The Fed is ready to start tapering in November. Since the markets were expecting this and it wasn’t a surprise, the USD slumped allowing risk-on currencies and gold to rally up.
Main market movements on June 9
S&P 500 keeps rallying
S&P 500 passed $3200. It’s only $200 left to reach the pre-crisis level and erase all looses. Support levels are $3135 and $3000. David Sowerby, portfolio manager at Ancora Advisors in Cleveland, shared his thoughts: “I don’t think even the most optimistic bullish bull could have anticipated this. The words that comes to mind are epic, monumental.” Indeed, the S&P 500 performance has been unbelievable. It managed to rise for a really short time. Reasons are the encouraging NFP data and the enormous amount of stimulus from the Fed. The strategists at the Bank of America raised its year-end target to 2,900 from 2,600. However, they mentioned long-term risks such as the second coronavirus wave and the US election.
Gold has just passed $1700
Gold lost its positions with a renewed USD demand on Friday after the NFP report. However, yesterday gold bulls were stronger and the XAU/USD price went above the key resistance level at $1700. Now the price is headed towards the $1750. Support levels are $1680 and $1635.
EUR/USD fell on weak German data
The US dollar has been loosening against EUR for quite a long time. However, some events changed that. Firstly, better-than-expected NFP on Friday gave a stimulus to USD. Secondly, the weak German data put some pressure on EUR. All together they pushed the pair down. If we look at the chart, we’ll see that EUR/USD is headed towards the 61.8% Fibonacci level at 1.117. If it crosses it, it may go even deeper to 1.1065. Resistance levels are 1.131 and 1.150. Follow the FOMC statement tomorrow at 9:00 MT time as it will add some fresh volatility.
US Retail Sales will be out on October 15 at 15:30 MetaTrader time (GMT+3).
The crypto market keeps recovering. Bitcoin has broken above $57,000. The way up to $60,000 is open now!
The US dollar is heading to close the seventh day in the red as it remains under selling pressure. The US data at 15:30 GMT+3 (jobless claims and Philly Fed Manufacturing Index) may support the greenback if it's strong.
Canada will publish the Retail Sales and Core Retail Sales on October 22, at 15:30 MT time (GMT+3).
The United States will release the weekly Unemployment Claims on October 21, at 15:30 MT time (GMT+3).