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Forex News Timeline

Wednesday, October 21, 2020

The USD/CAD pair has managed to rebound around 35 pips from six-week lows and was last seen trading above the 1.3100 round-figure mark. The pair exten

USD/CAD prolonged its recent downward trajectory and dropped to six-week lows on Wednesday.The optimism over the US fiscal stimulus weighed on the safe-haven USD and remained supportive.Sliding crude oil prices undermined the loonie and helped limit any further downside for the major.The USD/CAD pair has managed to rebound around 35 pips from six-week lows and was last seen trading above the 1.3100 round-figure mark. The pair extended its recent pullback from the 1.3260 region and witnessed some follow-through selling for the second consecutive session on Wednesday. The downtick also marked the third day of a negative move in the previous four and was sponsored by the heavily offered tone surrounding the US dollar. The latest optimism about the next round of the US fiscal stimulus package boosted investors confidence and dented the greenback's safe-haven status. In fact, the USD Index fell to one-month lows, which, in turn, was seen as a key factor that kept exerting some pressure on the USD/CAD pair. However, a fresh leg down in crude oil prices (down around 1.75% for the day) undermined the commodity-linked currency – the loonie – and assisted the USD/CAD pair to find some support near the 1.3080 region. The pair moved back above the 1.3100 mark, though lacked any strong follow-through. Renewed lockdown measures to curb the second wave of coronavirus infections fueled fears about slower recovery in fuel demand. Adding to this, a build-up in the US inventory stoked concerns over a supply glut and exerted some downward pressure on crude oil prices through the mid-European session. In the absence of any major market-moving economic releases, either from the US or Canada, the USD/oil price dynamics might continue to play a key role in influencing the USD/CAD pair. Hence, the key focus will be on development surrounding the US fiscal stimulus measures and coronavirus saga. Technical levels to watch  

Current trends in the base metals markets are complex and rely more on macro-economic developments rather than fundamental drivers. The economic recov

Current trends in the base metals markets are complex and rely more on macro-economic developments rather than fundamental drivers. The economic recovery expected in the coming months is set to support a strengthening of the sector in 2021, according to strategists at ABN Amro.  More:   Copper to target the 7000.00 mark on a clearance of September high at 6877.50 – Commerzbank Aluminium guns for the 200-week moving average at 1904.66 – Commerzbank Zinc has the 2583.00 September high in its sights – Commerzbank Key quotes “Recent positive macro-economic trends in China and its massive infrastructure stimulus package underpins market sentiment. Chinese imports of metals has remained relatively strong, implying a high need for raw materials for its manufacturing sector.” “Concerns about fresh coronavirus-driven lockdowns due to rising global cases increased the risk-off sentiment in base metals markets. This means that investors in base metals markets remain cautious going forward.”  “The uncertainty over the ultimate economic impact of the second wave of coronavirus remains high. Next to that, there are no deficits in base metals markets anymore and inventories are relatively high. This also overhangs the base metals complex and increases price volatility.”   “A further increase in this Chinese demand and solid macro-economic data going forward is likely to keep a floor under most base metals markets.”   “For 2021, global economic growth will show a recovery from current lows and base metals prices will strengthen further on this. Prices will also find support the trend in the dollar. A weaker dollar during 2021 makes metals cheaper for non-dollar holders and supports prices.”  

The renewed demand for the safe haven yen forces EUR/JPY to abandon the area of recent peaks in the 125.00 neighbourhood on Wednesday. EUR/JPY meets r

The upside momentum in EUR/JPY lost impulse in the 125.00 area.Rumours around further US stimulus hurt the greenback.Markets’ attention stays on the advance of the COVID-19 pandemic.The renewed demand for the safe haven yen forces EUR/JPY to abandon the area of recent peaks in the 125.00 neighbourhood on Wednesday. EUR/JPY meets resistance around 125.00EUR/JPY reverses a 3-day positive streak in spite of the persistent improvement in the sentiment surrounding the risk complex. In fact, market chatter around the US potential extra stimulus package keeps the dollar under heavy pressure for yet another session, particularly after latest news citing both US Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi could resume talks as soon as later in the evening. Nothing scheduled data wise in Euroland, while ECB’s Luis De Guindos said earlier in the session that an early removal of current stimulus carries the potential to hurt the incipient recovery in the region and warned at the same time against financial risks stemming from mounting debt. Later in the session, another speech by De Guindos is due along with a speech by board member Phillip Lane. In the US calendar, all the attention is expected to gyrate around the publication of the Fed’s Beige Book later in the session. EUR/JPY relevant levels At the moment the cross is losing 0.29% at 124.33 and a drop below 123.50 (100-day SMA) would aim for 123.01 (monthly low Oct.15) and finally 122.37 (monthly low Sep.28). On the flip side, the next up barrier is located at 125.08 (monthly high Oct.9) seconded by 126.46 (weekly high Sep.10) and then 127.07 (2020 high Sep.1).

S&P 500 posted a relatively neutral session on Tuesday, completing an “inverted hammer” candlestick reversal, which reinforces the conviction that the

S&P 500 posted a relatively neutral session on Tuesday, completing an “inverted hammer” candlestick reversal, which reinforces the conviction that the “neckline” to its “head & shoulders” base and the 38.2% retracement of the recent recovery at 3428/18 will hold for a turn back higher, as per Credit Suisse. See: S&P 500 Index: Current 3100-3588 trading range to stay for a while – Morgan Stanley Key quotes “The S&P 500 posted a relatively neutral session on Tuesday, completing a potentially bullish ‘inverted hammer’ candlestick reversal above the “neckline” to its recently completed base at 3428/27 and the 38.2% retracement of the recent recovery at 3420/18. This reversal pattern reinforces our view that 3428/18 will provide a solid floor for the uptrend to resume.”  “Resistance moves to 3477, above which would bullishly confirm yesterday’s session for strength back to 3516/18, then 3550, above which would trigger a move back to the 3588/94 high, which is also the upper end of its ‘typical’ extreme (15% above the 200-day average). Whilst this should clearly be respected, we look for a break in due course, with our ‘measured base objective’ at 3653.” “Below 3428/18 would throw a serious question mark over the base, with support seen at 3397 next, the 63-day average. Below here would turn the risks back lower within the range and suggest further consolidation.”  

Biden is leading Trump by miles in polls, while the increasing probability of a blue wave outcome has been correlated with higher equities, a weaker U

Biden is leading Trump by miles in polls, while the increasing probability of a blue wave outcome has been correlated with higher equities, a weaker USD and a steeper curve, but such a viewpoint is already consensus by now, as Andreas Steno Larsen from Nordea notes. Key quotes “A Biden win will be associated with a risk-asset rally, a weaker USD with positive spill overs to EM and a slightly steeper yield curve, but it is getting increasingly clear that markets are already mostly positioned for such a scenario. It could therefore be that a Biden win will rather lead to temporary profit-taking on such positions. This is now more likely than a swift rally immediately after a Biden-win, in our view.” “The very initial reaction (first 1-2 hours) of trading post a Biden win will likely lead to stronger equities, a weaker USD and higher interest rates, but such moves could be swiftly reversed due to profit-taking since everyone is already aboard the Biden train in market positions.” “We decided to conduct a survey on expected market moves over the following month of a confirmed blue wave to gauge the market sentiment. Most people expect a ‘Biden-rally’ with higher equities, a weaker USD and a steeper yield curve in the month following a blue sweep. The biggest consensus view is that long bond yields will increase if Biden wins the election in a blue sweep (76% of respondents). 67% of respondents expect the USD to weaken (DXY) and 71% expect equities to rally. It is hence a consensus view that a Biden presidency will lead to a reflationary market environment in the following month.”  

