Below is the interview with Davide Biocchi, professional trader, to whom we asked some questions on currencies, on some commodities and on the expected scenarios for the stock exchanges.
The euro-dollar continues to fluctuate around par after losing height following Powell’s speech. What to expect now?
The euro-dollar has returned to parity and is now up and down from a few sessions, like someone who has crossed the line and enjoys changing direction every day.
I think this parity is currently the way the market makes the film relative to interest rate expectations in Europe and the United States.
The slight recovery of the euro-dollar before Powell’s intervention is due to the fact that there is a little more consensus that the ECB is more aggressive than expected.
For some sessions, however, the cross has stopped there and to move it can now be changes in the expectations of rate hikes in the next round.
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The external agents that can influence the euro-dollar are statements from members of the Fed, but it is unlikely that this will happen after the Jacksone Hole intervention, and certainly the data on US payrolls of tomorrow and then the updates on both European inflation that American.
Depending on how the jobs data come out tomorrow, there could be a shift in the euro-dollar in one direction or another.
The interest is all on the dollar, so much so that the dollar index is hanging on the highs, but it still has strength and if there is still some we will see the breakout of the top on the dollar index and the low on the euro-dollar.
Gold suffers from the strength of the dollar and continues to decline. What are the expectations in the short term?
Gold is back dangerously close to $ 1,680, while if you look at the euro chart you can see that gold remains high because the exchange rate effect is heavy.CopyAMP code.
US bonds are seeing yields rise because the expectation is that the Fed will continue to raise interest rates.
If yields rise, gold suffers as it is an alternative to bonds, also suffering the blow from the strength of the dollar.
For gold, the $ 1,680 area is a strong support and therefore a violation of it would lead to a significant acceleration to the downside.
It is also true, however, that from this threshold up to now gold has always reacted, but my doubt is linked to the fact that we are returning to retest this level shortly after the last test.
Below $ 1,680, the first noteworthy level for gold is around $ 1,550 and the second in the $ 1,460 area.
Oil continues to decline below $ 90 a barrel. What can you tell us about this asset?
China has an impact on the price of oil, but the producing countries have been good at curbing the bleeding of prices a little.
The break down of $ 85 could lead to accelerations with deeper targets for black gold.
Below $ 85, the next support is around $ 76 a barrel.
How do you assess the recent stock market movements and what are the possible scenarios now?
Tomorrow is the appointment with the US pay-rolls and coincidentally the stock indices are going to lean on important supports: the S & P500 at 3,900 points, the Eurostoxx at 3,450 points and the Dax at 12,500 / 12,400 points.
For the Ftse Mib I had identified a range delimited by the minimum of Monday and the maximum of last Tuesday, respectively in the range of 22,500 and 22,200 points.
I had also said that a break of one of these two levels would lead to an acceleration and unfortunately the breach happened to the downside.
Below 21,500 points, the Ftse Mib has no other thresholds up to 20,500 points, so there is still room for maneuver to the downside.
What I can say is that the S&P 500 and Nasdaq, like other indices, are on important supports and it will all depend now on the US jobs data arriving tomorrow.
Depending on how the pay-rolls update will be, there will be a break in the supports or a rebound in the major indices.
Tomorrow’s figure will have a great impact on the currency and consequently on commodities, but also on the financial markets.