate the economy.

Where’s the Money Coming From?

A closer look at the much-vaunted “Next Generation EU” program that promises €750B in spending on the part of the central EU government, can give us some insight.

The EU plans to raise those funds on capital markets, and will then have to pay them back. From where? The EU doesn’t collect taxes. Its members contribute in order to finance it.

In the second part of the agreement, there are some mentions of how to pay it off. They include increasing fees from the Emissions Trading System, and carbon border adjustment fees.

But the agreement also provides provision for a digital tax on companies making over €750M a year, and taxes on companies that “draw huge benefits from the EU single market”.

The document says these new sources of revenue “may” pay off the debt. However, it doesn’t say the sources will be terminated once the debt is paid off.

Effectively, this creates two new income streams for the EU.

But We Don’t Want to Talk About That Now

Just yesterday, the ECB’s Villeroy said that France should aim to stabilize taxes, not raise or lower them.

Business Minister of Ireland Varadkar urged for cuts to business taxes. Last week Italian PM Conte insisted on tax cuts for middle-income earners in Italy.

At least publicly on a national level, government officials are pushing to cut taxes to help the economy overcome COVID.

Perhaps the increase in spending at the EU level, plus new EU sources of revenue, is a way for national governments to “endorse” the collection of unpopular taxes to the EU.

This Isn’t Exactly New

The EU wanting to implement a digital tax and increase carbon emissions costs has been a present issue for nearly a decade at this point.

The need to pay down increased debt might offer an opportunity to finally pass those measures.

National governments cutting some of the taxes for a limited period of time might offset the tax burden of introducing the measures on the EU level. But any tax cuts national governments implement now will likely last only the duration of the coronavirus emergency, by which time EU-level taxes will be firmly established.

By Orbex

Forex Technical Analysis & Forecast 10.07.2020

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

After completing the ascending wave at 1.1370 and the descending structure towards 1.1300, EURUSD has formed the consolidation range around the latter level and broken it to the downside. Possibly, the pair may form a new descending structure to reach 1.1250 and then resume trading upwards with the target at 1.1300.

EURUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

GBPUSD, “Great Britain Pound vs US Dollar”

After finishing the ascending wave at 1.2668, GBPUSD has completed the descending impulse towards 1.2600; right now. it is consolidating around the latter level. Possibly, today the pair may fall to reach 1.2575 and then return to 1.2600. If later the price breaks this range to the upside, the market may correct towards 1.2640; if to the downside – start a new decline with the target at 1.2530.

GBPUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDRUB, “US Dollar vs Russian Ruble”

USDRUB is still trading around 71.01. Today, the pair may fall to break 70.10 and then continue trading downwards to reach 69.60. However, an alternative scenario suggests that the market may form one more ascending correction with the target at 71.60.

USDRUB
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDJPY, “US Dollar vs Japanese Yen”

USDJPY has finished the descending wave at 106.99; right now, it is consolidating around this level. If later the price breaks this range to the upside, the market may correct towards 107.40; if to the downside – resume trading inside the downtrend with the target at 106.60.

USDJPY
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDCHF, “US Dollar vs Swiss Franc”

After forming the consolidation range around 0.9380 and breaking it to the upside, USDCHF is expected to continue growing towards 0.9440. After that, the instrument may resume trading inside the downtrend with the target at 0.9400.

USDCHF
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

AUDUSD, “Australian Dollar vs US Dollar”

After completing the descending wave at 0.6939, AUDUSD is expected to consolidate around this level. Later, the market may break the range to the upside and start another correction towards 0.6969 or even 0.7004.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

BRENT

Brent has finished the descending wave at 42.32. Today, the asset may form a new descending structure towards 41.90 and then consolidate around it. After that, the instrument may break the range to the upside and resume moving upwards with the target at 43.00 or even 43.90.