Mexico Jobless Rate came in at 5.1% below forecasts (5.3%) in September

United States MBA Mortgage Applications climbed from previous -0.7% to -0.6% in October 16

The USD/JPY pair has lost the 105.00 mark, as the broad dollar’s weakness coupled with plummeting equities. The bearish breakout exposes the 104.00 ar

The USD/JPY pair has lost the 105.00 mark, as the broad dollar’s weakness coupled with plummeting equities. The bearish breakout exposes the 104.00 area, Valeria Bednarik, Chief Analyst at FXStreet, informs. Key quotes “The market keeps waiting for news related to a US coronavirus aid package.  Late Tuesday, talks between Democrat Nancy Pelosi and Treasury Secretary Steven Mnuchin ended without a deal, but with both confident on progress. Talks will continue this Wednesday, although chances of a deal before the November 3 election are still quite a few.”   “The dollar fell on optimism and remained under pressure despite the market’s mood took a turn for the worst within London trading hours, as Brexit jitters weighed on sentiment. European indexes trade in the red, further fueling USD/JPY’s decline. The pair is pressured despite Treasury yields extended their weekly advance on hopes for a stimulus deal.” “The bearish breakout sees USD/JPY at its lowest for this October, and at risk of falling further. The 4-hour chart shows that the pair developing well below all of its moving averages, with the 20 SMA turning south. Technical indicators, in the meantime, maintain their strong bearish slopes near oversold readings.”  “The next relevant support level is 104.65, with a break below it opening the doors for a steeper decline in the near-term.”  

The bid bias in EUR/USD remains everything but abated on Wednesday and motivates spot to clinch fresh multi-week peaks around 1.1870, just to lose som

EUR/USD has quickly left behind the initial barrier at 1.1830.Further upside now aims for 1.1917 (high September 10).The bid bias in EUR/USD remains everything but abated on Wednesday and motivates spot to clinch fresh multi-week peaks around 1.1870, just to lose some vigour soon afterwards. As long as bulls remain in control of the market then the next interim target emerges at the September 10 high near 1.1920 ahead of the August top at 1.1965. Another visit to the 2020 high beyond the critical 1.20 the figure in the immediate term is not favoured for the time being Looking at the broader scenario, the bullish view on EUR/USD is expected to remain unchanged as long as the pair trades above the critical 200-day SMA, today at 1.1289. EUR/USD daily chart  

Oil prices continued to trade within relatively small trading ranges. The upside was capped due to the lingering worries regarding the economic impact

Oil prices continued to trade within relatively small trading ranges. The upside was capped due to the lingering worries regarding the economic impact of the COVID-19 measures, while the downside was protected by the OPEC+ production agreement. The black gold prepares for US elections and OPEC+ events, as per ABN Amro. Key quotes “Biden win would probably again change the energy landscape from both a supply and demand perspective for oil and gas. For example, Joe Biden would renegotiate a nuclear deal with Iran and lift – some of the – sanctions, he would restrict shale production in the US, and he would boost the economy with new stimulus packages.”   “On 30 Nov and 1 Dec, the OPEC will renegotiate its production policy with non-OPEC members, led by Russia. In the existing agreement, OPEC+ would increase production from January 2021. However, with demand remaining depressed by COVID-19 measures and semi-lockdowns, a jump in OPEC+ crude production would add even more pressure to the already depressed oil prices.”  “The volatile natural gas prices (Henry Hub and TTF) are mainly driven by high inventories and shifting weather patterns which affect demand expectations as is normal for the start of Q4.”  

GBP/USD has been advancing as Brexit and US stimulus talks continue. Investors are also shrugging off the spread of top-tier lockdowns in the UK, Yoha

GBP/USD has been advancing as Brexit and US stimulus talks continue. Investors are also shrugging off the spread of top-tier lockdowns in the UK, Yohay Elam, an Analyst at FXStreet, reports.  Key quotes “The mere continuation of Brexit negotiations is music to pound bulls' ears after last week's crisis. Back then, EU leaders refused to intensify deliberations and Prime Minister Boris Johnson called the nation to prepare for a no-trade-deal exit.”  “The safe-haven currency has been on the back foot after House Speaker Nancy Pelosi expressed optimism about talks for a large fiscal stimulus bill – letting her self-imposed deadline lapse without cutting off talks. Democrats and the White House team are pressing for a deal, yet Senate Republicans are reportedly pushing against an accord. Pelosi and Treasury Secretary Steven Mnuchin will resume talks later on Wednesday.” “President Donald Trump has marginally narrowed the gap with rival Joe Biden according to the latest opinion polls. The two septuagenarians will face each other in a televised debate late on Thursday and pollsters are set to publish several surveys ahead of the event.” “Investors seem to be shrugging off coronavirus cases despite immediate implications to the economy. Additional English regions are entering Tier Three of restrictions – the harshest. By the weekend, around 14% of England and all of Wales will be under considerable limitations. Johnson's government is considering a nationwide ‘circuit-breaker’ lockdown, yet that is still far from an operational plan.”  

The EUR/GBP cross added to its intraday losses and refreshed daily lows, around the 0.9065 region in the last hour. Following a brief consolidation th

EUR/GBP witnessed heavy selling on Wednesday amid a strong pickup in demand for the sterling.The incoming Brexit-related headlines continue to influence the sentiment surrounding the GBP.A modest uptick in the shared currency did little to lend support or ease the intraday selling bias.The EUR/GBP cross added to its intraday losses and refreshed daily lows, around the 0.9065 region in the last hour. Following a brief consolidation through the Asian session on Wednesday, the cross witnessed some aggressive selling amid a strong pickup in demand for the British pound. The incoming Brexit-related headlines raised prospects for the resumption of Brexit talks, which, in turn, prompted traders to unwinding their GBP bearish bets. The EU's chief Brexit negotiator, Michel Barnier said that a Brexit agreement is within reach and showed readiness to discuss all subjects based on the legal text. Barnier also said that level playing field remains a fundamental concern and that there will be no trade deal without a fair solution for fisheries. Separately, EU vice president of interinstitutional relations, Maroš Šefčovič, said that there is no time to lose and the goal is still to reach a deal. Meanwhile, the government spokesperson confirmed that there will be more Brexit talks again later this Wednesday, which will continue to influence the sentiment surrounding the sterling. On the other hand, the shared currency was being supported by the prevalent selling bias surrounding the US dollar, fueled by the latest optimism about additional US fiscal stimulus measures. The EUR/GBP cross, however, failed to gain any respite, with the GBP price dynamics turning out to be an exclusive driver of the intraday momentum. The EUR/GBP cross, for now, seems to have snapped four consecutive days of the winning streak and erased gains recorded over the past two days. That said, it will still be prudent to wait for some strong follow-through selling before confirming that the cross might have topped out and positioning for any further depreciating move. Technical levels to watch  

EUR/JPY moved sharply higher again on Tuesday, however, only a break above 125.11 would end the corrective risks for the core bull uptrend to resume,

EUR/JPY moved sharply higher again on Tuesday, however, only a break above 125.11 would end the corrective risks for the core bull uptrend to resume, in the opinion of the Credit Suisse analyst team. Support stays at 123.03/01, then 122.38/23.  Key quotes “EUR/JPY rebounded further on Tuesday after essentially holding above the potential uptrend from May earlier in the week. We stay biased towards further ranging here with a mild downside bias whilst below 125.11.” “An eventual break below the October low at 123.03/01 would reassert the correction and warn of a retest of the 122.38 late September low, then more likely we think key retracement supports seen at 122.27/23 – including the 38.2% retracement of the entire rally from the May low – which we continue to look to remain a stronger floor. A break though would instead raise the prospect of a deeper setback to the ‘neckline’ to the June/July base at 121.35, with scope for the 200-day average at 121.10.”  “Short-term resistance is seen at the 55-day average at 124.73 and then the recent range top at 125.11. We look to hold below here to keep the broader risks lower. Above would signal the core bull uptrend is resuming for a move to 126.46 next.”  

