After the Dow Jones surged to the record high above 30,000, today all three major indices retreated and fell back into negative territories
Market Focus U.S. stocks paused from records as investors eyed on a batch of economic data that suggested a potential slowdown in economic growth, resulting in higher treasuries. After the Dow Jones surged to the record high above 30,000, today all three major indices retreated and fell back into negative territories. Investors appeared to be more restrained after a lower- …
U.S. stocks paused from records as investors eyed on a batch of economic data that suggested a potential slowdown in economic growth, resulting in higher treasuries. After the Dow Jones surged to the record high above 30,000, today all three major indices retreated and fell back into negative territories. Investors appeared to be more restrained after a lower- than- expected U.S. jobless claims, and be taking a breather ahead of the U.S. Thanksgiving Day holiday on Thursday, leading to a relatively quiet market today.
Today, the U.K. announced its largest borrowing level ever, the highest since World War II, as the pandemic is forecast to cause the largest plunge. The U.K. economy is forecast to contract by 11.3% this year, followed by 5.5% and 6.6%. The economy has been hit harder by the pandemic than those of many rich nations. More than 56,000 people have died from the pandemic, the highest death toll in Euro zone. The U.K. is also confronting the risk of a trade shock within 6 weeks, the time frame when post- Brexit transition deal is due. As of now, no new trade agreement has been yet reached with the European Union.
The Sterling Pound rallies in recent trades against major currencies as the London fix approaches, even though a lack of progress in Brexit talk. According to the President of the European Commission, Von Der Leyen, she has given a statement that she “can’t say if there will be a deal or not.” Nonetheless, the lack of progress towards Brexit seems to do little on denting sentiment, the Sterling Pound. Conversely, the Sterling Pound’s price action seems to be more benefitting from London Fix flows, volumes are expected to be thin in the future.
Today, gold takes a breath from the bearish momentum on Monday and Tuesday by the combination of vaccine news from AstraZeneca and the news that former Fed Chair Janet Yellen has been picked as Treasury Secretary. However, gold is still under downside pressure because of weak inflation pressures, suggested by the Federal Reserve’s inflation measure of 1.4%, down from September’s annual rise of 1.6%. That being said, weak inflation pressures give the Fed a significant room to launch new stimulus plan, affecting little to Gold’s upside movement.
GBPUSD (4 Hour Chart)
GBPUSD continues to trade along the ascending trend line, above 1.3300 price level. As the pair almost reaches the upper bound of Bollinger Band, further bullish advancement is expected to be supressed and due to a pullback; With the RSI’s level of 62, the pair looks overbought. Initial bearish target would be located at 1.3340 and 1.3389. The price 1.3340 would act as a critical price zone; if the pair successfully penetrates 1.3340, then the bearish momentum is expected to continue. Conversely, it it fails to do so, then the bullish momentum would likely be offered.
Support: 1.3300, 1.3222, 1.3059
EURUSD (4 Hour Chart)
After breaking 1.1866 price zone, EURUSD’s short- term momentum is to the upside. EURUSD eyes on the resistance at 1.1921. The pair is trading above the 20 Simple Moving Average, thus suggesting a postive position. Support awaits at 1.1890, followed by 1.1818 and 1.1757; resistance awaits at 1.1921. The current bullish pullback towards the price zone of 1.1921 is supposed to be considered fas a sign of bears.
Support: 1.1890, 1.1818, 1.1757
NZDUSD (4 Hour Chart)
NZDUSD sustains its bullish move despite of reaching the upper band of Bollinger band. The MACD is relatively flattening above its rising red line while the RSI is merely above the 70th mark, both suggesting the incompletoion of the bullish direction. Continuing to rise, NZDUSD is heading to test its resistance level at 0.7014 once again within the trading session. If it eventually fails to penetrate, then it would consolidate in the price zone at 0.7014 and 0.6964. To sum up, NZDUSD’s bullish picture remains robust and solid above the 50 Simple Moving Average, continuing its positive movement in the short- term.