BRENT
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

XAUUSD, “Gold vs US Dollar”

After falling and reaching 1800.00, Gold is consolidating around it. If later the price breaks this range to the upside, the market may correct towards 1809.90 and then resume trading downwards to break 1785.00. The short-term target is at 1775.55.

GOLD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

BTCUSD, “Bitcoin vs US Dollar”

BTCUSD is falling towards 9099.00. Later, the market may form one more ascending structure to reach 9260.00 and then start a new decline with the target at 9059.00.

BITCOIN
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

S&P 500

After completing the descending structure at 3118.5 and returning to 3160.6, the Index is expected to consolidate between these two levels. If later the price breaks this range to the upside, the market may form one more ascending structure towards 3240.5; if to the downside – resume trading downwards with the target at 3072.2.

S&P 500

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Fibonacci Retracements Analysis 10.07.2020 (BITCOIN, ETHEREUM)

Article By RoboForex.com

BTCUSD, “Bitcoin vs US Dollar”

The daily chart has been showing the same technical picture for over a month. After rebounding from the 23.6% fibo, Bitcoin has failed to reach the high at 10368.450. in the nearest future, the asset is expected to re-test 23.6% fibo and then resume falling towards 38.2%, 50.0%, and 61.8% fibo at 7907.00, 7150.00, and 6390.00 respectively.

BTCUSD_D1
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

As we can see in the H1 chart, after rebounding from the mid-term 23.6% fibo, the pair has corrected its previous decline by 38.2% and may continue moving towards 50.0% fibo at 9590.00. However, the decline has already reached 50.0% fibo and may continue towards 61.8% and 76.0% fibo at 9064.00 and 8927.10 respectively and then the low at 8814.20.

BTCUSD_H1
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

ETHUSD, “Ethereum vs. US Dollar”

As we can see in the H4 chart, Ethereum is still moving between 23.6% fibo and the high at 214.90 and 253.47 respectively. If the price breaks the high, it may reach the fractal high at 288.98. However, if the asset breaks 23.6% fibo, it may continue trading downwards to reach 38.2% and 50.0% fibo at 191.00 and 171.60 respectively.

ETHUSD_H4
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

In the H1 chart, the divergence on MACD made the pair start a new descending wave, which has already reached 38.2% fibo. Later, the market may continue falling towards 50.0%, 61.8%, and 76.0% fibo at 232.30, 228.50, and 223.80 respectively and then the low at 215.90. The resistance is the high at 248.89.

ETHUSD_H1

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

COFFEE Analysis: Lower coffee demand bearish for coffee price

By IFCMarkets

Lower coffee demand bearish for coffee price

The International Coffee Organization (ICO) estimates world exports at 10.49 million bags in June, 14.6% lower than in May 2019. And imports by ICO importing Members and the United States reached 64.22 million bags in the first half of coffee year 2019/20 (Oct/19 to March/20), 3.7% lower than in October 2018 to March 2019. The ICO reported also its composite indicator decreased by 5.2% to an average of 99.05 US cents/lb in June 2020, which is the third consecutive month of decrease. Lower demand as indicated by falling shipments is bearish for coffee.

Indicator VALUE Signal
RSI Neutral
MACD Sell
Donchian Channel Buy
MA(200) Sell
Fractals Sell
Parabolic SAR Sell

 

Summary of technical analysis

Order Sell
Buy stop Below 97.88
Stop loss Above 102.77

Market Analysis provided by IFCMarkets

The Analytical Overview of the Main Currency Pairs on 2020.07.10

by JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.13270
  • Open: 1.12834
  • % chg. over the last day: -0.37
  • Day’s range: 1.12549  – 1.12903
  • 52 wk range: 1.0777  – 1.1494

Demand for risky assets has weakened amid a record number of new COVID-19 cases in the United States. Investors are concerned about possible introduction of new restrictive measures in the United States and other countries. During yesterday’s and today’s trading sessions, the drop in EUR/USD quotes has exceeded 60 points. At the moment, the trading instrument is consolidating in the range of 1.1260-1.1290. The single currency is tending to decline. Positions need to be opened from key support and resistance levels.

