The euro is starting the week on the front foot, with gains versus other major currencies. The single currency has gained more than 1% against the dollar so far in June, as investors feel reassured by the way the virus has been brought under control in the European Union and the successful reopening of its main economies, which is likely to drive a steep economic recovery. Today’s meeting between the German Chancellor and the French President, in which they will discuss the European recovery fund, is likely to offer further support to the euro as both leaders are fully committed to garnering the necessary support from other member states.
Ricardo Evangelista – Senior Analyst, ActivTrades
The gold price is slowing down in early trading this morning as there is a moderate risk on mode in the market. After the decline seen in the final part of last week, stocks are trying to reduce losses and the gold run seen on Friday is temporarily losing some strength. Despite this, the whole environment for bullion remains supportive as uncertainty still dominates the main scenario amid fears over a second wave of Covid-19. Technically the price seems to be in a consolidation phase, with support levels placed at $1,763 and $1,745, while a clear break up above $1,780 would open space for further rallies.
Carlo Alberto De Casa – Chief analyst, ActivTrades
European equities surprisingly opened higher following drops in Asian shares overnight where last week’s global risk-off sentiment continues. Bull traders managed to take control of European markets at the opening bell after China, EU’s second largest trading partner, published much-improved industrial production figures for May. However, this initial spike is likely to be short-lived with risk-off sentiment set to continue this week. The outlook remains concerning with the number of new daily coronavirus cases not improving and even worsening in several areas over the weekend and this will offset the recent reassuring macro data from China, the US and even Europe. While volumes get lower as we enter the summer season, volatility spikes are expected as investors brace for a short but busy week with speeches from central bankers and the US jobs report on Thursday, before Friday’s US Independence Day.
The DAX-30 Index currently is one of the eurozone’s most resilient performers today with the market trading well above 12,000pts. However, the technical configuration doesn’t look reassuring as bull traders don’t seem to be strong or numerous enough to take prices to new highs. A break-out below the zone between 11,945pts-12,000pts would pose a serious threat to the current mid-term bullish trend and would open the way to a deeper corrective move towards 11,755pts and 11,030pts by extension.