Dubai TV Interview, August 10, 2020

In an interview with Dubai TV, Director of Research and Development at Noor Capital, Mohamed Hashad takes a closer look at the markets.

US stocks did not take advantage of the good job figures, as well as the decline in the unemployment rate from 10.5% to 10.2%, and Investors ignored the employment figures.

Traders were focusing on the other major headlines in the markets, news about the US side’s moves for measures against China with the increasing doubts about the pace of the recovery in the US economy as well as the arrival of the fiscal stimulus negotiations to a dead end at the moment, all this led to ignoring the good employment figures.

Today the US markets started to witness some improvement due to the good numbers in the US labor market

USD

There was a noticeable improvement in the US dollar supported by data released on Friday. Still, the greenback is facing intense pressure against a basket of major currencies, along with heavy selling and declining bond yields.

Gold

The trend is still bullish for the precious metal, but the question is whether Congress will succeed in supporting the biggest economy? If he fails to do so, Hashad thinks the Federal Reserve will have to cut interest rates at its next meeting, and we may see new negative interest rates and thus more pressure on the US dollar, pushing gold higher.

The most important is to monitor the price’s behavior at current levels, which is the key to the trend. If the breach of $ 2075 levels is confirmed, He thinks that the next targets will be $ 2130 per ounce. As for the beginning of the downward correction, it will not start before confirming the break of 2000 levels then we may witness a bearish correction to around 1940 levels.

Oil

Oil started the week with a firm foot and found decent support around $ 41 with gains more than 1% during the European session. Oil found support from the rise in Asian demand, along with Iraq’s commitment to deepening production cuts by 400,000 barrels per day during August and September.

Euro

There is cautious optimism about the euro with the beginning of the third quarter with promising results from some sectors, especially the financial and service sector. Still, we cannot consider these figures as evidence of recovery compared to pre-pandemic levels, but we can discuss this as evidence of the acceleration of the recovery in the European economy.

Hashad believes that the euro may find a strong resistance level against the dollar at 1.1920, and we may see more decline when breaking .1700 levels to .1665 levels before resuming the bullish trend again. Still, if the last peak at .1920 is exceeded, it may continue gains to psychological levels,20.

Economic key events driving the market this week

This week, we will see Australian jobs data and UK GDP, which will have a significant impact on the British pound in addition to US retail sales.