The news feed on 2020.07.10:
  • – The US producer price index at 15:30 (GMT+3:00).
EUR/USD

Indicators do not send accurate signals: the price has crossed 100 MA.

The MACD histogram is in the negative zone, indicating the bearish sentiment.

Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which gives a signal to buy EUR/USD.

Trading recommendations
  • Support levels: 1.1260, 1.1220, 1.1195
  • Resistance levels: 1.1290, 1.1305, 1.1330

If the price fixes below the level of 1.1260, a drop in the EUR/USD quotes is expected. The movement is tending to 1.1230-1.1200.

An alternative could be the growth of the EUR/USD currency pair to 1.1310-1.1340.

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.25959
  • Open: 1.26063
  • % chg. over the last day: +0.03
  • Day’s range: 1.25668  – 1.26109
  • 52 wk range: 1.1466  – 1.3516

The GBP/USD currency pair has stabilized after a prolonged rally. The pound sterling is currently consolidating. Local levels of support and resistance are: 1.2570 and 1.2625, respectively. In the near future, the technical correction of GBP/USD quotes is possible. Demand for risky assets has weakened. Positive data on jobless claims provides additional support for the greenback. Positions must be opened from key levels.

The news feed on the UK economy is calm.

GBP/USD

Indicators do not send accurate signals: the price has crossed 50 MA.

The MACD histogram is in the negative zone, which gives a signal to sell GBP/USD.

Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which indicates the bullish sentiment.

Trading recommendations
  • Support levels: 1.2570, 1.2520, 1.2470
  • Resistance levels: 1.2625, 1.2675

If the price fixes below 1.2570, a correction of GBP/USD quotes is expected. The movement is tending to the round level of 1.2500.

An alternative could be the growth of the GBP/USD currency pair to 1.2670-1.2700.

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.35107
  • Open: 1.35872
  • % chg. over the last day: +0.43
  • Day’s range: 1.35752  – 1.36313
  • 52 wk range: 1.2949  – 1.4668

Purchases prevail on the USD/CAD currency pair. During yesterday’s and today’s trading sessions, the growth of quotations has exceeded 100 points. The trading instrument has reached local extremes. Loonie is currently testing the resistance level of 1.3630. The mark of 1.3585 is already a “mirror” support. USD/CAD quotes are tending to grow. We recommend you to pay attention to the dynamics of prices of “black gold”. Positions must be opened from key levels.

At 15:30 (GMT+3:00), a report on the labor market of Canada will be published.

USD/CAD

Indicators point to the power of buyers: the price has fixed above 100 MA.

The MACD histogram is in the positive zone, which gives a signal to buy USD/CAD.

Stochastic Oscillator is near the overbought zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations
  • Support levels: 1.3585, 1.3555, 1.3520
  • Resistance levels: 1.3630, 1.3660, 1.3700

If the price fixes above 1.3630, the USD/CAD quotes are expected to rise. The movement is tending to 1.3660-1.3680.

An alternative could be a decrease in the USD/CAD currency pair to 1.3560-1.3530.

The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 107.262
  • Open: 107.149
  • % chg. over the last day: -0.04
  • Day’s range: 106.806  – 107.264
  • 52 wk range: 101.19  – 112.41

The USD/JPY quotes show a negative trend. The trading instrument has set new local lows. The USD/JPY currency pair has found support at 106.80. The mark of 107.05 is already a “mirror” resistance. Demand for “safe haven” currencies is still high. The yen is tending to grow. We recommend you to pay attention to the dynamics of yield on US government bonds. Positions must be opened from key levels.

The news feed on the Japanese economy is calm.

USD/JPY

Indicators point to the power of sellers: the price has fixed below 50 MA and 100 MA.

