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Daily market commentary: The collapse of the oil price is not over yet



ActivTrades’ Market Analysts prepared their daily commentary on traditional markets for April 16, 2020. This is not a trading advice. See details below:


FOREX

The US dollar continues to strengthen during the morning trading session in Europe, as the flight to safety intensifies with a cascade of sobering numbers from around the globe illustrating the scale of the economic recession triggered by the coronavirus crisis. The greenback is gaining ground against all other major currencies pushing the Dollar Index to the vicinity of 100. Interestingly, the dollar is recording gains against both the Japanese yen and the Swiss franc, outperforming the two refuge currencies par excellence in terms of safe-haven appeal.

Ricardo Evangelista – Senior Analyst, ActivTrades

GOLD

Gold is back in green today to continue its unusual direct correlation with stocks, which are also gaining amid a positive environment for shares. This follows both asset classes, which typically are inversely correlated, falling yesterday. Technically we are still in a bullish scenario, with the gold price not being boosted by the risk scenario but from the awareness that central banks are going to be forced to print a huge quantity of liquidity in the next months, and probably years too.

For the spot price, the zone $1,700-$1,710 has now become a first support area, while a climb above $1,730 could open space for further rallies and new records.

Carlo Alberto De Casa – Chief analyst, ActivTrades

Daily Market analysis

OIL 

The collapse of the oil price is not yet over. As mentioned in previous comments, the new agreement seems to be massive but in reality it is simply not enough in the face of the collapse in oil demand, leaving producers in serious crisis. In just a few days we have seen the price slow down to test the support zone at $19.50. A clear break down of these levels could open space for a new low with the bearish sentiment far from finished.

Carlo Alberto De Casa – Chief analyst, ActivTrades

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Daily market commentary: The collapse of the oil price is not over yet

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