European Wrap – Grand Reopening Put to the Test

Ease into the Weekend

An understandably tame end to the trading week, as participants in the US celebrate Independence Day and those of us in the UK eye the reopening of certain establishments tomorrow.

All in all, it’s not exactly been a week of tremendous change, the grand reopening is proving a little less grand and a little more problematic. Certain US states have been forced to halt or reverse their plans as COVID cases have spiked while the UK is pushing ahead at its plans to further ease restrictions from tomorrow, with the reduction in social distancing from two metres to one metre plus allowing for a number of establishments in the hospitality and other industries to reopen.

Super Saturday, as it’s been termed, will be an interesting test of how bad any second wave in the UK is going to be. We’ve already seen what happens in pockets of the country as lockdown measures have eased, the next couple of weeks could be the start of a major setback. Lets all hope not.

It may also give us some insight into what kind of recovery we are in for. Just how keen are people going to be to put themselves in situations around large numbers of people, even if they’re observing the rules. Given all the excitement that’s brewing, I imagine the excitement may prove too much. Good for the economy and businesses that have been devastated by the virus, bad if it leads to them being forced to close again, as we’ve seen elsewhere.

Oil lingers around $40

Oil has ended the week not too far from where it started, having conslidated around the $40 mark into the end of the second quarter. The reopening measures we’re seeing everywhere is certainly giving oil traders cause for optimism but the setbacks we’re seeing means we’re seeing a few false starts around these levels. I imagine there’ll be plenty of stumbles along the way and it will in fact be oil producers that determine what the next wave will be, with there maybe not being the same appetite to extend the cuts as there was previously.

The slow grind continues

The story rarely seems to change for gold. It’s continuing to grind its way higher but everytime it gathers any momentum, it’s hacked down and starts again. There are marginal gains each time but the big test weas meant to come around the $1,800 mark. At this rate it’s going to take some time before that comes and it’s not going to be much of a battle.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst - UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a Market Analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam