The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
Market updates on June 11
On Tuesday, the improved market sentiment supported risky assets such as stocks, emerging-market currencies, and crude oil.
- Oil benchmarks have been trying to recover on the improved market sentiment. Talks that OPEC and its allies would continue its program of oil output cuts supported the oil market. However, the effect was limited. WTI moved up but with small gains. Up to now, the oil benchmark has been trading near 53.60. The resistance is located at 54.48. However, the downward pressure is high. If the benchmark is not able to break above 54.48. We will see a decline to 51.70. Brent rose less than WTI. The benchmark reached a high at 62.86. However, bears were stronger and Brent moved down. The support is located at 60.60.
- The Chinese yuan succeeds to appreciate against the USD. On Friday, USD/CNH reached the highest level of the year at 6.9613. However, the improved sentiment encouraged Chinese currency. Up to now, the pair has been trading near 6.9242 moving to the support at 6.9165. A close below this level will lead to the further appreciation of the CNH. The next level to touch is 6.90. In the case of risk aversion, USD/CNH will turn around and will move towards 6.9470 targeting the top near 6.9614.
- The Mexican peso keeps gaining strength against the US dollar. USD/MXN has been moving down for the 3 days in a row. If bears manage to pull the pair below 50-day simple MA at 19.08, we will see a further decline to 19.02. If the pair rebounds, we may anticipate a rise towards 19.24. The next resistance is at 19.3120.
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.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.