The MACD histogram is in the negative zone, indicating the bearish sentiment.

Stochastic Oscillator is in the oversold zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations
  • Support levels: 106.80, 106.50
  • Resistance levels: 107.05, 107.20, 107.35

If the price fixes below 106.80, a further drop in the USD/JPY quotes is expected. The movement is tending to 106.50-106.20.

An alternative could be the growth of the USD/JPY currency pair to 107.20-107.40.

by JustForex

EUR/USD bulls find a short-term make-or-break level around 1.1350

By Admiral Markets

Economic events

Source: Economic Events July 10, 2020 – Admiral Markets’ Forex Calendar

The Euro continued to stabilise against the region around 1.1150/1200, while still aiming at the 1.1300 mark, as such a sustainable break higher levels the path up to 1.1400/50 and possibly even higher.

Technically, we consider the region around 1.1350 to be the “make-or-break” level, where a sustainable break higher could deliver the fuel for a stint up to the region around the current yearly highs.

But the question is: “What could ignite such a bullish stint and break higher?”, especially given the quite thin economic calendar for the weekly close and the near-future?

Our main focus remains on the developments in 10-year US yields, as they near the important support region around 0.60%, and a break lower would not only drive Gold higher, but also the USD lower (thus pushing EUR/USD higher).

As already pointed out in our last on Gold last Wednesday, the shrinking Fed balance sheet resulting out of a continuing decline in demand for the US central bank’s USD swap lines from foreign central banks like the ECB, BoJ or BoE while rather sooner than later reverse again and thus result in pressure on US yields and on the US dollar again.

Therefore, we should keep a close eye on developments in Equity markets, where rising volatility could trigger such an expansive monetary policy approach from the Fed among market participants.

While short-term a break above 1.1350 brings the focus on the region around 1.1400/50, the broader picture and break above leaves EUR/USD with bullish potential up to the region around 1.1700/1.1800, while only a drop below 1.1150 could trigger a deeper correction with a target around 1.1000:

EUR/USD daily chart

Source: Admiral Markets MT5 with MT5-SE Add-on EUR/USD Daily chart (between May 10, 2019, to July 9, 2020). Accessed: July 9, 2020, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of the EUR/USD fell by 10.2%, in 2016, it fell by 3.2%, in 2017, it increased by 13.92%, 2018, it fell by 4.4%, 2019, it fell by 2.2%, meaning that after five years, it was down by 7.3%.

Discover the world’s #1 multi-asset platform

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Download MetaTrader 5 and begin trading today!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter “Analysis”) published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter “Author”) based on the Author’s personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.

Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.

By Admiral Markets

US earnings season awaits

By Han Tan, Market Analyst, ForexTime

Most Asian assets are set to end the week on a risk-off note, with regional currencies now weaker against the US Dollar, while major stock indices tracked overnight losses on Wall Street. Chinese stocks are taking a breather from their rich vein of form of late, with the Shanghai Composite index and the CSI 300 unable to build on 8 consecutive days of advances. Still, the CSI 300 is trading around a 5-year high, while the Shanghai composite index remains at its highest levels since 2018. The two benchmarks have posted a month-to-date surge of around 15 percent respectively, which far exceeds the MSCI Asia Pacific index’s five percent climb so far in July. US futures are in the red at the time of writing.

While global equities have blissfully ignored the deteriorating economic conditions around the world in the previous quarter, the moment of reckoning could arrive when the US earnings season kicks off next week. The second-quarter results are set to lay bare the pandemic’s impact to a greater extent compared to the previous quarter’s figures, and could prove to be one of Wall Street’s worst. It remains to be seen whether market participants have the stomach to digest such despairing data.

The forward guidance out of these companies however could have a more pivotal role in dictating the near-term market sentiment. After all, investors are desperate for further clarity, considering that four out of five S&P 500 listed companies withheld guidance during the last earnings season. That suggests that the 40 percent climb in the S&P 500 since March 23 has been largely fuelled by blind optimism.

