Noor Trends News, Technical Analysis, Educational Tools and Recommendations
The main remarks by Mohamed Hashad, Director of Research and Development at Noor Capital, to Dubai TV on Monday, September 7, 2020.
Wall Street
Recent remarks by the Federal Reserve at the Jackson Hall annual conference and the review of its policy, allowing inflation to go above the long-term target of 2% and maintaining its main rate near 0%, have greatly helped the stock market in the US.
However, last Thursday we saw Dow Jones lose more than 800 points, and corrective decline for tech stocks, especially with some stocks being overpriced, which made an opportunity for profit making by many investors.
In addition, a rise in the US trade deficit to its highest level since 2008, showing the impact of trade conflicts with China.
Gold
The yellow metal recently gave up its record level at $2,075 per ounce, trading near 1,930 per ounce, pressured by the rise of the US Dollar (USD) after positive employment data, and the surge in US Treasury yields. At a time in which news about a vaccine for the Coronavirus (COVID-19) are helping spur risk appetite.
A vaccine could help more investors move away from safe havens, which may put extra selling pressures on the precious metal. A steep decline is not seen technically unless the physiological support level of $1,900 is broken, while on the other hand, a return to the record levels could not occur without exceeding the resistance level at $2,015.
Oil
Oil prices are pressured by concerns regarding the demand outlook, which pushed prices to its lowest since July. A decline in Chinese demand, coupled with the return of production at the Gulf of Mexico with around 1.5 million barrels per day, Iraq’s production exceeding the OPEC+ quota, and the decline in US oil imports.
EUR/USD
Despite the recent positive economic data, the Euro is suffering from the rising pressure by the USD, after breaking the 1.20 level, which suggests an increased decline for the EUR/USD pair after remarks by the European Central Bank (ECB) suggested that a strong Euro could negatively impact exports.