The market sentiment is mixed, but there are still interesting movements on the market.
Market updates on October 10
Key events ahead:
US-China trade talks
Speech by the BOE Governor Mark Carney – 12:20 MT (9:30 GMT)
ECB Monetary Policy Meeting Accounts – 14:30 MT (11:30 GMT)
US CPI and core CPI – 15:30 MT (12:30 GMT)
The Asian trading session was highlighted by the mixed reports ahead of US-China trade talks. The news that the US administration will issue licenses, which will allow sales to Huawei and that a currency agreement between the counties may be reached, boosted the risk sentiment in the markets. Let’s see how the currency pairs reacted to this news and what levels we need to pay attention to.
- EUR/USD bulls reacted optimistically to the news about the progress in US-China trade negotiations. The pair has broken the upper border of the long-term descending channel and risen to the 1.1023 level. If this level is broken, the pair will rise further to the 1.1037 level. The next key resistance level will be placed at 1.1055. If the risk sentiment fades away, EUR/USD will fall below the 200-period SMA towards the support at 1.0985. Bears may be looking for a breakout of this level and attempt to pull the pair lower to the 1.0967 level.
- AUD/USD inched higher, too. Bulls have been trying to push the pair higher towards the 100-period SMA on H4, which lies close to the 0.6757 level. The next resistance level will lie at 0.6771. After the breakout, reaching the 0.6780 level may seem possible. In case of risk-off sentiment, the pair will reverse to the 50-period SMA near the 0.6734 level. If this level is broken, the next support will be placed at 0.6728. After that, it is recommended to pay attention to the support at 0.6709.
- As the trading session will be driven by the updates from the US-China trade talks, we expect USD/JPY to move, too. In case of a risk-on sentiment, the pair will rise above the 107.59 level (100-period SMA) on H4. The further resistance levels will lie at 107.67 and 107.75. In case of negative news, it is recommended to look for a breakout of the support at 107.33 (50-period SMA). The next support will lie at 107.22 (200-period SMA). The breakout of this level will make the pair vulnerable to the fall to 107.03 (lower border of the ascending trading channel).
US Core monthly retails sales will be announced on Friday at 15:30 MT time.
Stock significantly surged: S&P 500 and Nasdaq reached 6-week highs. The market sentiment may deteriorate today as Johnson & Johnson’s Covid-19 vaccine trails have been stopped because of the unexplained illness.
Canada’s retail sales will be out on October 21 at 15:30 MT time. Get ready with us for this event!
The market is resilient ahead of the speeches of Fed’s Powell and ECB President Lagarde, but there are still interesting movements.
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.