Cautious stock exchanges: new drops expected soon. Eur / Usd ready to fly?

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Below is the interview with Emanuele Rigo, General Manager of Newtraderlab, to whom we asked some questions about currencies, some commodities and the expected scenarios for the stock exchanges.

The euro-dollar is trying to move away from the 1.12 area again. Do you expect new bullish developments soon?

In the short term I expect a continuation of the interlocutory phase for the euro-dollar, therefore substantially weakness and partial maintenance of prices around the 1.12 area.

From a technical point of view we are in an area of ‚Äč‚Äčlateral oscillation that goes from 1.115 to 1.135 / 1.14 and in this interval the same scenario is proposed again that we have already seen in the months of April and May.

Both the Fed and the ECB have put all they can into the field and now the ball goes to the macro fundamentals which are quite obvious.

The United States has suffered a little more and will probably suffer again concurrently with the latest increase in infections, while Europe is a little freer from the concern related to the lockdown or a possible second wave.

In the EU panorama, however, there is a question to be kept under observation and it is the Recovery Fund which must be approved at the next meeting of the EU Council on 17 and 18 July.

At least for the time being, there will be little surprise on the euro-dollar that will continue to remain anchored at current levels.

Once past arsa 1.125 it could also go towards 1.13 / 1.135, but for the moment I think this is difficult.

Gold is stepping up its pace to recent highs again after reversing course in the past few hours. What is your view on this asset?

The alternativity of gold to US rates, which will remain low for a long time until 2021-2022 according to the Fed, will continue to maintain the gold strength outlook.

We could also record descents up to $ 1,760, but the trend continues to be bullish and now the next stage is in the 1,800 area, however, at a bursting throw.

I don’t see any particular elements of discontinuity from this phase of strength, but neither of reversal of trend.
Gold is an alternative to US rates, but above all it tends to respond better on the upside when the stock markets drop and much less on the downside when the stock is stable or strong.

The outlook points entirely towards the rise in the medium term for gold.

Oil is back in the area approaching $ 40. What are your predictions in the short term?

I see oil fairly volatile in the sense that even significant fluctuations can be seen on these levels over a single week.

Black gold was unable to go above $ 41.5 and went back down: the reasons are related to the increase in contagions in economic ones such as the United States, Brazil and Russia, linked to the oil economy both for consumption and for production.

From a fundamental point of view, there is some concern that the dynamics of demand, which was hoped to be rather tonic starting from the summer, may not be as large as expected.

The OPEC + cuts should stem any downturns, but for the moment I don’t even expect a significant rise.

I therefore see an oil with important fluctuations between 37 and 40 dollars, signaling that as long as we remain below this last threshold we will be in a perfect lateral.

In light of what has been said so far, what indications can you give us for the stock exchanges?

The stock exchanges for a couple of weeks have been recording increasingly low relative minimums and maximums and this seems to be the classic bearish trend.

In my opinion we are in a phase in which there is not yet fully a realization of what is the current state of the market and the economy.

We will see this in a couple of months when the layoffs will end and when the corporate quarterly reports will start and the first crunches of corporate debt will begin to be seen, in the middle of an autumn that I expect rather hot.

We are in a perfect kangaroo market where you do not go anywhere, but oscillate in a trading range that for the S & P500 is identifiable around 3,000.

In the very short term I can expect a continuation of the falls if the anticipating aspect of gold continues in its function, but not of the exaggerated collapses, at least not in the immediate future.



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