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Daily market commentary: The oil price is close to the former support zone



FOREX

The dollar is showing signs of weakness during early Tuesday trading, losing ground to other major currencies. Compared to last week, the markets appear less focused on the risk events lying ahead, such as the possibility of violent disturbances during Joe Biden’s inauguration, and are also less concerned that the massive stimulus program proposed by the incoming administration may trigger a change in the Fed’s current dovish stance. So it seems that after some early January hesitation the dollar is likely to resume the bearish trend that characterized the second half of 2020, as investors, galvanized by hopes of a massive economic rebound later in the year, will once again embrace risk and leave the safe-haven greenback behind.

Ricardo Evangelista – Senior Analyst, ActivTrades

daily market analysis

GOLD

Gold is edging higher, continuing the rebound started after the quick crash that brought the price close to the support zone of $1,800. Investors are awaiting further news about the new US government’s planned stimulus as this could be another supportive element for bullion, in conjunction with the weakening of the dollar seen in the last 24 hours.

Carlo Alberto De Casa – Chief analyst, ActivTrades

OIL 

The oil price is close to the former support zone – now resistance – placed at $52.70. If the price can surpass this level, there would be space for further recoveries, with a potential target last week’s high at $53.9-$54, an area which remains the main resistance zone. Overall the environment for oil still appears supportive, as investors are betting on an economic recovery once the vaccinations defeat the virus. On the downside, the first support levels are placed at $51.80 and $51.50.

Carlo Alberto De Casa – Chief analyst, ActivTrades

EUROPEAN SHARES 

Share markets edged higher on Tuesday despite an Asian session closing on a mixed tone overnight. While lockdowns and increasing infection numbers continue to weigh on market sentiment, investors’ risk appetite is sustained by stimulus prospects, especially in Europe where a €750bn package is being studied. This market “status quo” is likely to stay in place until the current massive vaccination process has brought the infection rate down. Meanwhile investors are likely to keep their focus on macro data and corporate results with today’s Q4 earnings from Netflix, Bank of America and Goldman Sachs in sight.

The Stoxx-50 Index successfully rebounded over the lower band of its flag and now flirts with 3,600pts. A break-out of this level would open the door to a fall down to 3,575pts while a clearing of the zone at 3,625pts would open up the possibility of an extended rally to around 3,645-3,650pts.

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: The oil price is close to the former support zone

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