Below is the interview with Emanuele Rigo, General Manager of Newtraderlab, to whom we asked some questions about currencies, some commodities and the expected scenarios for the stock exchanges.
The euro-dollar is climbing back, staying just below 1.18 for now. What to expect in the short term?
For the euro-dollar I see a fairly stable situation, remembering that last week we indicated as fair value at this historical moment the area around 1.18, not far from current values.
In my opinion we will have a lateral trend between 1.17 and 1.19 given the current conditions.
There are therefore no big news to report, if not a slight increase in volatility, it being understood that the relative strength of the single currency against the ticket is confirmed for a couple of reasons.
The first is the management of the pandemic which seems much better in Europe than in the United States where cases continue to increase in a rather worrying way.
The second reason is the commitment that the United States must put into counter measures by printing more money and this further depresses the value of the dollar.
From a purely macroeconomic point of view, the rise in the euro-dollar is very justified, it being understood that it will be difficult to go much beyond current levels.
At the moment the cross is in an absolutely acceptable price area and the same will probably continue to be the central fair value of the exchanges.
Gold is moving back firmly, quickly moving away from all-time highs. What are the possible scenarios now?
Gold perhaps had gone a little too high for its value, in the sense that there was a very strong speculative component that brought the prices beyond the 2,000 dollar mark.
There is a re-entry component of speculative positions that have gone a little too high, but the strong bearish movement that has brought gold back below $ 1,950 does nothing but restore some order to an extreme situation in the last two weeks.
Looking at gold in a longer-term perspective, the outlook of relative strength on the rise continues to be confirmed.
This is because gold at this moment is an alternative to American rates: the stock exchanges are again at their highest levels, but we have yet to see the economic consequences of the crisis.
There are elements pointing in the direction of the relative strength of gold relative to other assets, but probably the levels reached were too high compared to the acceptable value that the market recovers.
Today’s retreat can therefore be a clear indication that the rise in gold may have arrived and that a laterality phase below $ 2,000 could now open.
Oil is moving slightly higher after having braked decisively from the intraday tops. What can you tell us about this commodity?
The trend of relative strength in this phase is also confirmed for oil, but it seems to be struggling to rise further, also because investor positions are closely linked to the news arriving on the possible recovery of demand dynamics.
Black gold is still quite volatile and the guard level is represented by $ 45, so the entire pre-collapse area of February-March last year.
If oil were to move towards 45 dollars, it will have to demonstrate there whether we will go towards a real recovery towards 50-55 dollars, or if we will return to a phase of lateralization below the 50 dollar area.
I therefore expect a continuation of the rises in the next gold for oil which, however, let’s not forget, is subject to strong fluctuations.
I would be careful to look at the $ 44/45 area as an indicator that it could be a rise, while a drop below $ 41 / 40.5 could take us back to that side phase that characterized the months of May and June.
In light of what has been said so far, what do you expect for the stock exchanges?
At least for the rest of August there will be hardly any major trend reversals for the stock exchanges.
There is a lot of liquidity in the system and equity indices have shown some resilience to short-term fluctuations.
For the moment I don’t feel like doing anything else other than confirming the trend in progress for the stock exchanges, but I invite you, as always, to pay attention.
This especially starting from September when the first signs of an economy not as prosperous and rosy as described by the equity indices could begin to arrive.
It will be then that there could be some surprises, but not before: for now the indices could return towards the maximum, with the S & P500 now close to the all-time records.
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