Daily market analysis

Oct 06,2020

October 6, 2020

Daily Market Analysis

Market Focus

U.S. stocks closed at the highest levels of the day amid optimism that President Donald Trump will leave the hospital and lawmakers will move closer to providing more stimulus.

The S&P 500, Nasdaq Composite and Dow Jones Industrial Average all rebounded from Friday’s swoon in the wake of Trump’s coronavirus disclosure. Regeneron Pharmaceuticals Inc. rallied after Trump was given an experimental antibody treatment made by the drug maker. Energy, health care and technology shares were the biggest gainers in the S&P, pushing the benchmark index up by the most in almost four weeks.

Traders also pointed to polls suggesting a stronger lead for Biden and the possibility that a clear winner will emerge from the Nov. 3 election. U.S. markets have been nervous in recent weeks about a close election and the risk of a long and messy legal battle.

Elsewhere, consumer companies and banks led a broad advance among European stocks. Equities in Asia notched gains, while crude oil rebounded from a three-week low and gold advanced.

 

 

Main Pairs Movement

The greenback slid the most in more than a month as improving risk sentiment and anticipation of a Democratic sweep in November drove stocks and Treasury yields higher; all of the G-10 currencies except the yen and Kiwi dollar strengthened.

Other than this, risk assets benefited from polls showing ebbing odds of a disputed election outcome along with the potential for an agreement on another round of fiscal stimulus. Canadian loonie fell .3% to 1.3257 as of writing, lowest level since Sept. 21 as WTI oil gained 5.9% most since May amid risk-on.

As commodities-linked currency, Aussie rose .3% to .7128, was supported after the nation’s Prime Minister said the government will bring forward $7.5 billion in infrastructure finding into this year’s budget, which will be released Tuesday.

 

COVID-19 Data (EOD):

 

Technical Analysis:

XAUUSD (H4)

Gold hovered with 2 consecutive day with extended its solid upward consolidative price action through the early Euro session and remained confined in a range, close around 1913.5. For RSI aspect, index rallied up to 59, suggesting a benign bullish guidance for further.

Other than this, we still believe the bullish gold position is motivated by high positive correlation with U.S. shares market through risk sentiment improvement as we observation previously. In contrast, DXY index went down below the critical support at 93.7 around which driving by risk-on as well. Meantime, investors are pricing for Democrat candidate, Joe Biden, will win the election contested on Nov.3. according to currencies volatility market.

 

Resistance: 1919.8, 1936.75

Support: 1908.09, 1884.09

 

EURUSD(H4)

Euro dollar is trading at fresh two-week highs at 1.1783 as much as 1% and poised to extend its advance. At the same time, the U.S. ISM Services PMI surged to 57.8 in Sept against 56.2 expected then consecutive optimism in nearly months that risk appetite bolster hit greenback. On the other hands, European data was also encouraging, as Retail Sales in the Union were up 4.4% MoM in August, much better than anticipated, while the E.U. Markit Services PMI came in at 48 in Sept, better than the previous estimate of 47.6, although still signaling economic contraction. This Tuesday, Germany will release Aug. Factory Orders, seen advancing a modest 2.6% MoM. Also, ECB’s Largarde and Fed’s Powell are due to offer speeches in separate event.

For RSI aspect, it close to over bought area at 67 around, suggesting a bullish further guidance. Long-term MA is converse its downward trend to flat position and short-term MA remained soar up. Meanwhile, euro dollar seems rebound to critical resistance above 1.1756 around. We believe euro dollar would highly probably extend it bullish trend with modest momentum.

 

Resistance: 1.1795, 1.1857

Support: 1.1755, 1.1711

 

USDJPY (H4)

Japan yen rallied up .4% to 105.72, with residual offers near the 105.4 level reached during Friday’s New York session taken out by interbank buyers that led to a minor squeeze on leveraged accounts. According to RSI indicator, it surged up to 60 figure that suggesting a benign bullish trend ahead, mixed with several strength resistance that far away on 106 around.

On the other hands, both long- and short-term MA heads up with support that give multi-signal for further upward trend.

 

Resistance: 105.8, 105.92, 106.27

Support: 105.4, 105.27, 105.04

 

Economic Data