During the daily press briefing of Andres Manuel Lopez Obrador, it was announced that Mexico will receive 1.4 million doses of the vaccine by the end of January. Is that optimistic enough for the peso?
Market updates on August 5
Key events ahead:
American ISM Non-Manufacturing PMI – 17:00 MT (14:00 GMT) time
The weekend was hurtful for the market sentiment with the updates from the Chinese side. While Hong-Kong press informed that China questioned the chance of trade talks' continuation with the US, Beijing asked State buyers to halt US agricultural imports. It resulted in the risk aversion in the markets.
- USD/CNH has risen to the record highs above the 7th level and created resistance at 7.1050. If the Chinese yuan is supported, the first key level will lie at 6.9680. After that, pay attention to the next support levels at 6.9360 and 6.9270.
- As risk-off sentiment intensified, gold moved higher to the resistance at $1,473 on H4. In case of reversal, pay attention to the $1,448, $1,436 and $1,421 (100 and 50 period SMA)
- USD/JPY jumped to the lowest levels since January's flash crash. The first support for the pair lies at 105.65. After that, pay attention to the 105.3 level. If bulls take over the market the first resistance will lie at 107.45. After the break of this level, reaching the resistance at 107.79 will be possible.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.