The Euro with the political #risk

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Political risk in Europe continues to hurt the single currency and EUR / USD falls another 0.3% at the beginning of today’s session, completing its worst daily run in nearly two months. The fall of the euro amid political noise in France has given a respite to the dollar, which had its best day in a month during Tuesday’s session and rose 0.3% at the beginning of the European session. Against the yen, the euro has fallen 0.5% and reaches 119.48, this being its lowest level since December 5.

German sovereign bonds continue to be preferred over French sovereign bonds and the difference between their rates of return reaches the highest level in more than four years. On the other hand, Trump’s protectionist and anti-immigration policies have also added pressure to the euro because of the uncertainty that has been generated about the future of the global economy.

That uncertainty about the future direction of the global economy has caused investors and traders to seek shelter from instruments such as the yen, gold and even the dollar. The greenback keeps rising and its index hits again at 100.59 which is where its exponential moving average of 55 days is. It is estimated that once Trump has announced in detail its investment plans in infrastructure and tax cuts, the dollar is likely to return strongly to its upward trend.

For some analysts and economists, it is possible that the euro against the dollar will catch up in the coming months, especially if the political risk in Europe is maintained, to which concerns have been added about the need for another possible economic bailout to Greece.

Stock Markets

In the US, the leading indexes have closed higher for yesterday, with the Nasdaq reaching record highs after the Dow Jones and S & P 500 also reached record highs during the daily session. The Nasdaq rose 0.2% to close at 5674 points.

The Dow rose 0.2% and closed at 20090 points. The S & P500 up 0.1% and closes at 2293 points. The above-reported earnings report from Apple (NASDAQ: AAPL) and IBM (NYSE: IBM) has supported the stock market in the United States, especially the technology sector.

In Europe the main indexes were somewhat mixed, but at the moment they seem to be gaining ground on the rise, although the UK FTSE 100 keeps wavering around yesterday’s close without much variation and remains at 7,186 points. Germany’s Dax rose 0.21% to 11572 points. France’s Cac 40 is up 0.63% and stands at 4,784 points. The Ibex 35 of Spain rose 0.18% and remains at 9348 points.

Foreign exchange

The best bullish performance among the major currencies has been the dollar. The euro against the dollar remains below 1.0650 and could be visiting the round number level of 1.0600. If it breaks below 1.0600, the EUR / USD could be changing its downward trend.

The pound against the dollar was somewhat volatile during yesterday’s session, but for today has slowed slightly its movements and remains around 1.2500 without taking a clear direction so far. The yen has been favored by political risk aversion, but the USD / JPY has failed to confirm a downward swing of 112.00, which remains a good support for parity.

Basic goods

Gold remains above its exponential moving average of 200 days, around 1230 and reaches a daily high in 1238. Gold may continue its bullish trend, especially if uncertainty remains in the financial markets over The political risk. OPEC’s efforts to reduce oil production in an attempt to push up oil prices have been offset by rising US crude inventories and falling demand in China.

WTI oil remains below 52.00, reaching a low for today at 51., 19. If you confirm a break of 52.00, it is possible that WTI oil will again visit 50.00.

 

The EUR / USD tries to break below its bullish channel on the daily chart. Will it break below 1.0600 EUR / USD or return above 1.0700 to re-enter itsbullish channel?

 

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