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 3
Key events ahead:
Speech by the British PM Boris Johnson – 13:30 MT (10:30 GMT)
Speech by the FOMC member Quarles – 15:30 MT (12:30 GMT)
US ISM non-manufacturing PMI – 17:00 MT (14:00 GMT)
- EUR/USD stuck above the 50-period SMA on H4 yesterday and moved up towards the resistance level at 1.0974. If the US dollar continues to weaken, buyers of the euro will break this level and push the pair towards the next resistance at 1.0994 (100-period SMA). On the other hand, if the USD is supported by the release of non-manufacturing PMI, the pair will slide below the 1.0954 level. After that, bears of EUR/USD will be waiting for a retest of the 1.0928-1.0936 levels. Reaching the 1.0928 level will increase the chance of a test of the ascending channel's lower border. The breakout of that border will make the pair vulnerable to the fall towards 1.0908.
- GBP/USD has been consolidating above the 200-period SMA on the mixed news about the new plan by the British PM Boris Johnson. Bulls are looking for a breakout of the 1.2317-1.23330 levels. Such a move will increase the possibility of reaching the resistance level at 1.2353. Downside movement will be limited by the 1.2272-1.2284 levels. Further support lies in the 1.2224-1.2234 area. The cable may get volatile on the speech by the British PM Boris Johnson at 13:30 MT.
- Weak USD is positive for gold bulls. The price for the yellow metal has been testing the 1,504.8 resistance level. The next resistance will lie at $1,507.6. If this level is broken, bulls may push the higher to the $1,510.7 level. On the other hand, the breakout of the $1,497.4 level will make gold vulnerable to the fall towards the $1,493.6 level. The next support will lie at $1,489. Pay attention to RSI, as it is moving close to the overbought zone.
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 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.
We are now past the middle of January, and this means that the largest US companies will report their earnings for the fourth quarter and many of them will provide the results of the entire 2020.