Support: 0.6939, 0.6903, 0.6885
The previously depressed black gold rallied in the wake of positive vaccine development and easing US political uncertainty
Market Focus US equity market rallied towards records high as Trump administration is making federal resources available to Joe Biden for his transition into office. The Dow Jones surpassed 30,000 points for the first time in history, with Boeing Co. led the gain by raising 5%. The move would officially mark the defeat of President Donald Trump in 2020 Election, …
US equity market rallied towards records high as Trump administration is making federal resources available to Joe Biden for his transition into office. The Dow Jones surpassed 30,000 points for the first time in history, with Boeing Co. led the gain by raising 5%. The move would officially mark the defeat of President Donald Trump in 2020 Election, and this partially remove political uncertainty in the US. Market also look forward to Biden’s plan to nominate former Federal Reserve Chair Janet Yellen to lead the Treasury Department. She recently said the recovery will be uneven and slow if the Congress does not step up to fight unemployment and keep small businesses afloat. More importantly, investors also foreshadow a closer cooperation between Federal Reserve and the Treasury under Yellen’s appointment, unlike the recent friction that we saw between Fed’s Powell and Treasury’s Mnuchin.
Crypto mania resumes on Tuesday, Bitcoin climbed past $19,000, a price not seen since December 2017. The most popular digital currency skyrocketed over 160%, easy money from unprecedented monetary and fiscal stimulus helped to push price towards $20,000.
Euro-dollar resumed its advance on Tuesday, gained 0.43% near closing hours. The shared currency cheered upbeat third quarter German GDP, printed 8.5% compared to expectation of 8.2%. The key economic index declined 9.7% in the second quarter of 2020, and today’s data release showed a significant recovery in Germany economic activities. Meanwhile, the Cable followed a similar trajectory as Euro-dollar, up 0.27%. The dollar tracking index fell 0.2% to 92.3, giving back all of its gain from Monday. Demand for safe-haven gold continues to deteriorate, price plunged 1.65% to $1808, the lowest since July.
WTI crude futures ramped up 4.13%, hitting $44.8 a barrel for the first time since March. The previously depressed black gold rallied in the wake of positive vaccine development and easing US political uncertainty. The Canadian dollar, which is heavily linked to crude oil, takes on the US greenback amid oil recovery, as a result Lonnie slipped 0.68%.
The commodity currency pairs, Aussie and Kiwi, were among the top performers in the G-10 group, up 1.03% and 0.78% respectively. Speculators celebrate the end of US Election uncertainty, and attention now turns to risky currencies. Kiwi passed 0.7 for the first time in two years, as market completely ruled out the possibility of negative interest rate in New Zealand.
GBPUSD (Daily Chart)
Cable is once again hitting the upper bound of a ascending tunnel. With the aid of previous high of 1.338, price is likely to be capped within the current tunnel within the next few days. Price were crudely rejected whenever it attempts to break the ceiling during the past two months. However, there has been a change to this pattern, recent price seems to be clinging to the ceiling , which migh suggest bidders are setting the stage for an eventual breakthrough. Before that happens, possibility of a modest retreat to 1.326 remains distinctive.
Resistance: 1.338, 1.348
Support: 1.326, 1.3
USDJPY (Daily Chart)
USDJPY struggled to find direction after rebounded 0.66% yesterday. It managed to climbed above 104 as investors are shrugging off risk-off sentiment, and attempts to stand above the descending trendline. This might be the best chance for the greenback to overturn the safe-haven Japnese Yen before the end of 2020, investors are reversing their hedge and look to secure the year-end bonus moving into December. If trendline is conquered, then it should not have much trouble passing 105.4. On the downside, support sits around 104.2, followed by 103.
Resistance: 105.4, 106.9
Support: 104.2, 103, 102.4
XAUUSD (Daily Chart)
Gold finally penetrated support zone between 1861 and 1838. In the last two months, it was consolidating between 23.6% and 38.2% Fibonacci level, and is poised to drop when market shifts to risk-on mode. The precious metal now eyes for 1765, however a revist to 1838 is not ruled out since market would like to confirm 1838 now serves as a ceiling to the upcoming bearish run. A huge plummet to the downside is unlikely since the existing anti-Gold headlines are priced in, that being said, we expect the value of yellow metal to gradually deteriorate. MACD on the daily chart also favors the bears.
