Contest Trader

Don't miss the chance to cash-in prizes totaling

$10.000
Register here for the Ultimate demo trading competition

Gold Price Weakens, EUR/USD Eyes Testing Key Support Level, What’s Next?

Gold Price Weakens, EUR/USD Eyes Testing Key Support Level, What’s Next?

Concerns over the coronavirus increasing numbers weigh on market sentiment and sends equities and risk currencies lower. What Moves markets today?

Equities

Most global stock markets flashed in the red on Monday and Asian equities extended losses on Tuesday due to coronavirus fears as full restriction measures could be reinstated in Europe. As usual, the aviation and hospitality sectors would take the bigger hit as reports talked that the UK PM would encourage Britons to return to work from home.

The Fed Chair assured on Monday that the Central bank remained committed to doing “all that it takes” to ensure that the recovery will be as strong as possible. Powell will testify before the US congress for three days where he is expected to repeat what he said in the latest Fed policy meeting of keeping on low-interest rates, tolerating higher inflation levels, and targeting better employment rates. Additionally, Powell may repeat his invitation to politicians to break the current deadlock and help the Us economy with another round of fiscal stimulus.

Stock Market

Change %

S&P 500

- 0.9%

Dow Jones

-1.7%

NASDQ

+0.7%

Japan 225

-1.2%

DAX 30

-3.3%

FTSI 100

-2.6%

CAC 40

-2.6%


Currencies

The US dollar benefited from weaker risk-on sentiment due to the coronavirus developments and the delay in US fiscal stimulus. The safe-haven currency rallied on Monday to a six-week high against a basket of currencies.

The outlook of the US Dollar index remains neutral while below 94.04. On the other hand, EUR/USD would change its neutral outlook if closes below 1.1713.

GBP/USD retreated on Monday due to a stronger US dollar and lower chances of the EU-UK trade deal. A close below 1.2773 may resume bearish price action.

Commodities

The oil price slipped on Tuesday as the tropical storm in Mexico Gulf lost strength and concerns increase over fuel demand due to the persisting surge of coronavirus cases worldwide. Brent oil fell on Tuesday by 0.9% while, US Crude has lost 1.3% of its value.

The Gold price fell on Monday to a multi-week low at $1,882 due to the US dollar rally and closed below $1,921 changing the precious metal outlook to negative. XAU/USD may continue falling towards $1,859o/z.

Looking Ahead

Markets eyes will be on the Eurozone consumer confidence number for September and the US home sales for July and they expect Fed member Evan’s speech and afterwards, markets will tune in the Powell testimony before the US congress.


This information/research prepared by Mahmoud Alkudsi does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk. The research provided does not constitute the views of JME Financial Services (Pty)Ltd nor is it an invitation to invest with JME Financial Services (Pty)Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of the date the report is published, the research analyst and his/her spouse and/or relatives who are financially dependent on the research analyst, do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities). The research analyst in not employed by JME Financial Services (Pty)Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation or particular financial needs before making a commitment to invest. The laws of the Republic of South Africa shall govern any claim relating to or arising from the contents of the information/ research provided.