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Stocks surged after Trump left hospital
The US president is back to White House after three days spent in the hospital. Riskier assets rose, while safe havens dipped.
Fundamentals
- All attention to Trump’s fast recovery from Covid-19. His return back to work has improved the market sentiment.
- Besides, escalating new virus cases and also Trump being part of that increased chances for the launch of a fiscal stimulus package. When officials finally unveil it, it should boost the sentiment even more.
- Elsewhere, national polls have pointed to the victory of Joe Biden. As people see the clear winner, they stopped being afraid of a close election, and also aggressive and cut-throat competition.
- US ISM Services PMI came out better than analysts expected: 57.8 vs. the forecast of 56.3.
- The Reserve Bank of Australia has left interest rates and yield target unchanged. According to Capital Economics, the RBA’s statement “sounded dovish and left the door open for additional stimulus”.
- Chinese people enjoy the vacation, named the Golden Week. Whereas the whole world is engulfed with the fresh virus outbreak, China has taken infections under control and has shown a steady economic rebound.
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Technical tips
EUR/USD
EUR/USD has beautifully bounced off the 23.6% Fibonacci level at 1.17050 and rallied to 1.1800, but failed to cross this level. If it manages to break through it, it may rise to the 50.0% Fibonacci level of 1.1810 and then to 61.8% Fibo level of 1.1860. In the opposite scenario, the move below the 38.2% Fibo level of 1.17640 will drive the pair back to 1.17050.
S&P 500
S&P 500 is edging higher amid the overall risk-on sentiment. The move above the high of September 16 at 3 420 will push the stock index upwards to 3 480. On the flip side, the move below the 100-period moving average of 3 330 will push the price lower to September’s low of 3 205.
AUD/USD
The Australian dollar has reversed from the key resistance of 0.7210 at the 50.0% Fibo level. If it crosses the 38.2% Fibo level of 0.7160, it will fall deeper to Friday’s low of 0.7140. In the opposite scenario, if the aussie manages to break the 50.0% level, it will jump to 0.7260, as the current risk-on mood may help it to climb up.
Gold
Finally, let’s talk about XAU/USD. It has been trading in the ascending channel. The move above yesterday’s high of $1 920 will push the price the 200-period moving average at $1 926. Otherwise, if the risky mood weighs further on the precious metal and it drops below the recent low of $1 890, the doors to $1 880 will be open.
Follow up:
- Australian Annual Budget will be published at 11:30 MT time.
- ECB’s President Lagarde will speak 5 minutes later.
- The Canadian Trade Balance will be out at 15:30 MT time.
- Fed’s Powell will deliver a report at 17:40 MT time.
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