Resistance: 1838, 1861, 1930
Support: 1765, 1691, 1600
Crude oil continues to gain momentum, extending to $43, on coronavirus vaccine optimism
Market Focus U.S. stocks and indices rose as investors regained hope on a reopening of economic activity after AstraZeneca and the University of Oxford said their Covid-19 vaccines were up to 70% effective. The Dow Jones Industrial Average and S&P500 both pushed higher 0.6% and 0.3%, respectively. Data showed that U.S. business in November was in the fastest pace since …
U.S. stocks and indices rose as investors regained hope on a reopening of economic activity after AstraZeneca and the University of Oxford said their Covid-19 vaccines were up to 70% effective. The Dow Jones Industrial Average and S&P500 both pushed higher 0.6% and 0.3%, respectively. Data showed that U.S. business in November was in the fastest pace since 2015, helping fuel the rotation into companies that will benefit from a return to normal economic activity. The news from vaccine successes lately have added to a risk on mood in markets; investors have started expecting an end of lockdowns and restrictions.
U.K. Prime Minister Boris Johnson has confirmed that a nationwide lockdown will be ended on the 2nd of December, which is next week. With more and more positive vaccine news, Johnson also announced that U.K. will return to a “tiered system” of restrictions, with differing degree of rules, depending on cases of pandemic infections. At the same time, after the second lockdown in early November, it has shown that coronavirus case numbers are getting stabilized. Besides vaccines and a stability of coronavirus cases, the U.K. government is also under pressure to bring its domestic business back to normal sooner, given the serious damage to the economy.
The Pound Sterling benefits from upside momentum against major currencies after AstraZeneca and the University of Oxford reported some successful results from their vaccines; even though the average effective rate is around 70%, lower than other competitors, it still brought positive input to the U.K. In the meantime, the Pound Sterling also benefits from optimism around Brexit and domestic lockdown. According to the media, the agreement between the U.K. and EU is so far 95% done, boosting the Pound Sterling.
Gold drops to multi- month lows below $1,840 as the dollar. As the data published by the IHS revealed that the private sector’s business activity in the U.S. expanded at an impressive pace in the month of November; in the meantime, the Manufacturing and Services PMI rises to 56.7 and 57.7, respectively, both are better than the estimations. With the renewed dollar index strength and the risk- on market environment, they both hurt the bulls of Gold.
Crude oil continues to gain momentum, extending to $43, on coronavirus vaccine optimism. After Pfizer, Moderna, and AstraZeneca announced positive results on its coronavirus vaccines, investors start being optimistic on the surge of economic activity, expecting to lift the demand of crude oil. Meanwhile, investors are optimistic about OPEC agreeing on a three- month extension to output cuts.
EURUSD (4 Hour Chart)
Cable has reached a two month high to 1.3392, currently trading at 1.3310 as of writing. Despite of hitting the upper band of Bollinger Band in the 4- hour chart, it continues to sustain its bullish momentum as it moves beyond the support level of 1.3275. Additionally, Cable is steadily located above the mean and the 50 Simple Moving Average, suggesting an upside movement. The RSI is on the edge of neutral condition, remaining momentum to grow. The Support awaits at 1.3275, followed by 1.3265, 1.3228, and 1.3112; the resistance awaits at 1.3392.
Support: 1.3275, 1.3265, 1.3228, 1.3112
NZDUSD (4 Hour Chart)
The NZDUSD pair is trading at 0.6919 as of writing today. From the 4 hour time frame, NZDUSD has broken downward through the mean of Bollinger Band and the upward trend, suggesting a breakpoint of the bullish channel. The RSI provides a sign of imcompletion of a bearish movement. It is expected to see the price to test and break below the support at 0.6885. As of now, a long position is not preferable; it is suggested to examine if the pair can eventually break the level of 0.6885, the support and the lower band of Bollinger Band. If it fails to break through, a pull back will be due.
Support: 0.6885, 0.6822, 0.6695
GOLD (Daily Chart)
Gold price has broken the support level at $1,862, diving to 4- month low at $1,839. Gold has accelerated its downside pressure from last week amid a positive market sentiment after the news of serveral vaccine successes. As of now, Gold locates below the 3- month support pivot at $1,862 and just penetrates the 8- month trend line; It is expected to see the downward momentum to continue lower towards $1,800 as long as the price is below $1,900.