DXY accelerates the leg lower following the recent breakdown of the key support at 93.00 the figure, printing fresh multi-week lows in the 92.70/65 ba

DXY tumbles further to multi-week lows near 92.70.Below this area comes in the Fibo level at 91.92.DXY accelerates the leg lower following the recent breakdown of the key support at 93.00 the figure, printing fresh multi-week lows in the 92.70/65 band. A deeper pullback now threatens to drag the dollar to the sub-92.00 area, where sits a Fibo level (of the 2017-2018 drop). If sellers push further, then a visit to the 2020 low at 91.74 (September 1) should emerge on the horizon. While below the 200-day SMA, today at 96.77, the negative view on the dollar is expected to persist. DXY daily chart  

EUR/JPY’s strong rebound met a tough barrier at the key resistance zone in the 125.00 neighbourhood on Tuesday. The surpass of this area, ideally in t

EUR/JPY corrects lower after failing at the key hurdle around 125.00.Further north of the 125.00 level comes in an interim barrier at 126.46.EUR/JPY’s strong rebound met a tough barrier at the key resistance zone in the 125.00 neighbourhood on Tuesday. The surpass of this area, ideally in the very near-term, should open the door to a test of the interim hurdle at the September 10 highs in the mid-126.00s In the meantime, while above the 200-day SMA at1 121.09,  the outlook on the cross is expected to remain constructive. EUR/JPY daily chart  

Gold prices have struggled lately. A weaker dollar has supported the yellow metal somewhat but more investors have taken profit recently. Investors ar

Gold prices have struggled lately. A weaker dollar has supported the yellow metal somewhat but more investors have taken profit recently. Investors are now less convinced of another rise above $2,000 per ounce and are set to continue taking profits. However, economists at ABN Amro expect XAU/USD to race higher towards $2,100 in 2021.  See: Gold needs to clear the $1,973 September high to resume the uptrend – Standard Chartered Key quotes “Despite the modest profit-taking, net long positions in the futures markets and the total outstanding ETF positions remain very large. In short, position liquidation risk is still there.” “The US elections are approaching and we think that it is likely that more investors will take profit in gold for two reasons: First, more uncertainty could result in a more risk-off behaviour and thus liquidating long gold positions. Second, expectations of higher economic growth if Biden wins could temporarily support the dollar. As a result, gold prices will probably decline.”  “As the Fed will keep rates low for the coming years, US real yields will continue to be negative. This will support gold prices again in 2021.”  “Next year, we expect gold prices to move towards $2,000 per ounce again.”  

GBP/USD is surging to one-week tops, beyond mid-1.3000s, as Wednesday's 4-hour chart shows bulls could break the double-top at 1.3065, FXStreet’s Anal

GBP/USD is surging to one-week tops, beyond mid-1.3000s, as Wednesday's 4-hour chart shows bulls could break the double-top at 1.3065, FXStreet’s Analyst Yohay Elam reports. Key quotes “GBP/USD has decisively broken above the 50, 100, and 200 Simple Moving Average on the 4-hour chart while the Relative Strength Index is below the 70 level – thus outside overbought conditions. Topping it off with upside momentum, bulls are in control.” “The double-top of 1.3065 is critical resistance. It was first hit last week, and then early on Wednesday. Above this cap, the next levels to watch are 1.3085 and 1.3130.” “Support is at 1.3025, which was a peak earlier in the week. It is followed by 1.2980, where the 50 SMA hits the price, and by 1.2930.”   

Frost, Barnier to speak later on Wednesday Notes with interest Barnier’s significant comments on issues behind current difficulties in trade talks dev

The UK government has noted with interest the European Union (EU) Chief Brexit Negotiator Michel Barnier’s significant comments on the issues behind current difficulties in trade talks, PM Boris Johnson's spokesman said on Wednesday, as reported by Reuters. Key quotes “We note with interest that the EU's negotiator, speaking to the EP this morning, has commented in a significant way on the issues behind the current difficulties in our talks.” “We are studying carefully what was said.”  "David Frost will discuss the situation when he speaks to Michel Barnier later today.”   more to come ...

WTI (futures on NYMEX) stalls its corrective declines from monthly tops of $41.88 and regains the $41 mark in the last hour, staging a quick rebound f

WTI: Will it retest monthly highs of $41.88 ahead of EIA data?Risk-sentiment turns sour amid fresh coronavirus lockdown worries. API data showed a build in the weekly US crude supplies. WTI (futures on NYMEX) stalls its corrective declines from monthly tops of $41.88 and regains the $41 mark in the last hour, staging a quick rebound from daily lows of $40.86. The US oil witnessed a quick uptick, as the buyers seek to regain near-term control amid expectations of a drawdown in Energy Information Administration (EIA) weekly US crude inventories data, due to be published later on Wednesday at 1430 GMT. Despite the latest leg higher, the bearish pressure persists on the higher-yielding oil amid souring market mood, as the news of stricter restrictive coronavirus measures in the UK weighs. The black gold also fails to benefit from the rally in the Treasury yields and broad-based US dollar weakness, in the wake of the renewed optimism on a likely US fiscal stimulus deal ahead of the November election. The focus now remains on the EIA weekly crude stocks data and the broader market sentiment for near-term trading opportunities in oil. WTI Technical levels “…bullish reading on the 14-day relative strength index and the positive value on the MACD histogram, suggests scope for a breakout above $41.72. That would expose the 2020 high of $43.78 reached on Aug. 26. A bearish reversal would be confirmed if the resistance at $41.72 holds and sends prices back below Tuesday's low of $40.46,” FXStreet’s Analyst Omkar Godbole explained. WTI Additional levels  

Gold traded with a positive bias through the first half of the European session and refreshed daily tops, around the $1923 region in the last hour, al

Gold gained traction for the third consecutive session on Wednesday.The offered tone surrounding the USD was seen lending some support.Concerns about a steep rise in COVID-19 cases remained supportive.Gold traded with a positive bias through the first half of the European session and refreshed daily tops, around the $1923 region in the last hour, albeit lacked any strong follow-through. The precious metal managed to gain traction for the third consecutive session on Wednesday and finally broke out of its four-day-old trading range. The prevalent selling bias surrounding the US dollar was seen as one of the key factors that benefitted the dollar-denominated commodity. The US President Donald Trump raised hopes for a stimulus breakthrough and said he was willing to accept a large aid bill despite opposition from his own Republican Party. Adding to this, the House of Representatives Speaker Nancy Pelosi said that the stimulus measures would be passed by Congress. The prospect of a pre-election a pre-election US stimulus package sparked a selloff on the US bonds and pushed the yield on the benchmark 10-year bond to over four-month highs. The lack of demand for government debt, in turn, exerted some heavy downward pressure on the greenback. Meanwhile, investors remain concerned that the second wave of coronavirus infections could lead to renewed lockdown measures and prove detrimental for the already fragile global economic recovery. The market worries extended some additional support to the safe-haven precious metal. From a technical perspective, the XAU/USD is now looking to build on its momentum beyond a two-month-old descending trend-line resistance. That said, it will still be prudent to wait for some strong follow-through buying beyond monthly tops, around the $1933 region, before placing fresh bullish bets. Technical levels to watch  

EUR/USD has been advancing as US stimulus talks remain alive. Investors are shrugging off Republican reluctance for a deal and surging eurozone cases,

EUR/USD has been advancing as US stimulus talks remain alive. Investors are shrugging off Republican reluctance for a deal and surging eurozone cases, Yohay Elam, an Analyst at FXStreet, reports. See: EUR/USD to march forward to 1.20 in December – Danske Bank Key quotes “The deadline is dead and talks are still alive – the ongoing talks in Washington and the positive commentary are boosting stocks and weighing on the safe-haven dollar. While both sides say that differences remain, the prospects of seeing a multi-trillion deal agreed before the elections are inspiring markets.” “News about talks is set to rock markets and overshadow the elections. Can President Donald Trump win reelection? Tuesday was a relatively upbeat day for the current occupant of the White House, but he continues trailing rival Joe Biden ahead of the pair's televised debate late on Thursday.” “Investors seem to be dismissing the increase in COVID-19 cases in Europe. National, regional, and local governments continue curbing activity and results may take more time. In the meantime, the prospects for a double-dip recession remain elevated.” “Christine Lagarde, President of the European Central Bank, has spoken again on Wednesday, reiterating that her institution strives to price stability and wants to refrain from deflation. Is the ECB considering a new stimulus? Lagarde seems to be pushing in that direction, but she would need support from the hawks. The bank delivers its decision next week.”  

Maroš Šefčovič, European Commission Vice President of Interinstitutional Relations and Foresight, is back on wires now, via Reuters, speaking further

Maroš Šefčovič, European Commission Vice President of Interinstitutional Relations and Foresight, is back on wires now, via Reuters, speaking further on the Brexit issue.   Key quotes “No fair deal on trade without a fair deal on fisheries.” “Now is time for responsibility.” “New deal not possible unless the last one properly respected.” Earlier today, he said that “we are still far apart on Brexit.” Market reaction GBP/USD is off the five-week highs of 1.3064 but trades with size-able gains around 1.3050, at the time of writing.