Should greater clarity start feeding through over the coming weeks, that could be the catalyst to shake the S&P 500 out of its tight 230-point range that’s been adhered to since June. Still, given the unprecedented amount of stimulus measures already at work across major economies, one shouldn’t expect any pullback in risk assets to be overly drastic. On the flip side, should the upcoming earnings season bring with it greater optimism surrounding the post-pandemic recovery, that is set to give equity bulls the green light to chase further gains.

 

Gold remains at highest levels since 2011

Gold remains at highest levels since 2011

Meanwhile, investors are clearly hedging their exposures to risk, even though Gold prices have dipped below the psychologically-important $1800 level. With Gold on the cusp of five consecutive weeks of gains, the precious metal is reflecting the dynamics between hopes surrounding the global economic recovery and enduring concerns over the persistent nature of the pandemic.

Given the subdued US real yields and the stubborn risk aversion in the markets, this is clearly a supportive environment for Gold, with a repeat of the September 5, 2011 record closing price of $1900.20 in its sights.

Spot Gold could even set a new record high this year if another bolt of risk aversion courses through the markets, especially if the green shoots of the global economic recovery are snuffed out by another round of lockdowns across major economies, or if severe doubts are cast on global policymakers’ ability to support their respective economies. The threat of spiking geopolitical tensions is also lurking in the background, and if it materializes, could serve as another major tailwind for Bullion.

On the other hand, a vaccine would send the all-clear signal for risk assets at the expense of the yellow metal. More concrete signs that the global economy is set for a swifter-than-expected recovery could also pare some of Gold’s recent gains.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Markets in retreat after mixed trading on Wall Street overnight

By IFCMarkets

Top daily news

Equity markets are in red currently after a mixed session Thursday. US markets ended mostly lower yesterday after Labor Department data showed that 1.3 million Americans filed for first-time unemployment benefits last week.

Forex news

Currency Pair Change
EUR USD -0.5%
GBP USD +1.2%
USD JPY -0.36%
The Dollar strengthening is intact today ahead of inflation report scheduled for 16:30 CET today. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, added 0.3% Thursday as US Labor Department data showed 1.3 million Americans filed for first-time unemployment benefits when 1.4 new applications were expected. Both GBP/USD and EUR/USD reversed their climbing yesterday despite Germany’s statistics office report euro-zone’s largest economy’s trade surplus rose more than expected in May. AUD/USD joined USD/JPY’s continued sliding yesterday with both pairs lower currently.

Stock Market news

Indices Change
Dow Jones Index -0.77%
GB 100 Index -0.92%
Nikkei Index -1.21%
Hang Seng Index -1.99%
Futures on three main US stock indexes are edging lower currently after ending mixed Thursday after 7-2 Supreme Court decision ruling that a New York prosecutor could have access to President Donald Trump’s tax returns. The three main US stock indexes recorded returns ranging from -1.4% to 0.5% as data showed 32.9 million Americans were receiving unemployment benefits in the third week of June. European stock indexes are pulling back today after ending higher Thursday. Asian indexes are all lower today led by Heng Seng as China’s regulators cracked down on margin financing and state funds said they would reduce equity holdings.

Commodity Market news

Commodities Change
Brent Crude Oil -1.1%
WTI Crude -1.18%
Brent is edging lower today. Oil prices fell yesterday after Energy Information Administration reported that US crude inventories rose by 5.7 million barrels for the week ended July 3. The US oil benchmark West Texas Intermediate (WTI) futures ended lower yesterday: August WTI fell 3.1% and is lower currently. August Brent crude closed 2.2% higher at $42.35 a barrel on Thursday.

Gold Market News

Metals Change
Gold -0.06%
Gold prices are extending losses today . August gold ended 0.9% lower at $1803.80 an ounce on Thursday.

Market Analysis provided by IFCMarkets

Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.