Risk-on keeps driving the market

Risk-on keeps driving the market

The US dollar keeps falling for the third day in a row, whereas riskier assets are rising. Let’s discuss the main market events and analyze the charts.  

Fundamentals

  • Donald Trump has changed his mind and expressed the desire to make an agreement over the fiscal stimulus package. Stocks surged higher. However, some analysts remain skeptical that the deal will be reached before the election on November 3.
  • Chinese Caixin Services PMI came out 54.8, which was better than the forecasts of 54.5. USD/CNH dipped to levels, unseen since April 2019.
  • A lot of British data came out this morning. A large portion of it was worse than expected, while only Index of Services beat estimates. Despite the negative economic indicators, GBP/USD keeps rallying amid the massive dollar’s sell-off.
  • Hurricane Delta has approached the Louisiana coast, causing disruptions to oil production. Oil prices rose significantly: WTI oil broke above $41, while Brent oil - $43.
Watch our daily trading plan!

Technical tips

EUR/USD

EUR/USD is trading in an ascending channel. It has just crossed the 38.2% Fibonacci retracement level of 1.1765. After some short selling, it should continue moving upwards. If it rises to the key psychological mark of 1.1800, it may jump to the 50.0% Fibo level of 1.1810. On the flip side, the move below the 1.1765 will drive the price to the next support of 1.1740.

EURUSDH4.png

S&P 500

S&P 500 is steadily moving up on hopes for a large-scale fiscal stimulus. If it manages to jump above the high of September 4 at 3 480, the way towards the all-time high of 3 580 will be open. In the opposite scenario, if it falls below the 200-day moving average of 3 390, it may fall deeper to the 100-day moving average of 3 330.

S&P500H4.png

Gold

XAU/USD has just broken through the significant resistance of $1 900, clearing the way towards $1 920. However, it may struggle to cross the month trendline. If it manages to do so, the doors towards the next resistance of $1 960 will be open. Support levels are $1 900 and $1 875.

XAUUSDDaily.png

AUD/USD

The aussie is driven upwards by the risk-on sentiment. If AUD/USD manages to break through October’s highs of 0.7195, the way to the 50.0% Fibo level of 0.7210 will be open. On the flip side, if the pair drops below the 38.2% Fibonacci level of 0.7160, it may fall deeper to yesterday’s low of 0.7130.

AUDUSDH4.png

Follow up the Canadian unemployment rate at 15:30 MT time. Better-than-expected figures will push the CAD higher.

Check the economic calendar

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Similar

USD Holds the Line
USD Holds the Line

The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now. 

US Dollar Prepares for the Pump
US Dollar Prepares for the Pump

On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies. 

Uptrend in Gold Starts Now
Uptrend in Gold Starts Now

Happy Wednesday, traders! We went through the Internet and found the best news for you, take a look!

Latest news

Market Crash Incoming?
Market Crash Incoming?

This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.

What Currency Will Overperform?
What Currency Will Overperform?

S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.

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