Market Snapshot – Euro Continues to Sell-Off

Euro Weaker

The euro is likely to face a lot of selling which could drag the euro lower in the coming days. The Italian bond markets are beginning to get ugly once again and this is likely to lead the euro lower. In the morning, there was a semblance of a recovery in the euro as the risk sentiment picked up over the weekend with the meeting of the leaders from the North and South Koreas and with the prospect of a summit between the US and North Korean leaders brightening up as well. But that has now given way to concern over the Italian markets and the bears seem to be back in control of the euro and it is likely that they are going to drag the pair to the 1.1550 region where we are likely to see the next round of support. This is likely to lead to a rebound under the assumption that the euro does not get hit by any more bad news along the way.

Gold Moves Lower

The gold prices have also moved lower after a brief trip through the $1300 region that we had seen last week. This move higher seemed to be one of correction after the large downtrend that we had seen in the previous weeks and it was spurred by the increase in risk that we had seen in the markets due to the geopolitical tension that we have been seeing in the Koreas over the last week or so. But with the tension now appearing to thaw, we have seen the gold prices move back below the $1300 region as of this writing and we believe that the gold prices would continue to remain weak in the short term. There is some strong support coming in at the $1280 region in the short and medium term and we would wait and see the price action there.