The USD/JPY pair witnessed some heavy selling during the early European session and dived to fresh monthly lows, below the key 105.00 psychological ma

USD/JPY came under some intense selling pressure on Wednesday and slipped below 105.00 mark.A sharp turnaround in the equity markets benefitted the safe-haven JPY and exerted heavy pressure.The offered tone surrounding the USD did little to lend any support or stall the steep intraday decline.The USD/JPY pair witnessed some heavy selling during the early European session and dived to fresh monthly lows, below the key 105.00 psychological mark in the last hour. A sharp turnaround in the global risk sentiment forced investors to take refuge in traditional safe-haven currencies, including the Japanese yen. This comes on the back of the bearish sentiment surrounding the US dollar, which, in turn, was seen as a key factor behind the USD/JPY pair's steep intraday decline to the lowest level since September 23. The latest optimism over additional US fiscal stimulus measures faded rather quickly and was evident from a fresh leg down in the equity markets. Hopes for a pre-election US stimulus package revived after the US President Donald Trump said that he was willing to accept a larger aid bill despite opposition from his own Republican Party. Trump's remarks raised prospects for more government borrowing and sparked a selloff on the US bonds. The lack of demand for government debt was seen as another factor that exerted some additional downward pressure on the greenback. The downward momentum took along some short-term trading stops placed near the 105.00 level, setting the stage for a further intraday depreciating move. Hence, some follow-through weakness towards the 104.45 intermediate support, en-route September monthly swing lows near the 104.00 mark, now looks a distinct possibility. There isn't any major market-moving US economic data due for release on Wednesday. Hence, the broader market risk sentiment, along with the USD price dynamics and developments surrounding the US fiscal stimulus will play a key role in influencing the USD/JPY. Technical levels to watch  

The US Presidential elections are approaching. On November 2 (or before by mail) US citizens will choose a president. The most likely outcome is that

The US Presidential elections are approaching. On November 2 (or before by mail) US citizens will choose a president. The most likely outcome is that Biden wins the presidency and this result is set to benefit the commodity market, strategists at ABN Amro reports. Key quotes “We expect that Democratic policies would probably result in a considerably stronger US economy in the coming years. This is positive for commodities in general overall, especially if Chinese growth is resilient.”   “We also expect US real rates to remain negative or to decline further in 2021. This supports commodity prices due to the historical negative relationship between the two.”   “The dollar will probably be supported in the nearterm (= downside price risk dollar-denominated commodities) but we expect weakness in 2021. Some near-term weakness in commodity prices will likely result in higher prices afterwards.”  

Belgium Consumer Confidence Index down to -17 in October from previous -16

The buying interest around the British pound picked up pace during the early European session and pushed the GBP/JPY cross to the top end of its weekl

GBP/JPY gained traction for the fourth consecutive session on Wednesday.The incoming Brexit headlines continue to influence the GBP price dynamics.The risk-on mood undermined the safe-haven JPY and remained supportive.The buying interest around the British pound picked up pace during the early European session and pushed the GBP/JPY cross to the top end of its weekly range, around the 137.20 region. Having found acceptance above the very important 200-day SMA, the cross traded with a positive bias for the fourth consecutive session on Wednesday. The intraday uptick got a strong lift following the EU chief Brexit negotiator, Michel Barnier's comments, saying that a Brexit agreement is within reach. Barnier also showed readiness to discuss all subjects based on the legal text and raised prospects for the resumption of Brexit talks. It is worth recalling that the recent trade talks between the UK and the EU had stalled amid disagreements over fishing access and competition issues. Separately, Maroš Šefčovič, the EU vice president of interinstitutional relations, said that there is no time to lose and the goal is still to reach a deal. This, in turn, prompted some aggressive short-covering move around the sterling and lifted the GBP/JPY cross back above the 137.00 mark. Apart from this, the prevalent risk-on environment – amid optimism about additional US fiscal stimulus measures – undermined the safe-haven Japanese yen and remained supportive. However, Barnier's remarks that there will be no trade deal without a fair solution for fisheries capped gains. This, coupled with the imposition of fresh lockdown measures to curb the second wave of the coronavirus infection in the UK, further collaborated towards capping gains. The GBP/JPY cross continued with its struggle to break through the 137.20-25 supply zone, warranting some caution for bullish traders and positioning for any further near-term appreciating move.  Technical levels to watch  

EUR/USD climbs to 4-week highs around 1.1860 despite Tuesday's 4-hour chart is showing overbought conditions, Yohay Elam, an Analyst at FXStreet, repo

EUR/USD climbs to 4-week highs around 1.1860 despite Tuesday's 4-hour chart is showing overbought conditions, Yohay Elam, an Analyst at FXStreet, reports.  Key quotes “The Relative Strength Index on the 4-hour chart is above 70 – indicating overbought conditions. This development implies a downside correction. On the other hand, euro/dollar benefits from upside momentum and trades above the 50, 100, and 200 Simple Moving Averages.” “Resistance awaits at the fresh high of 1.1870. It is followed by the round 1.19 level, and then by the September peak of 1.1920.”  “Support is at the former stubborn peak of 1.1830 and then by 1.1795 and 1.1770.”  

United Kingdom DCLG House Price Index (YoY) below expectations (2.6%) in August: Actual (2.5%)

Gold consolidation extends as XAU/USD continues to trade within its month-long range play between $1850-$1950, but with new highs eventually expected

Gold consolidation extends as XAU/USD continues to trade within its month-long range play between $1850-$1950, but with new highs eventually expected as the yellow metal holds the $1837 support, strategists at Credit Suisse apprise. See: Gold needs to clear the $1,973 September high to resume the uptrend – Standard Chartered Key quotes “Gold extends its consolidation/correction following the move to our base case objective of $2075/80 in August, but is still holding flagged support at $1837, the 38.2% retracement of the rally from March.”  “We look for the $1837 support to continue to hold to maintain the sideways range ahead of a break above $1993 for a fresh look at $2075. An eventual move above here stays looked for a resumption of the core bull trend with resistance seen next at $2175, then $2300, although we continue to believe this will not be seen until next year.” “Below $1837 can see scope for a deeper setback to $1765, potentially $1726, but with this expected to hold.”    

Ho Woei Chen, CFA, Economist at UOB Group, suggested the PBoC would keep its monetary policy on hold throughout the next year. Key Quotes “As expected

Ho Woei Chen, CFA, Economist at UOB Group, suggested the PBoC would keep its monetary policy on hold throughout the next year. Key Quotes “As expected, the People’s Bank of China (PBoC) kept its Loan Prime Rate (LPR) unchanged in October for the sixth consecutive month. The 1Y LPR and the 5Y & above LPR were set at 3.85% and 4.65% respectively.” “The decision is in line with PBoC’s decision to keep its 1Y medium-term lending facility (MLF) unchanged at 2.95% last Thursday (15 Oct) while it continued to inject liquidity into the system via the MLFs and reverse repo operations to offset the impact from tax payments. The higher interbank rate is also seen limiting the scope for any LPR cut.” “China’s GDP growth accelerated to 4.9% y/y in 3Q20 (2Q20: 3.2% y/y) with the economic data for September showing that the recovery is gaining further traction. We expect growth to return to potential rate of 6.2% y/y in 4Q20 for full-year growth of 1.9%. This would reduce the need for further cuts to the interest rates or banks’ reserve requirement ratio (RRR), considering the strong flow of credit to the real sector in the first three quarters of the year.” “Nonetheless, the PBoC is likely to maintain current monetary policy stance to provide targeted support to businesses as well as sufficient liquidity in the system. We maintain our forecast for the 1Y LPR and the 5Y & above LPR to be kept unchanged at 3.85% and 4.65% respectively into 2021.”

“It's highly likely that China's economy will achieve positive growth this year,” Vice Premier Liu He said on Wednesday. Further comments “Will make p

“It's highly likely that China's economy will achieve positive growth this year,” Vice Premier Liu He said on Wednesday. Further comments “Will make prudent monetary policy flexible and appropriate, keep liquidity reasonably ample.” “Will increase market consolidation to a reasonable extent, to speed up the economy's dual circulation.” “China will unwaveringly insist on opening-up its markets in all aspects.”

