ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for July 25, 2019. See details below:
FOREX
The Pound recovered some terrain yesterday, following the appointment of Boris Johnson as the new British prime minister and the ensuing cabinet reshuffle. It is interesting to note that the new members of government are all prominent figures from the ‘Leave’ side. The measured Pound recovery is a reaction to greater certainty, as the new Prime minister showed decisiveness, through the appointment of ministers that will support his number one objective: taking the UK out of the European Union on October 31st.
Nevertheless, the markets will still look at a hard-Brexit scenario as the worst possible outcome for the British economy. At the same time the resistance to such an outcome is also likely to intensify, in parliament and even within the conservative party itself. Therefore, we can expect more Pound volatility ahead.
Ricardo Evangelista – Senior Analyst, ActivTrades
EUROPEAN SHARES
European benchmarks are trading higher today despite a mixed session in Asia, where traders took note of gloomy financial earnings from South Korea. Investor sentiment towards stocks seems to be much more solid in Europe ahead of today’s highly anticipated ECB meeting. Many expect a strongly dovish tone from Mario Draghi today as poor European data may induce the European Central Bank to proceed with further stimulus to support the economy of the Eurozone. Some investors even see a chance of a rate cut today even though the ECB remains very unlikely to make a move before September. As usual, the press conference following the decision on rates will boost market volatility in the afternoon while the single currency is already under pressure this morning.
The Stoxx-600 index is trading significantly higher after a breakaway gap registered at the open, thanks to Carmakers and Tech shares. One of the best performances is that of the French CAC-40 in Paris where the market is moving towards 5,640.0pts, outside of its consolidation zone built in July. A strong support level has been identified above 5,630.0pts while the next major resistance is now located towards 5,655.0pts and 5,695.0pts by extension.
Pierre Veyret– Technical analyst, ActivTrades