(23 JUNE 2020)DAILY MARKET BRIEF 2:Gold, on the other hand

(23 JUNE 2020)DAILY MARKET BRIEF 2:Gold, on the other hand

23 June 2020, 09:35
Jiming Huang
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The EURUSD rebounded a touch above 1.1160, the critical Fibonacci support, and extended gains to 1.1280 in Asia. Technically, the pair remains in the mid-term bullish trend above this level.

Cable tested the 1.25 offers after having dipped at 1.2335 on Monday. Given the emerging hope of seeing a possible Brexit deal by this fall, sterling could make another attempt to its 200-day moving average, if the US dollar remains soft and the risk appetite firm.

Gold, on the other hand, consolidates gains near the $1750 per oz and should find little motivation to push further in the absence of a significant deterioration in the global risk sentiment.

WTI crude cements support above the $40 per barrel.

One major event investors watch this week is the result of US banks’ stress test result to be released on Thursday. With a global economy battered by the Covid-19 pandemic, distressed company debt levels and near zero rates, the bank finances are clearly under pressure – and there is not much the banks could do to please their shareholders as the actual crisis environment, as they won’t be allowed to proceed with share buybacks and dividend payouts to support their share prices. We believe that the US banks have means to navigate through hard times, but in the absence of other major news, the test results could inject some volatility to bank stock prices this week.

By Ipek Ozkardeskaya