The British pound caught some aggressive bids during the early European session, pushing the GBP/USD pair to one-week tops, around the 1.3065 region.

A combination of factors prompted aggressive short-covering move around GBP/USD.Hopes for US fiscal stimulus boosted risk sentiment and undermined the safe-haven USD.Barnier's comments provided an additional boost to the sterling and remained supportive.The British pound caught some aggressive bids during the early European session, pushing the GBP/USD pair to one-week tops, around the 1.3065 region. Following the previous day's two-way price move, the pair managed to regain some positive traction on Wednesday and was being supported by the prevalent selling bias surrounding the US dollar. The latest optimism about additional US fiscal stimulus measures remained supportive of the upbeat market mood, which, in turn, undermined the greenback's relative safe-haven status against its British pound. Apart from a broad-based USD weakness, the GBP/USD pair got an additional boost following the EU chief Brexit negotiator, Michel Barnier's comments, saying that a Brexit agreement is within reach. Barnier also showed readiness to discuss all subjects based on the legal text and raised prospects for the resumption of Brexit talks. This, in turn, prompted aggressive short-covering around the sterling. Meanwhile, the latest leg of a sudden spike over the past hour or so could also be attributed to some technical buying above the key 1.3000 psychological mark. A subsequent strength beyond a one-week-old descending trend-line resistance, around the 1.3015-20 region, also seemed to have collaborated to the strong move up and might have already set the stage for a further intraday appreciating move. With the incoming Brexit-related headlines acting as an exclusive driver of the sentiment surrounding the British pound, the GBP/USD pair had a rather muted reaction to Wednesday's UK consumer inflation figures. Technical levels to watch  

NZD/USD remains strongly bid above 0.6600 in the European session, challenging fresh two-day highs near 0.6625, courtesy of the relentless selling see

NZD/USD rebounds sharply from eight-day troughs. USD bears in control amid US stimulus hopes, risk-on mood. Rally in US T-yields could cap the upsurge in the kiwi. NZD/USD remains strongly bid above 0.6600 in the European session, challenging fresh two-day highs near 0.6625, courtesy of the relentless selling seen in the US dollar across its main competitors. The greenback was thrown under the bus after the US policymakers advanced closer to an agreement on a new fiscal stimulus package late Tuesday, boosting odds that a deal could be reached ahead of the November 3 election. The sentiment on the global stocks improved on stimulus expectations and weighed negatively on the safe-haven buck. Collaborating with the rebound in the kiwi from eight-day lows of 0.6553 reached Tuesday, the dairy price forecasts upgrade by the Bank of New Zealand (BNZ) also helped. The kiwi bank revised up its 2020/21 prediction from NZD 6.5 per kilogram (KG) to 6.8 recently, matching Fonterra’s upward revision. Note that dairy is New Zealand’s top export product. However, it remains to be seen if the major can sustain the recovery gains above 0.6600 amid a rally in the US Treasury yields across the curve on stimulus hopes. The risk-on rally in the yields could likely make New Zealand dollar less attractive as an alternative higher-yielding asset. Markets look forward to another round of stimulus talks due later on Wednesday for fresh trading impetus on the pair. NZD/USD: Technical outlook Immediate resistance is seen at 0.6631 (50-DMA), above which the 0.6650 psychological level could be tested. To the downside, strong support awaits at 0.6589 (50-DMA) should the bulls fail to defend the 0.6600 level. NZD/USD: Additional levels  

The greenback, when gauged by the US Dollar Index (DXY), remains well on the defensive and slips further back below the key 93.00 support. US Dollar I

DXY drops further below the key support at the 93.00 yardstick.The “reflation trade” keeps propping up the mood in the risk space.Mortgage Applications, Fedspeak, EIA’s report next in the calendar.The greenback, when gauged by the US Dollar Index (DXY), remains well on the defensive and slips further back below the key 93.00 support. US Dollar Index hurt by politics, risk-on trade The index extends the leg lower for the fourth session in a row on Wednesday following the rejection from the vicinity of the 94.00 mark (October 16) and particularly after breaking below the 55-day SMA in the 93.30 region. The index stays on the negative footing and flirts with multi-week lows in the proximity of 92.70 against an unfavourable context for the greenback, with extra fiscal stimulus and a Biden win at the November elections taking centre stage and driving the mood in the risk complex. Later in the US data space, MBA’s Mortgage Applications are due in the first turn seconded by the Fed’s Beige Book and the weekly report on US crude oil inventories by the EIA. In addition, FOMC’S L.Brainard (permanent voter, dovish) and Cleveland Fed L.Mester (voter, hawkish) are also due to speak. What to look for around USD The index has finally broken below the solid contention around monthly lows in the 93.00 region. The move lower comes in tandem with increasing hopes of extra stimulus and rising bets of a “blue wave” win at the presidential elections. This view is reinforced by the “lower for longer” stance from the Federal Reserve and hopes of a strong recovery in the global economy despite the second wave of the pandemic threatens to put this idea to the test. US Dollar Index relevant levels At the moment, the index is losing 0.41% at 92.70 and faces immediate contention at 91.92 (23.6% Fibo of the 2017-2018 drop) followed by 91.80 (monthly low May 2018) and then 89.23 (monthly low April 2018). On the other hand, a break above 93.90 (weekly high Oct.15) would expose 94.20 (38.2% Fibo retracement of the 2017-2018 drop) and finally 94.74 (monthly high Sep.25).

Greece Current Account (YoY) up to €0.08B in August from previous €-0.874B

We are going to need trust based on current deal EU wants a deal No deal at any cost EU's attitude has shifted and will not shift not until last day W

“European Union’s (EU) attitude has shifted and will not shift not until last day,” Chief Brexit Negotiator Michel Barnier said on Wednesday. However, the Union is “ready to discuss all subjects on basis of legal text,” he added. Additional quotes We are going to need trust based on current deal EU wants a deal No deal at any cost We will remain firm, determined Will seek necessary compromises until last day possible Framework set out by EU won't change for ambitious deal with the UK What's in play in talks is proper organization of our future relation after divorce We want to have good relations Any international agreement implies binding constraints accepted by both parties Agreement within reach. Time is of the essence and is running out.

The AUD/USD pair refreshed daily tops during the early European session, albeit struggled to capitalize on the move and remained below the 0.7100 mark

AUD/USD gained traction on Wednesday and moved away from Tuesday’s three-week lows.The risk-on mood undermined the safe-haven USD and remained supportive of the move up.Dovish RBA expectations, coronavirus jitters kept a lid on any runaway rally for the major.The AUD/USD pair refreshed daily tops during the early European session, albeit struggled to capitalize on the move and remained below the 0.7100 mark. A combination of supporting factors prompted some short-covering move and assisted the pair to stage a goodish bounce from over three-week lows, around the 0.7020 region set in the previous day. The latest optimism about additional US fiscal stimulus measures remained supportive of the upbeat market mood, which, in turn, undermined the safe-haven US dollar and benefitted the perceived riskier aussie. The US President Donald Trump fueled hopes for a stimulus breakthrough and said that he was willing to accept a larger aid bill despite opposition from his own Republican Party. The comments raised prospects for more government borrowing and sparked a selloff on the US bonds. The lack of demand for government debt exerted some additional downward pressure on the USD and remained supportive. On the economic data front, the initial estimates showed Australian Retail Sales fell 1.5% MoM in September as against a 4% decline recorded in the previous month. The negative reading was largely offset by a solid sales solid 6.8% quarterly growth figures and provided an additional boost to the Australian dollar, assisting the AUD/USD pair to push through 50-hour SMA near the 0.7065 region. However, increasing bets that the RBA will cut interest rates in November held bulls from placing any aggressive bets. Adding to this, concerns that the second wave of coronavirus infection could lead to renewed lockdown measures and prove detrimental for the already fragile global economic recovery further collaborated towards capping the upside for the AUD/USD pair, at least for the time being. This make it prudent to wait for some strong follow-through buying before confirming that the AUD/USD pair might have bottomed out in the near-term and positioning for any further near-term appreciating move. Conversely, bearish traders are likely to wait for a sustained break through the key 0.7000 psychological mark, below which the pair might turn vulnerable to test sub-0.6900 levels. Technical levels to watch  

Maroš Šefčovič, European Commission Vice President of Interinstitutional Relations and Foresight said on Wednesday, “we are still far apart on Brexit.

