As uncertainty deepens global volatility drops – Market Analysis – July 23

As uncertainty deepens global volatility drops – Market Analysis – July 23

Fundamental and technical reasons alike keep equities in limbo

Stock indices advanced throughout the day led by the publication of earnings in Europe and the United States with mixed results.

Positive surprises came in the case of Tesla or Unilever, which rose more than 8%. This made investors think that the effects of the lockdown will not be as detrimental as initially expected.

Tensions with China continue but today have been pushed aside, and the market returned to risk-on mode, albeit without much enthusiasm. The PMI figures to be released tomorrow could serve to whet risk appetite again.

The US Dollar has taken a break today from its decline after several consecutive days of losses.

This downward movement is supported by the fall in yields of American treasuries, which in the case of Tnote10 are again below 0.60 %, and also due to the decrease in the degree of market risk aversion.


GOLD is on fire!

This level of historically low-interest rates, not only in the United States but globally, is one of the main factors that has caused GOLD's spectacular rise, which is only $40 away from its highest price level in history $1920.

These low-interest rates that will be maintained indefinitely, and a US Dollar in a downward trend, are all factors that will continue to support GOLD the appetite of investors for the precious metal.

This serves as a hedge against the debasement of the monetary value, does not seem to have come to an end.

Many analysts who specialized in this commodity anticipate a price of around $2.000 soon.


Currencies & BREXIT

In the currency market movements are less volatile today after the Euro rally of the past two days. EUR/USD has slowed its bullish run right at the resistance of 1.1600 that it needs to exceed in a daily close to open the way for further advances towards the 1.1820 zone.

Today, the most vulnerable currency has been Sterling Pound due to little or no result of the Brexit negotiations. EU Chief Brexit negotiator Barnier has stated that the positions remain very distant in the different negotiation areas.

With the time limit to reach an agreement, the pressure on the British currency will increase. On the other hand, some officials of the Bank of England, including its governor, are declaring to the media that they maintain a high level of uncertainty about the economic recovery, especially from the side of domestic demand.

This can be a preparation for the market for a further cut in interest rates or an increase in the asset purchase program, adding one more element of pressure to the Sterling Pound.

GBP/USD has broken down the support of 1.2700,200-day SMA, but with expectations of the US Dollar lower, it would be the EUR/GBP pair that would have the most upward room in the medium term, with a weaker Sterling Pound.

The immediate resistance is at 0.9180, close to the latest highs, and the 61.8% Fibonacci retracement of the last bearish leg.


La información presentada aquí está preparada por Miguel A. Rodriguez y no pretende constituir un asesoramiento de inversión. La información aquí se proporciona como una comunicación general de marketing con propósitos solo de información, y como tal, no se han preparado de acuerdo con los requisitos legales diseñados para promover la independencia de un estudio de inversión, y no está sujeto a ninguna prohibición para hacer frente con antelación a la diseminación de los análisis de inversión.

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