Resistance: 1,974.70, 1,911.24, 1,862.04
Support: 1,754.55, 1,682.04
Aussie and Kiwi continue perform strong among their G-10 peers as market sentiment improves, up 0.19% and 0.2% respectively
Market Focus US equities slipped as among a dispute between the White House and Federal Reserve over emergency lending programs. The disagreement escalated on Thursday when Treasury Secretary Steven Mnuchin released a letter to Fed Chairman Jerome Powell demanding the return of government funding from the monetary authority, so it can utilize that capital in extreme market conditions. Investors worry …
US equities slipped as among a dispute between the White House and Federal Reserve over emergency lending programs. The disagreement escalated on Thursday when Treasury Secretary Steven Mnuchin released a letter to Fed Chairman Jerome Powell demanding the return of government funding from the monetary authority, so it can utilize that capital in extreme market conditions. Investors worry that a disunity government will hamper the current slowly recovering economy, and could further delay the delivery of an essential stimulus package. Mnuchin explains his motive was not to put the Treasury against the Fed, but “since the market have recovered significantly, companies don’t need more loans, and instead require more grant money, which requires actions from Congress.” Meanwhile, the Fed issued a statement urging that the full suite of measures be maintained into 2021. President of the Fed Bank of Atlanta commented on Treasury’s statement, saying “there’s so much uncertainty still out there, it is prudent to keep those things open so that when people, if they do have stress, they can draw open it.” US Chamer of Commerce also “urge these programs be extended for the foreseeable future and call on Congress to pass additional pandemic relief targeted at the American business, workers and industries that continue to suffer.”
Pfizer Inc. and BioNTech SE will request emergency authorization of coronavirus vaccine on Friday. However, it could take at least three weeks for a US Food and Drug Administration decision as trial data is probed by government agency and outside advisers.
Cable climbed 0.12% on Friday to 1.328. The pound somehow found refreshed demand despite negative development on Brexit. The EU accused UK hasn’t been putting up enough effort to overcome the main obstacles to the post-Brexit deal as three of the bloc’s leaders called for contingency plans to be stepped up in case there is no agreement.
Safe-haven Japanese Yen and Swiss Fran were on the defensive during Friday trading session, both down around 0.1% against the US dollar. USDJPY finally managed to find some ground after slipping 1.7% in the past six business days.
Aussie and Kiwi continue perform strong among their G-10 peers as market sentiment improves, up 0.19% and 0.2% respectively. The two antipodeans now turns to economic recovery following the pandemic, while the North America and European nations still struggle with swelling infection cases.
Gold rallied 0.24% after Steven Mnuchin said his agency and the Fed have enough funds to continue to support the economy. He also mentioned the stimulus negotiation will resume, and this time GOP will be approaching Democratic differently. Meanwhile, Gold ETF holdings are at the lowest in more than two months.
EURJPY (Daily Chart)
EURJPY is bouncing upon previous trendline, where it meets horizontal support of 123. The support line was the former neck-line of a double top, which turned into resistance after a downside breakout. The current retracement could also be viewed as confirmation of a supportive trendline. If it can manage to shrug off the selling bias, upside momentum will be strong, critical resistance to look out for would be 125 and 126.4. Odds for a move lower remain well on the cards with the near support at September’s lows of 122, followed by 120.7.
Resistance: 125, 126.4
Support: 123, 122, 120.7
NZDUSD (Weekly Chart)
Kiwi continues to capitalize its gain on the last trading day of the week. The general picture remains bullish on the weekly chart as it surpassed multi-year highs above 0.692. The steep ascending wedge will likely escort price toward 0.7 before any major retracements could take place. Any surge beyond 0.7 will be skeptical as RSI will likely run into overbought region, which is a very rare occasion on the weekly chart. We expect it to retreat to test 0.692 support after hitting 0.7 hurdle given it is a psychological barrier and the past three weeks’ rally seem to run ahead of itself. MACD also support a bearish trend.
Resistance: 0.7, 0.721
Support: 0.692, 0.676, 0.654
XAUUSD (Daily Chart)
Gold rebounded on 1861 support, the fifth time that price failed to pass through this level. Price seems to cling to 1861 more frequently than before, which could be a sign that bidders are gradually losing the wrestle. The descending trendline will soon meet the horizontal support line, and market will give a clear direction by then. A breakout from lower will be favorable given the current picture. If breached, then price would pull back further towards 1765. To the upside, bidders are having difficult time bypassing 1930 hurdle, and will likely persist till the end of 2020.
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