Maroš Šefčovič, European Commission Vice President of Interinstitutional Relations and Foresight said on Wednesday, “we are still far apart on Brexit.” Additional comments There is no time to lose. Goal is still to reach deal. We will continue to work for deal but not at any price. Deal or no deal withdrawal agreement must be respected. It's a matter of trust, of political responsibility.

ECB’s Lagarde: Price stability is at the centre of the central bank’s work more to come ....

ECB’s Lagarde: Price stability is at the centre of the central bank’s work  more to come ....  

EUR/USD topside is muted by politics and macro. The pair is set to remain in the 1.15-1.19 interval and economists at Danske Bank still forecast euro/

EUR/USD topside is muted by politics and macro. The pair is set to remain in the 1.15-1.19 interval and economists at Danske Bank still forecast euro/dollar at 1.17 on a one-month view. Brexit, US election and the EU budget may culminate in December to move the forecsat to 1.20. Key quotes “EUR/USD topside risk is fading as markets have downgraded their expectations about the European recovery. Spot has shifted from 1.20 to 1.17, European equities are moving sideways and short-term market rates have moved below ECB’s deposit rate. This is in line with our one-month forecast of 1.17 and we expect range trading to continue at 1.15-1.19.” “European COVID-19 data continue to appear EUR-negative and new measures of containment are being taken across EU. This will likely affect net savings by weighing on consumption and investment decisions and weakness is already to be found in credit data. Such measures are at odds with the consensus narrative and a strong EUR.” “Ratifying the EU budget (MFF) has hit a stalemate. The Eastern European countries (primarily Poland) are locked in conflict with EU over the terms of fiscal support in 2021. This conflict may postpone the payments of EU funds to H2 21 and thus delay the recovery. Eventually, the budget should pass, but it is a dent to the consensus story of a coherent EU policy environment. The next European council meeting is on 10-11 December.”  “The value rotation never came. This should gradually mean a reversal in favour of USD, as hedging levels are to move lower and capital flows back from EU to US in 2021.” “A Brexit solution, a Biden win and an EU budget agreement may culminate in December to move EUR/USD to 1.20, which remains our best (and base) case scenario. There is a risk we are too optimistic and if we do not see improvements over December, we expect to shift our one-to-twelve month profile (currently 1.20 on six-month) in favour of USD.”  

EU’s Michel: We want a Brexit deal but not at any cost more to come ...

EU’s Michel: We want a Brexit deal but not at any cost  more to come ...

Copper (LME) is confirming the previously highlighted bull “flag” and is now on the cusp of breaking to new highs. Strategists at Credit Suisse are to

Copper (LME) is confirming the previously highlighted bull “flag” and is now on the cusp of breaking to new highs. Strategists at Credit Suisse are to maintain a bullish outlook while the metal trades above the $6226 support. Key quotes “Whilst support at $6226 holds the outlook remains bullish for strength back to $6875, then $7254/7348 - the high of 2018 and 50% retracement of the 2011/2016 collapse.”  “Below $6226 would negate the ‘flag’ and instead set a top to turn the risk lower, with support then seen next at the 200-day average at $5913.”  

FX Strategists at UOB Group remain bearish on USD/CNH but a drop to 6.6030 looks unlikely in the short-term. Key Quotes 24-hour view: “Yesterday, we h

FX Strategists at UOB Group remain bearish on USD/CNH but a drop to 6.6030 looks unlikely in the short-term. Key Quotes 24-hour view: “Yesterday, we held the view that ‘the decline in USD is oversold but there is room for another down-leg to 6.6580’. Our view was not wrong as USD dropped to a low of 6.6563 before closing on a soft note at 6.6649 (-0.21%). While the weakness in USD has moved ever further into oversold territory, it is not showing any sign of stabilization just yet. Only a break of 6.6750 (minor resistance at 6.6660) would indicate the current weakness has stabilized. Until then, the risk is still for further USD weakness even though a sustained drop below the major support at 6.6450 is unlikely.” Next 1-3 weeks: “We highlighted yesterday (20 Oct, spot at 6.6730) that ‘downward momentum in USD has improved further; next level to focus on is at 6.6450’. USD dropped to a low of 6.6563 during NY hours and closed on a soft note at 6.6647 (-0.21%). While we continue to expect further USD weakness, oversold shorter-term conditions suggest a slower pace of decline. A break of 6.6450 would not be surprising but the next major support at 6.6030 may not come into the picture so soon. Overall, USD is expected to stay under pressure unless it can move above 6.6980 (‘strong resistance’ level was at 6.7050 yesterday).”

The buying pressure around the single currency remains well and sound for yet another session and lifts EUR/USD to new multi-week highs in the 1.1860/

EUR/USD pushes further north of the 1.1800 mark on Wednesday.The selling pressure in the dollar intensifies amidst risk-on mood.ECB-speak Fed’s Beige Book take centre stage later in the session.The buying pressure around the single currency remains well and sound for yet another session and lifts EUR/USD to new multi-week highs in the 1.1860/65 band on Wednesday. EUR/USD stronger on risk appetite, looks to data, USDEUR/USD advances for the fourth consecutive session on Wednesday and consolidates the upside momentum following the recent breakout of the interim hurdle at the 55-day SMA just below 1.1800 the figure. The persistent and strong selling bias surrounding the greenback remains behind the pair’s sharp rebound from last week’s lows in the 1.1690 zone, always fuelled by increasing inflows into the risk complex. Indeed, rising hopes of extra fiscal stimulus in the US economy coupled with consensus around a “blue wave” at the November elections continue to weigh on the buck and drag the US Dollar Index (DXY) to levels last seen in late September near 92.70. Later in the euro docket, the focus of attention will be on the participation of ECB’s C.Lagarde at an ECB Listens event. Additionally, ECB’s board members L.De Guindos and P.Lane are also due to speak. What to look for around EUR EUR/USD extends the bounce off last week’s lows in the 1.1690/85 band and already navigate in multi-week peaks well above 1.1800. The outlook on EUR/USD still remains constructive and bearish moves are deemed as corrective only. Further out, the positive bias in the euro remains underpinned by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), the so far cautious stance from the ECB and the solid position of the EMU’s current account. In addition, the probable “blue wave” following the US elections is deemed as a negative driver for the greenback and carries the potential to lend extra legs to the pair in the longer run. EUR/USD levels to watch At the moment, the pair is gaining 0.30% at 1.1857 and a breakout of 1.1862 (monthly high Oct.21) would target 1.1917 (high Sep.10) en route to 1.1965 (monthly high Aug.18). On the other hand, the next support is located at 1.1688 (monthly low Ot.15) followed by 1.1612 (monthly low Sep.25) and finally 1.1495 (monthly high Mar.9).

USD/TRY has managed to trade in a tight range below the psychological 8.00 handle in the last ten days or so after rising steadily since late August.

USD/TRY has managed to trade in a tight range below the psychological 8.00 handle in the last ten days or so after rising steadily since late August. Economists at Credit Suisse continue to hold a short-term target range of 7.65-7.75 for the USD/TRY pair in the run-up to the central bank’s rate decision on October 22. They assess the response of the lira to different scenarios for the policy rate.  Key quotes “In terms of potential impact on USD/TRY, a hike tomorrow in Turkey’s interest rate structure in the order of 200bps (slightly more than the consensus forecast) will lead to an initial decline in USD/TRY by up to 1% – i.e. to around 7.80 by taking end of Tuesday (20 October) closing levels as a reference. We base our assessment partly on USDTRY’s reaction to the central bank’s surprising rate hike on 24 September.”  “Further declines in USD/TRY (well below 7.80) will require the central bank to ‘deliver’ a follow-up to the rate hike by continuing to raise the effective funding rate on the days after the rate decision, at least at the pace that has been in evidence recently.  “A decision by the central bank to leave the policy rate unchanged would keep USDTRY relatively stable initially, potentially with the help of FX sales by state-owned banks. But it will most likely create underlying lira depreciation pressure which will eventually take USD/TRY above 8.00 over a few days.”  “We stick to a 7.65-7.75 short-term forecast for USD/TRY. This forecast reflects the view that we find a rate hike tomorrow more likely than a no-change outcome. We will re-assess our short-term USD/TRY forecast based on the outcome tomorrow.”  

