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Daily market commentary: Gold volatility decreased once again



FOREX

The euro and the dollar remain pretty much where they started the week in relation to each other, just above the 1.12 level. Through the week there has been some movement, with the greenback rising during moments of greater apprehension and the single currency finding support whenever risk-on prevails.

The pair’s performance reflects the mood in the markets, which has been undecided with reasons for both optimism and caution. On one hand economic activity is giving signs of a recovery that may be quicker than some expected – as illustrated by the better than forecasted US employment numbers published yesterday – it’s also true that a resurgence in the number of coronavirus infections hints at the possibility of a second wave hindering the speed of the recovery.

EURUSD chart

Ricardo Evangelista – Senior Analyst, ActivTrades

GOLD

Gold prices relatively quickly absorbed the small sell off seen on Wednesday, recovering in a few hours and stabilizing above $1,770. There are no big market movers expected today, after the US Non-Farm Payroll data was brought forward to Thursday, ahead of the Independence day weekend.

Gold volatility decreased once again, and prices seem set to hold at current levels but are not yet ready for a strong attack to the $1,800 area. Technically we can find a first resistance at $1,7890, on the top reached two days ago, while $1,765 has now became a support zone for the spot price.

Carlo Alberto De Casa – Chief analyst, ActivTrades

daily market analysis

EUROPEAN SHARES

Share markets opened mostly flat in Europe for the end of the week as benchmarks consolidate gains registered during Thursday’s bullish session following the higher-than-anticipated US job report, while the US remains shut for holiday. The recent batch of solid macro data from different economic zones (US NFP, Chinese Industrial Production, EU PMIs) as well as encouraging trial results of a coronavirus vaccine, completely offset fears of a second wave, despite record infection numbers in some areas.

However, with the prospect of an extended virus crisis fading, investors’ focus is likely to be driven back to the US-Sino relationship, which has been strained since the validation of the “phase-one” deal at the beginning of the year. This remains one of the largest bearish factors still weighing on market sentiment, although it has not yet had a significant impact on prices as most traders remain optimistic of a positive outcome between the two blocs.

Today’s session is likely to stay calm and quiet, with no significant macro data release in sight ahead of the weekend. However, small market corrections could take place today as markets may return to test yesterday’s break-out levels, as new support.

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.

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Daily market commentary: Gold volatility decreased once again

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