US dollar turned up after closing in red yesterday
The market sentiment is mixed, but there are still interesting movements on the market.
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Fundamental factors
- The market sentiment improved after Pfizer and BioNtech released positive results of the vaccine experiment. Tests proved that the vaccine is safe, and patients produce antibodies.
- The ADP report came worse than analysts expected yesterday. The report revealed that US firms added 2.37 million jobs, while the forecast was 2.85. The US government poured a lot of stimulus measures to support the economy, but the fresh coronavirus outbreak in the USA has slowed down the recovery.
- Crude oil inventories bet all estimates yesterday evening. The oil supply contracted by 7.2 million barrels. The forecast was only the 900 000 drop.
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Technical tips
Stocks
Nasdaq reached all-time highs at 10 300 after that encouraging news. Meanwhile, S&P 500 has risen for the fourth day. If the price crosses the resistance at 3 110, it will open doors towards the next resistance at 3 225. Support levels are at the 200-moving average at 3 025 and at the key psychological mark at 3 000.
EUR/USD
Let’s move on to EUR/USD. The pair rose significantly yesterday after the worse-than-expected ADP report. Most analysts have bullish prospects for the euro. The first reason is the weakening dollar. Its global dominance is waning. The second reason, unlike Europe, the USA is suffering from the resurgence in new infections and, therefore, has grimmer economic outlook. Reuters strategists set a target price for the EUR at 1.15 in 12 months.
EUR/USD has just crossed the strong resistance at 1.126, but stopped below the 100-period moving average and the top trendline. If it breaks it through, it will surge further to the high of June 29 at 1.129 and then to the next resistance at 1.133. Support levels are at the 1.1250 and 1.1205. The NFP report today at 15:30 MT time will add fresh volatility.
Gold
The gold price is moving down. It will meet the support level at the recent low of June 24 at $1 760.If it breaks it down, it may fall even deeper to the 50-day moving average at $1 727. It’s likely to be a short correction rather than a reverse. Gold may take a breath for a while and then surge again. Follow the NFP report. If the data comes worse than the forecast, gold can rise.
Oil
Finally, let’s talk about oil. The encouraging oil report gave stimulus for prices to increase. The WTI oil price is slightly above $40 dollars a barrel now. Analysts believe it will stay near this level for some time. Support levels are at $38 and $36.
Upcoming events:
The NFP report will be released at 15:30 MT time. Stay tuned!
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The market is resilient ahead of the speeches of Fed’s Powell and ECB President Lagarde, but there are still interesting movements.
Uncertainty underpinned USD
The uncertainty over US fiscal stimulus and Brexit, and also rising new virus cases deteriorated the market mood. That’s why we can expect the further rally of the US dollar and the fall of riskier assets today.
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