The offered tone surrounding the greenback dragged the USD/JPY pair to fresh weekly lows, around the 105.20 region during the early European session.

USD/JPY extended overnight retracement from six-day tops amid sustained USD selling bias.The latest optimism about additional US fiscal stimulus measures weighed on the greenback.The upbeat market mood might undermine the safe-haven JPY and help limit the downside.The offered tone surrounding the greenback dragged the USD/JPY pair to fresh weekly lows, around the 105.20 region during the early European session. Following an early uptick to the 105.52 level, the pair met with some fresh supply and extended the overnight retracement slide from six-day tops, around the 105.75 region. The pullback was exclusively sponsored by the prevalent US dollar selling bias and seemed rather unaffected by the upbeat market mood, which tends to undermine the safe-haven Japanese yen. The greenback was pressured by the latest optimism about a pre-election US stimulus package. The US President Donald Trump raised hopes for a stimulus breakthrough and said that he was willing to accept a larger aid bill despite opposition from his own Republican Party. The comments raised prospects for more government borrowing and sparked a selloff on the US bonds. The lack of demand for government debt pressed the key USD Index to one-month lows, which, in turn, was seen as one of the key factors exerting pressure on the USD/JPY pair. Meanwhile, renewed hopes for additional US stimulus boosted investors' confidence and continued driving flows into perceived riskier assets, including equities. The risk-on environment, however, did little to lend any support to the USD/JPY pair, albeit might turn out to be the only factor that might help limit any deeper losses, at least for the time being. There isn't any major market-moving economic data due for release on Wednesday. Hence, developments surrounding the US stimulus will continue to play a key role in influencing the USD price dynamics. This, along with the broader market risk sentiment will assist traders to grab some short-term opportunities. Technical levels to watch  

EUR/USD has been advancing above 1.1850, the highest in a month, after the pair rebounded from the August low at 1.1695. Karen Jones, Team Head FICC T

EUR/USD has been advancing above 1.1850, the highest in a month, after the pair rebounded from the August low at 1.1695. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, has now a positive stance and marks the initial resistance at 1.1871 followed by 1.1971 and 1.2015. Key quotes “EUR/USD has seen a huge rebound from the 1.1695 August low, it has eroded the near-term downtrend and last weeks high at 1.1831. This tips us to a neutral to positive stance.”  “Intraday Elliott wave counts are more positive and above 1.1871 (21st September high) would initiate recovery to 1.1971 and then 1.2014/15.”  “A close above 1.2015 will introduce scope for further gains to 1.2625, the 200-month ma.”  “Dips are like to find intraday support at 1.1810/1.1775. A close below 1.1688 would imply losses to the recent low at 1.1612.”  

Key support at around 0.6550 held overnight but the kiwi remains vulnerable to a retest, according to economists at Westpac. However, the NZD/USD pair

Key support at around 0.6550 held overnight but the kiwi remains vulnerable to a retest, according to economists at Westpac. However, the NZD/USD pair has been fighting back and now trades near its daily high of 0.6624, up 0.6% on the day.  Key quotes “Potential to slip to 0.6550 near-term, amid fragile risk sentiment pre-US election, with a break below that warning of a longer bearish move.”  Multi-month, though, we expect risk sentiment to remain elevated into year-end, supported by unprecedented global central bank and government stimulus, and the USD to resume its weakening trend. That should see NZD/USD above 0.67 by year end.”  

UK Prime Minister (PM) Boris Johnson is expected to make a statement on local restrictive measures on Wednesday, in a bid to contain the intensifying

UK Prime Minister (PM) Boris Johnson is expected to make a statement on local restrictive measures on Wednesday, in a bid to contain the intensifying coronavirus spread, per Reuters. PM Johnson is likely to set out restrictions for Sheffield, Yorkshire. Meanwhile, the UK Housing Minister Robert Jenrick said that he had conversations with South Yorkshire leaders over the serious virus situation there. more to come ...

The US dollar has traditionally been a safe haven. Analysts at Natixis seek to determine whether the USD still plays this safe-haven currency role whe

The US dollar has traditionally been a safe haven. Analysts at Natixis seek to determine whether the USD still plays this safe-haven currency role when risk aversion is high nowadays, and what factors could have changed this role. They see that it has disappeared, at least against the euro, which can be explained by the sharp rise in US external debt, the decline in the dollar’s reserve currency role and the massive monetary expansion in the US. Key quotes “When risk aversion has become high, the dollar has traditionally played a safe-haven currency role, appreciating against the euro. A rise in risk aversion (1998, 2000-2001, 2008-2009, 2012, 2014, 2018-19) has led to an appreciation of the dollar against the euro. The dollar’s safe-haven role stems from the fact that when risk aversion is high (2008, 2012, 2014, 2018-19): Capital flows to the US from OECD countries, particularly from the Eurozone; but capital also flows to the US (the dollar) from emerging countries due to capital outflows.” “The COVID-19 crisis has not given rise to a lasting appreciation of the dollar against the euro; the dollar’s appreciation against emerging currencies has been quite muted. This can be explained by: An economic reason, concern about the rising US external debt; a political reason, the end of dollar purchases by many countries (China, Russia, OPEC).”  

With the stand-off between the European Union (EU) and the UK extending on a Brexit trade deal, GBP/USD is lacking the impetus to take on the upside a

GBP/USD primed for a technical breakout on the daily chart.  RSI stays bullish but 50-DMA is a tough nut to crack.Brexit stand-off extends, as focus shift to a new US stimulus aid.With the stand-off between the European Union (EU) and the UK extending on a Brexit trade deal, GBP/USD is lacking the impetus to take on the upside above the 1.30 level. However, the persistent downbeat mood around the US dollar, in light of the renewed optimism over a likely US fiscal stimulus deal, continues to exert upward pressure on the cable. From a short-term technical perspective, the spot has failed to gain acceptance above the 50-daily moving average (DMA), now at 1.3012, for six straight sessions. Therefore,  daily closing above the 50-DMA barrier could provide the much-needed push to the bulls while also yielding a symmetrical triangle breakout on the daily sticks. The next resistance is placed around 1.3080 levels, the October high, before the buyers eye a break above 1.3100. The 14-day Relative Strength Index (RSI) remains in the bullish area, supporting the case for the additional upside. Alternatively, holding onto a strong support area around 1.2905 is critical. That level is the confluence of the 21-DMA and rising trendline support. Further south, the upward-sloping 100-DMA at 1.2850 could be tested if the latter gives way. GBP/USD: Daily chart GBP/USD: Additional levels  

AUD/USD is correcting lower near-term but is poised towards further upside over the medium-term, according to the Credit Suisse analyst team. On Wedne

AUD/USD is correcting lower near-term but is poised towards further upside over the medium-term, according to the Credit Suisse analyst team. On Wednesday, the aussie is probing intraday high at 0.7090 while keeping pullback moves from one-month low. See: AUD/USD: Australia’s turn for negative rate speculation hits the aussie – MUFG Key quotes “AUD/USD remains in a near-term corrective period, which is likely to extend further in the short-term, but we stay biased for an eventual resumption of the core bull trend following the completion of a large ‘head & shoulders’ base in July.”  “Resistance is seen first at the recent 2020 high at 0.7414, then the cluster of Fibonacci retracements at 0.7574/.7638 – the 38.2% retracement of the entire 2011/2020 bear trend and 78.6% retracement of the fall from 2018 – where we would also expect to see a first attempt to cap. Removal of here though would then open the door to a more significant move higher with scope for a move up to the pivotal psychological inflection point and 2018 high at 0.8000/8136.” “First support is seen at 0.7006/6955. Below here would suggest a washout to support seen at the mid-June low and 200-day average at 0.6791/77.”  

