Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
Market updates on October 1
Key events ahead:
Canadian GDP – 15:30 MT (12:30 GMT) time
Speech by the FOMC member Clarida – 15:30 MT (12:30 GMT) time
Speech by the FOMC member Bullard – 16:15 MT (13:15 GMT) time
US ISM Manufacturing PMI – 17:00 MT (14:00 GMT) time
- Earlier today the Reserve bank of Australia cut its interest rate by 25 basis points to a record low 0.75%. Also, the RBA statement hinted on further easing amid the worsening economic outlook. The meeting weakened the AUD and pulled AUD/USD towards the support at 0.6689. If the Australian dollar strengthens, it will rise towards the resistance at 0.6735. The next key level will lie at 0.6748. RSI is moving within the oversold zone.
- GBP/USD is consolidating as the market is awaiting a new Brexit plan by the British Prime Minister Boris Johnson today. The pair has been trading close to the 200-period SMA on H4. If the new plans provide a solution to the backstop, the British pound will break the resistance at 1.2306. The next key level will be placed at 1.2329. In case of an alternative scenario, we will see a slide below the 1.2281 level. In this case, bears will target the next support at 1.2233.
- Will the euro slide below the 1.0890 level? The answer depends on today’s events for the USD. If they support the USD, EUR/USD will fall below the support at 1.0890. In this case, the next support will lie at 1.0858. If the USD is weak, the pair will rise to the 1.0912 level. The next resistance will be placed at 1.0947.
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.
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The Canadian central bank will make a monetary policy report and announce interest rates on Wednesday, January 20, at 17:00 MT time. Also, the BOC press conference will be held later.
USD’s rally takes a pause, while riskier assets are modestly rising.