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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.


Maklumat/penyelidikan ini disediakan oleh Mahmoud Alkudsi dan tidak mengambil kira objektif pelaburan tertentu, keadaan kewangan atau keperluan khusus individu. Penganalisis penyelidikan bertanggungjawab terhadap kandungan laporan penyelidikan ini, samada sebahagian atau keseluruhannya, memperakui bahawa pandangan mengenai syarikat dan sekuriti mereka yang dinyatakan dalam laporan ini jelas mencerminkan pandangan peribadi dan pedagang bertanggungjawab sepenuhnya ke atas risiko mereka sendiri.

Penyelidikan yang disediakan bukanlah pandangan JME Financial Services (Pty) Ltd ataupun undangan untuk melabur dengan JME Financial Services (Pty) Ltd. Penganalisis penyelidikan juga memperakui bahawa tiada sebahagian daripada pampasannya, adalah, atau akan, secara langsung atau tidak langsung, berkaitan dengan cadangan atau pandangan tertentu yang dinyatakan dalam laporan ini.

Sehingga tarikh laporan diterbitkan, penganalisis penyelidikan dan pasangannya dan/atau saudara-mara yang bergantung kepada penganalisis penyelidikan, tidak memegang kepentingan dalam sekuriti yang dicadangkan dalam laporan ini (“kepentingan” termasuk pemilikan langsung atau tidak langsung terhadap sekuriti).

Penganalisis penyelidikan tersebut bukanlah di bawah JME Financial Services (Pty) Ltd. Anda digalakkan mendapatkan nasihat daripada penasihat kewangan bebas mengenai kesesuaian pelaburan, di bawah penglibatan berasingan, seperti yang anda anggap sesuai dengan objektif pelaburan tertentu anda, keadaan kewangan atau keperluan kewangan tertentu sebelum membuat komitmen untuk melabur.

Undang-undang Republik Afrika Selatan akan mengawal sebarang tuntutan yang berkaitan dengan atau yang timbul daripada kandungan maklumat/ penyelidikan yang disediakan.