The euro-dollar has sharply reversed course and is returning to its lows on Friday. What are your expectations in the short term?
In my opinion, a good part of the bullish movement has already taken place for the euro-dollar which in fact surprised me by the depth of the climb.
The prices are returning to the 1.125 / 1.12 area and it is possible that this is the new trading area for the cross.
With the improvement of the conditions in the United States, as confirmed by the macroeconomic data, there is likely to be a drop in the single currency against the greenback.
The first level to keep an eye on is that of 1.125, broken which attention will be directed to area 1.12 to see how it will behave near it.
Several technical analysts are looking at the conformation that has been developing since the first part of June, as a head and shoulders that could take us to lower levels than the current ones.
Gold remains above $ 1,700, but is struggling to lengthen its pace decisively. What can you tell us about this asset?
The hesitation shown in some way by gold can also be traced back to the performance of the stock markets which are now traveling in decisive progress.
With an outlook on renewed confidence and risk-on stock exchanges, gold does not tend to take off and the fact that it does not go down, however, is very illustrative of the historical phase in which we find ourselves.
Gold is confirmed as an alternative to American rates which are at zero and will likely remain at these levels until 2022, according to the latest indications from the Fed.
We are in a phase in which gold will continue to be rather priced on current levels and in a trend of this type I would only buy when it drops and I would be ready to see further bullish in the coming weeks.
In the $ 1,725 area, gold is on the high part of the channel swinging from $ 1,685 to $ 1,735.
The breakdown of the $ 1,735-1,740 could start the road to further hikes with the $ 1,800 target.
Oil is climbing back up after recent drops. Are you expecting further progress or will it come back down?
A return of oil in the area of $ 40 a barrel must be supported by fundamental elements of recovery in demand.
However, these still seem to be missing, so any bullish movement guided by a momentary risk-on attitude is not enough for now to push the black gold prices beyond the threshold of 40 dollars.
For the moment it sees a fairly lateral fluctuation corridor, even if the bullish trend in the medium term is rather evident.
I would like to keep an eye on the $ 40 per barrel area which for now will not be easily exceeded, but if this happens it will open the way towards the $ 45.
In any case, I do not expect to rise above these levels because a little more positive news from the recovery of the economy must first arrive.
In light of what has been said so far, what indications can you give us for the stock exchanges?
We are in a “kangaroo” market, as someone has defined it. There is the bear market where the trend is decidedly bearish, then there is the bull market where the trend is bullish.
Now, as someone said, we are in a kangaroo market in which the trend is lateral with rather important fluctuations.
There are no real elements to make this type of results grind in the equity markets.
We are immersed in liquidity up to the top of the hair, so the investments move on the stock and pump it.
There are a couple of elements that could cloud the horizon: the first is that the strong rises are only when the Central Banks field liquidity.
It was the turn of the Fed with the commitment to purchase corporate bonds in addition to ETFs on the secondary market, to then go to the Bank of Japan which tonight introduced additional liquidity for 300 billion dollars to give further oxygen to the economy.
Speaking in particular of the S & P500, given that the 3,120-3150 area has been exceeded, we will probably continue to stay on these levels.
It must be said, however, that compared to other times, the recent lunges have been deeper, but more tied to concerns of the moment.
The upside part is mainly driven by the liquidity of the Central Banks which no longer have cartridges, while the downside part is justifiable even with elements that are not particularly important.
The market is certainly starting to show signs of fatigue, so in the medium term there may be other jolts, but for now we are in risk-on territory and therefore the prices should remain high at least for a few days.