The Bitcoin “death cross” has occurred. The S&P 500 rallied the most in five weeks! Crude oil and gold jumped as the US dollar weakened.
Risk-on start of the week
The market sentiment is positive at the start of the week despite constantly rising virus cases all over the world. A few US states imposed curfews, while Europe was forced to introduce lockdown measures. Donald Trump announced that Covid-19 vaccines would be distributed eventually, but it was taken as a political movement. Anyway, it is a tug-of-war between vaccine and virus concerns. Elsewhere, investors will closely follow the further development of the unclear US election. Stocks and riskier currencies are rising, while the US dollar is dipping.
- The economic data this morning has revealed that Japan’s economy has recovered from the virus slump. Japanese GDP for the third quarter rose more than analysts expected: 5.0% vs. the forecast of 4.4%. However, Japan’s industrial production for September has shown a smaller increase: 3.9% vs. the forecast of 4.0%. USD/JPY is moving down.
- The second-largest economy has shown a sustained recovery as well. China’s economic indicators were mostly better-than-expected. Fixed asset investments, industrial production, and unemployment rate beat estimates, except retail sales. The Chinese yuan jumped, pushing USD/CNH lower.
- On the Brexit front, there is no sign of development. Both sides still have some disagreements over the fisheries. If the UK decides to pass the Internal Market Bill, the soft withdrawal will be out of the question. However, the British pound is edging higher amid the risk-on sentiment.
- All eyes on the speech of ECB’s President Christine Lagarde at 15:00 MT time today.
EUR/USD has approached the level of October highs at 1.1860. If the pair manages to cross it, the way to the key psychological mark of 1.1900 will be clear. Most analysts have mildly bullish forecasts. Nevertheless, if EUR/USD dropped below the key level of 1.1800, the doors towards the 50-day moving average of 1.1770 will be open.
XAU/USD has bounced off the key psychological mark of $1 900. It’s located near the 23.6% Fibonacci retracement level, making this resistance harder to cross. Elsewhere, the 50-day moving average has crossed the 100-day moving average upside down, signaling further falling. Next support levels will be at $1 860 and $1 850. In the opposite scenario, if it manages to break it through, the way towards the $1 912 and then to $1 925 will be open.
The S&P 500 has broken through the psychological level of 3 600. The way up to the all-time high of the last week at 3 665 is clear. On the flip side, the move below the low of October 12 at 3 540 will drive the stock index lower to 3 500.
There are some interesting movements on the AUD/USD chart. The aussie has crossed the 61.8% Fibonacci retracement level of 0.7260. That’s why the pair has chances to reach the next Fibo level of 0.7325 and then the high of September 1 of 0.7380. Support levels are 0.7260 and 0.7210.
- ECB’s President Christine Lagarde will speak at 15:00 MT time.
- Canadian and US Manufacturing data will be out half an hour later.
Wednesday will please traders as many economic indicators will be out! The USA, UK, and Euro Area will release PMI reports on June 23 from 10:15 to 16:45 MT.
Last week the USD soared versus other major currencies, while gold headed for the biggest weekly loss in 15 months. Let’s see what new moves await us this week!
US PCE Price Index will be out on Friday at 15:30 MT.
Microsoft joined Apple in the $2 trillion dollar club! Follow PMI reports from the US, UK, and EU throughout the day!
The Bank of England will release its statement and announce its monetary policy decision on June 24 at 14:00 MT.