Another week of markets treading warily around every Covid headline. The US continues to see increases in cases in southern states as Florida now holds the title of ‘Epicenter’ for new cases. While the leading health experts continue to push for the wearing of masks in public, President Trump continues to refuse to pass such a mandate. Still the financial markets continue to focus more on the future than the present as equities continue their push higher. This week however did see some profit taking on the ‘Technology’ trade with the Nasdaq backing off from the recent high. Brexit negotiations are on-going and relations between China and the US continue to deteriorate. Lots to focus on.
Friday had that northern hemisphere ‘Summer’ feeling about it. A slow rise higher in European equities saw EURUSD rally from 1.1380 to above 1.1440. GBPUSD would also move higher bouncing from 1.2511 to 1.2570. Gold, which had ended the prior day looking vulnerable at 1,795 would completely reverse to end Friday at 1,810.50. And US equities would end mixed, the DJ down just 63 points with the S&P and Nasdaq making minor gains. An inconclusive end to an inconclusive week. The focus to start the new week will be ongoing EU negotiations around a Covid 19 stimulus package. As of writing on Sunday afternoon negotiations are still ongoing with EURUSD set to open a couple of spreads lower.
Speaking of EURUSD let’s take a quick look at an hourly chart to see where things currently sit. At the beginning of June we broke above 1.1150 resistance and despite several moves under 1.1200, have remained above the former line of resistance. To the topside 1.1450 has been strong resistance with March’s high just shy of 1.1500 lurking in the background. The outcome of this weekends talks, plus the ongoing Brexit negotiations will likely determine the short-term direction for EUR. So keep a watchful eye on any headlines for clues to direction.