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Daily market commentary: The US dollar is gaining ground against other major currencies



ActivTrades’ Market Analysts prepared their daily commentary on traditional markets for April 8, 2020. This is not a trading advice. See details below:


FOREX

After a brief respite on Tuesday, when investors’ glass half-full view supported risk sentiment, we seem to be back to risk aversion on Wednesday with the dollar gaining ground against other major currencies. Yesterday markets were buoyed by a reduction in the number of new coronavirus cases, triggering some gains for the euro and the pound against the greenback. However, today apprehension is back, following an increase in deaths in both Europe and the US, leading to fresh gains for the dollar as the American currency reverts to its safe haven role once again.

Ricardo Evangelista – Senior Analyst, ActivTrades

Daily Market analysis

GOLD

In the last few days we have seen an acceleration of the gold price as it seems that investors are starting to realize that central banks will be forced to print a huge amount of money and put in place other ultra-expensive measures to fight the coronavirus-induced crisis.

From a technical point of view, the price surpassed the resistance placed at $1,640 earlier this week, managing to rally up to $1,673 before a new pullback yesterday to $1,640. This area, previously a resistance, is now a first support level with the price rebounding again today by almost 1%. The main trend remains positive while investors are still pricing the real impact on the global economy of coronavirus.

Carlo Alberto De Casa – Chief analyst, ActivTrades

EUROPEAN SHARES

European share markets had a mixed opening on Wednesday following Tuesday’s session which saw prices erase their early gains at the end of a volatile trading session. This sudden change in investors’ trading stance took place after EU officials struggled to reach a common plan on measures to mitigate the negative impact of the pandemic and aid the recovery from it. In addition, investors also realised the epidemic was still far from controlled amid high death tolls yesterday. This has had a big impact in reversing any bullish market sentiment that had been built over the past few days with investors now likely to remain cautious ahead of new concrete information, data and important meetings such as today’s FOMC minutes.

There have been no significant moves in Europe so far with most benchmarks trading slightly lower amid lower levels of volatility today. The steepest decline comes from Paris where the CAC-40 Index is being led down by energy shares as investors look to reduce their exposure ahead of today’s release of US crude oil inventories as well as this week’s highly anticipated meeting in which Russia and Saudi Arabia will try to reach an agreement to bring more stability to oil markets. The French CAC-40 is currently challenging its first available support at 4,365pts (38.2% Fibonacci retracement) before the main one located at 4,315pts (50% Fibonacci). The 21-day moving average has already turned around and now plays a resistance role to the market. However, the 4,315pts level combined with the 150-pts wide gap zone between 4,290pts and 4,140pts should represent a solid support zone and may prevent the market from declining further.

Pierre Veyret– Technical analyst, ActivTrades

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Daily market commentary: The US dollar is gaining ground against other major currencies

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