The forex market continues to experience extreme levels of volatility as the global coronavirus pandemic continues to cause havoc. The technology sector has been on a roll outperforming the overall stock market with big tech companies clocking record highs amid the epidemic. The blockbuster moves in the forex and equity markets is in response to change in sentiments from crisis to questionable rebound.
Forex Market Outlook
The New Zealand dollar has continued to outperform the U.S dollar registering the strongest rise in relative value over the past week. The NZ Dollar (NZD) resilience stems from New Zealand handling of the coronavirus pandemic that has seen the country go for weeks without new cases of infections or deaths.
The Australian dollar (AUD), on the other hand, has seen a significant fall in value over the past week. The decline has come at the backdrop of growing concerns about the second wave of coronavirus infections. Melbourne has already gone into lockdown as authorities try to curb a further spread of the virus.
The British Pound on the other is trying to bounce back after coming under pressure in recent weeks. The Pound registered solid gains against the dollar the past week in response to a massive £30 billion stimulus plan to stimulate the U.K economy. Reports that the EU and U.K were closing in on an agreement over fishing rights also fuelled hopes about Brexit talks conversely fueling the bid tone around the Pound.
Looking ahead, coronavirus would be a key driver of sentiments in the forex and stock markets. The number of new coronavirus cases continues to hit all-time highs with Latin America emerging as the new epicenter.
Stock Market Outlook
While the U.S stock market did rise the past week amid a spike in coronavirus cases, the upward momentum appears to be easing off limiting strong breakouts to the upside. The technology segment remains the best performing and poised to dictate the overall mood ahead of a busy week on the earnings call.
Gold (XAU/USD), on the other hand, remains bullish despite pulling lower at the close of the week last week. While price did close near eight-year high, it needs to rise and find support above the $1800 level to affirm further upside action in line with the long-term bullish trend.
Merry Markets is the home of free financial news and analysis on Forex, Stocks and cryptocurrencies. Check out our latest trading guides on best bitcoin trading brokers, Top FX Trading Brokers, and Indices Trading. Follow our reviews on Easy Markets Website, Etoro Website and City Index Forex Trading broker.