The dollar is back on a descending trajectory during early Tuesday trading, after a technical interlude on Friday and Monday. The demand for dollar denominated assets is decreasing, as the safe haven appeal diminishes due to an escalating health crisis in some of the most populous US states, as well as political turmoil in Washington, stalling plans for a much needed economic rescue package.
USD index chart
Ricardo Evangelista – Senior Analyst, ActivTrades
Gold spot price is relatively steady around $1,970, as volatility decreased and bullion remains strong despite the recovery of stocks seen in the last 24 hours. This could be a temporary situation as investors are looking for further market movers. It is clear the resistance level of $2,000 is a strong threshold for the price and significant volumes are placed there. Any news regarding new monetary stimulus from the US Federal Reserve could trigger gold to break up the resistance level of $2,000.
Carlo Alberto De Casa – Chief analyst, ActivTrades
Shares opened mostly higher in Europe following strong bullish momentum from the Asian trading session on Tuesday. Yesterday’s reassuring manufacturing PMIs in Europe followed by positive data in the US combined with lower virus cases in some states, have lifted global market sentiment higher. In addition, the current risk appetite is also sustained by fresh hopes of further stimulus in the US as President Trump is said to be considering extending unemployment benefit.
Even if carmakers and the banking sector are among the best performers in Europe today, investors remain very attracted to tech shares following positive earnings reports last week.
This sector could be qualified as a “safe haven” for stocks as it has been one of the least impacted by the Covid-19 pandemic as tech companies and the services they offer remain well adapted to a work-from-home economy. However, despite the current very short-term bullish mood, most benchmarks will have to clear significant technical resistances before putting an end to the consolidation, re-start their bullish rally and register new highs.