There is a coronavirus after all. Wednesday has shown us that investors are much more afraid of the second wave than expected. On Wednesday, California, Florida and Texas, one of the four largest states in the United States, reported a record number of COVID-19 infections.
The current situation shows that there are quite a few options left. On Wednesday, due to fear of a second wave of the epidemic, markets are losing ground on all fronts. Many investors assess the situation so negatively that they are waiting for the second “bottom”. The fear turned out to be much stronger. The DAX index closed 3.4% lower, at 12093, the S&P500 index is close to 3000, which is a strong support level at the moment.
Yesterday’s results on macroeconomic statistics show that the EU economy is beginning to recover. Almost all the data came out better than predicted, but so far it has not affected the price of EUR/USD. It is important for us that Europe is beginning to recover and if you look at a pair of months ahead, the euro should try to move out of the range up. On Wednesday, due to fears of a second wave of infection, the dollar is strengthening, while EUR/USD is trading at 1.1260.
Gold is well established above $1750 per ounce and continues to grow. Our forecast remains the same, and we are still waiting for the breakthrough of $1800. Gold now has the best growth potential in the entire financial sector.
Oil reacts very sharply to changes in the people infected. As soon as it was reported that a pandemic was going on in the United States the price of WTI oil has gone very sharply below $40 per barrel. The oil market is the weakest at the moment, because it depends on virtually all financial indicators, as well as the ongoing COVID-19 pandemic. In the near future, the price may recover to $40 per barrel, but this requires a solid base and good statistics.
What’s waiting for us today?
14.30 Base orders for durable goods in the USA for May
14.30 US GDP for the 1st quarter of 2020
14.30 Number of initial applications for unemployment in the United States
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