Gold price formed a bullish formation just below key resistance. A daily close above $1,800 points to further strength. Zoom and Peloton investors await the quarterly earnings.
Risk is back on as the U.S. dollar declined at the end of the last week, sending equities higher. The U.S. equity markets have bounced from their recent lows, and futures point to a strong opening.
As such, the European indices started the trading week on a bullish note. The German Dax index consolidates above 15,800, the FTSE 100 holds above 7,050, and the French CAC 40 is up over half a percentage point to start the trading week.
The story of the week is the Jackson Hole Symposium scheduled to start on the 26th of August. The market participants expect more details from the Fed regarding the tapering of asset purchases, and any news regarding a possible schedule will bring volatility.
Gold price is in a bullish formation, keeping the risk sentiment on. The market formed a bullish flag, a continuation pattern that points to further strength. On a daily close above $1,800, investors will likely buy some more, targeting the pattern’s measured move seen around $1,850.
Oil is up 3% on the day, trading around $64 at the time of writing this article. It helps the risk-on sentiment and keeps the pressure on the U.S. dollar.
Economic Events to Consider Today
Today is the PMI day in Europe and the United States. The German Flash Services PMI came out better than expected, helping European indices and the euro. As such, the common currency trades comfortably above 1.17 against the U.S. dollar, and above 128.50 against the Japanese yen.
Today’s Markets to Watch
Today’s markets to watch are gold, Peloton, and Zoom.
The bullish flag seen above points to further strength in the price of gold. The liquidation in the first half of the month was quickly bought, and now the market faces resistance at the $1,800 level. A daily close above $1,800 points to $1,850, as indicated by the measured move. Therefore, risk-on will likely stay as long as the gold price remains bid.
Peloton reports its quarterly earnings this week and the market made a marginal top at $130. Bulls would like to see a close above $130 for the recent bearish bias to dissipate, while bears will focus on $100. The round number will likely act as a pivotal level for the share price as it should provide strong support.
Similar price action is seen in the Zoom stock price. This time, the $400 level acted as a marginal resistance, while the $280 should act as support. A daily close above $440 would indicate a new attempt to the highs.
Winners and Losers
U.S. equity futures are strong, supporting the risk-on sentiment; the U.S. dollar is weak.