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Daily market commentary: The US Dollar continued its decline yesterday



GOLD

As the US Dollar continued its decline yesterday with a Biden victory in the US Presidential election edging closer, Gold reacted with a significant jump to its highest level in more than a month. Investors are betting on a “low cost” dollar for the medium-long term under a Biden presidency, as well as a dovish Federal Reserve.

Technically, we are still in the major lateral channel between $1,850 and $2,070, but we saw a first important movement yesterday as the bullion price surpassed the resistance placed at $1,930, jumping above the peaks of October 12  and 21. The next few hours and days will be crucial for understanding if gold can completely clear this resistance, continuing its recovery to the $2,000 mark in the short-term, or if a consolidation pause will be needed. Overall, the yellow metal is clearly regaining momentum.

Carlo Alberto De Casa – Chief analyst, ActivTrades

daily market analysis

EUROPEAN SHARES 

European benchmarks consolidated on Friday following a mixed opening, while a similar trend has been registered by Asian stocks. Market participants chose to temper their investments for the last trading session of the week, following four days of solid rally. Votes are still being counted in some of the key US swing states and President Trump is already challenging the results. While Democrat candidate Joe Biden is getting closer and closer to the White House, according to the latest results, Republicans managed to keep control of the Senate. This doesn’t have a huge effect on markets as most investors anticipated a contested victory for any of the two candidates since October. The biggest market drivers remain concerns due to mounting risks to economies and their current recoveries brought by the powerful second wave of Covid 19, combined with the lack of further fiscal and monetary support. All eyes will be on macro data today with the highly awaited US Non-Farm Payroll for October due later.

European stocks have traded sideways so far, with gains in the banking sectors offsetting losses in tech shares. Technically speaking, the DAX-30 index managed to clear its strong resistance zone between12,235 pts and 12,350 pts which unlocks an extended bullish potential towards 12,700 pts on the very short-term basis.

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 US Dollar continued its decline yesterday

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