The US dollar turned to the upside on Monday. Let's discuss what to expect next from the market.
US Federal Judge stopped TikTok's ban
- The market sentiment has improved because of the progress in US fiscal stimulus talks and China’s steady industrial recovery. Profits of Chinese industrial companies grew for the fourth month in a row. However, Chinese firms are still under pressure amid simmering US-China tensions.
- The most debated topic today is Trump’s ban on TikTok. The US Federal Judge temporarily stopped the Chinese app’s prohibition, which was scheduled for today’s midnight. TikTok’s owner, ByteDance, claimed that they would further fight for the company’s rights. By the way, 100 million Americans have already downloaded TikTok.
- Among other developments, US officials agreed to resume talks over US fiscal stimulus on late Friday. That added some optimism to the market and stocks especially.
- The British pound gained on the recent progress in Brexit talks. UK officials are quite optimistic about the soon agreement.
- The Euro is dipping amid rising virus infections in the Euro area and the ECB’s interest in the lower currency. All attention to the speech of ECB’s President Christine Lagarde at 16:45 MT time.
EUR/USD has reached low levels of late July, but then reversed to the upside. If it jumps above the high of September 25 at 1.1675, the way towards the key psychological mark of 1.1700 will be open. In the opposite scenario, the move below 1.1615 will drive the price to the next round number at 1.1600. The RSI indicator points that the pair isn’t oversold yet, therefore the further falling remains intact. The ECB’s statement will add fresh volatility this evening.
S&P 500 has been edging higher for the third day in a row. The stock index may be constrained by the 50-day moving average at 3 350. However, if it manages to break it, the way towards the high of September 15 at 3 400 will be open. Support levels are 3 250 and 3 200.
XAU/USD has failed to cross the support of $1 860 so far. If it manages to do it, it may fall to $1 840. Otherwise, the move above the key psychological mark of $1 900 will drive the pair upwards to the 50-day moving average at $1 940.
The British pound has started the week on the positive footing. GBP/USD has bounced off the key support on the intersection of 100- and 200-day moving averages at 1.2720. It approaches the significant resistance of 1.2800. If it manages to cross it, the way towards the 50-day moving average at 1.3000 will be clear.
Follow the ECB meeting at 16:45 MT time!
Three main drivers of the market: the stimulus package, the US presidential election and the coronavirus. Let's look how market reacts.
EU Flash Manufacturing & Services PMI will come out on Friday at 11:00 MT time!
The focus of traders’ attention shifted from Brexit and the US stimulus to the coronavirus . The WHO claimed that Europe become the new Covid-19 epicenter.
Canada will publish the monthly GDP growth on October 30 at 14:30 MT time.
The European Central Bank publishes the monetary policy statement alongside with an update on the interest rate on October 29, at 14:45 MT time.