Gold (XAU/USD) extends its three-day winning streak into Wednesday, mainly underpinned by the progress on the US fiscal stimulus talks, which diminish

Gold (XAU/USD) extends its three-day winning streak into Wednesday, mainly underpinned by the progress on the US fiscal stimulus talks, which diminished the haven demand for the US dollar. FXStreet’s Dhwani Mehta eyes Wednesday’s close as the yellow metal is set to see a likely falling wedge breakout on a close above $1913.50. See: Gold needs to clear the $1,973 September high to resume the uptrend – Standard Chartered Key quotes “It remains to be seen if the yellow metal can see a sustained move higher, as the US 10-year Treasury yields hold near four-month highs on the stimulus optimism. President Donald Trump agreed on a large multi-trillion aid bill, in order to clinch a deal ahead of the November 3 election. The stimulus talks are likely to continue later on Wednesday and therefore, the sentiment on the global markets and US dollar dynamics will play a pivotal role for fresh gold trades.”  “As observed in the daily chart, gold has dived out from the three-month-long falling channel formation, with closing above the falling trendline resistance at $1913.50 needed on a daily basis to validate a bullish breakout.” “The downward sloping 50-daily moving average (DMA) at $1925 is likely to challenge the bulls’ commitment in the near-term. A sustained move above the latter could expose the October 12 high of $1933.30, beyond which the psychological $1950 level will come into play.” “Meanwhile, the bullish bias remains intact so long as the price holds above the 21-DMA at $1896. Acceptance below the latter could open floors for a test of the 100-DMA, now aligned at $1877.”  

Here is what you need to know on Wednesday, October 21: Stock and gold rise, the safe-haven dollar falls on hopes that US lawmakers strike a relief pa

Here is what you need to know on Wednesday, October 21: Stock and gold rise, the safe-haven dollar falls on hopes that US lawmakers strike a relief package for the economy. Tensions toward the elections, Brexit talks, and rising eurozone COVID-19 cases are all eyed. Fiscal stimulus: House Speaker Nancy Pelosi reported progress in talks with Treasury Secretary Steven Mnuchin over a new relief package. While differences remain, Eplosi let her deadline lapse and both sides are reportedly drafting a bill.  On the other hand, the New York Times reports that Senate Republicans remain opposed to pushing through an agreement with Democrats as it would split the party and would serve to delay the Supreme Court nomination.Elections: President Donald Trump enjoyed a relatively better day in opinion polls, with national surveys showing a minor narrowing and state polls pointing to tighter races in several battleground states. Nevertheless, FiveThirtyEight and The Economist point, on average, 90% for Joe Biden to become president.  Trump and Biden are set to clash in a televised debate early on Thursday and continue campaigning ahead of the event. Fresh polls are eyed.EUR/USD has been advancing above 1.1850, the highest in a month. Investors are shrugging off rising coronavirus cases in the old continent which have prompted restrictions. Christine Lagarde, President of the European Central Bank, is set to speak later on along with several colleagues. Brexit: The EU and the UK remain in touch but have yet to resume face-to-face negotiations. According to Bloomberg, Brussels wants to give Prime Minister Boris Johnson the optics of a win, while refusing to cede ground. The UK Consumer Price Index came out at 0.5% yearly in September, as expected. On Tuesday, Bank of England member Gertjan Vlieghe said the BOE is leaning toward more stimulus. GBP/USD is trading close to 1.30.Canada releases inflation and Retail Sales figures later in the day. USD/CAD has dipped below 1.31 amid the greenback's weakness. The loonie has also benefited from a moderate increase in oil prices, with WTI surpassing the $41 level. Cryptocurrencies continue their uptrend, with Bitcoin surpassing the $12,000 level seen as resistance.  More 2020 Elections: Seven reasons why this is not 2016, time to focus on the Senate

British Finance Minister Rishi Sunak said on Wednesday that their utmost priority is to protect as many jobs and businesses as possible through this u

British Finance Minister Rishi Sunak said on Wednesday that their utmost priority is to protect as many jobs and businesses as possible through this unprecedented coronavirus pandemic. While commenting on the public finances, Sunak said that “things would have been far worse.” “Government will take the necessary steps to ensure the long-term health of the public finances,” he added.

United Kingdom Public Sector Net Borrowing came in at £35.367B, above forecasts (£32.4B) in September

United Kingdom PPI Core Output (MoM) n.s.a above forecasts (0%) in September: Actual (0.2%)

United Kingdom PPI Core Output (YoY) n.s.a above forecasts (0.1%) in September: Actual (0.3%)

USD/CAD battles 1.3100, down 0.23% intraday, while heading into Wednesday’s European open. In doing so, the loonie pair drops to a multi-day low as up

USD/CAD cheers broad US dollar weakness while testing the lowest since September 08.Hopes of American stimulus, more funds on Biden’s victory favor trading sentiment.Oil prices also gain half a percent and weigh on the pair.Canadian consumer-centric numbers, housing data can offer intermediate moves, relief package talks are the key.USD/CAD battles 1.3100, down 0.23% intraday, while heading into Wednesday’s European open. In doing so, the loonie pair drops to a multi-day low as upbeat trading sentiment weighs on the US dollar. Also pleasing the bears could be the upbeat performance of oil prices, Canada’s biggest export item. However, further selling might catch a breather ahead of Canada’s September month Consumer Price Index (CPI) and New Housing Price Index data for September, as well as Retail Sales for August. Global markets cheer US House Speaker Nancy Pelosi’s first in many days of praise to the coronavirus (COVID-19) relief package talks even if the policymakers miss the 48-hour deadline to the Tuesday night. Positive trading sentiment ignored signals from US Senate Majority Leader Mitch McConnell, shared by CNBC reporter Carl Quintanilla, which threw cold water on Mr. Trump’s increasingly urgent push to enact a new round of pandemic aid before Election Day, per the tweet. Other than the aid package discussions, increasing hopes of Joe Biden’s victory in the US presidential election, followed by a huge pumping of money in the markets, also favor the risk tone. Recent chatters over the fresh start to the Sino-American tussle, if Biden wins, added strength to the upbeat sentiment. While the trade-positive environment supports US stock futures and Treasury yields, it also drags the US dollar index (DXY) down to the lowest since September 21, currently down 0.22% on a day at 92.89. The greenback weakness helps the commodities and backs the WTI’s 0.38% intraday gains despite downbeat inventory data from the American Petroleum Institute (API) published the previous day. That said, the USD/CAD trader may turn cautious ahead of the key economic figures. Forecasts suggest the headlines CPI YoY to grow by 0.4% versus 0.1% prior whereas Retail Sales may remain unchanged with 1.1% monthly growth. On the contrary, the New Housing Price Index is likely to ease from 0.5% previous readouts to 0.3% and may help the countertrend traders. Though, major attention will be given to how the US Congress members manage to break the stimulus deadlock. Technical analysis A clear break of an ascending trend line from September 01, at 1.3115 now, needs validation from a daily closing under 1.3100 to aim for the previous month’s low of 1.2994. Until then, the 61.8% Fibonacci retracement level of last month’s upside near 1.3160 can restrict USD/CAD pullback.  

UK CPI rises 0.5% YoY in Sept vs. +0.5% expected. Monthly UK CPI arrives at +0.4% in Sept vs. +0.5% expected. GBP/USD remains capped below 1.2900 on

UK CPI rises 0.5% YoY in Sept vs. +0.5% expected.Monthly UK CPI arrives at +0.4% in Sept vs. +0.5% expected.GBP/USD remains capped below 1.2900 on the data release.The UK Consumer Prices Index (CPI) 12-month rate came in at +0.5% in September when compared to +0.2% booked in August while matching expectations of a +0.5% print, the UK Office for National Statistics (ONS) reported on Wednesday.    more to come ...

United Kingdom Producer Price Index - Output (YoY) n.s.a meets forecasts (-0.9%) in September

United Kingdom Retail Price Index (MoM) came in at 0.3% below forecasts (0.4%) in September

United Kingdom Producer Price Index - Output (MoM) n.s.a registered at -0.1%, below expectations (0%) in September

United Kingdom Producer Price Index - Input (YoY) n.s.a came in at -3.7%, above expectations (-5.5%) in September

United Kingdom Producer Price Index - Input (MoM) n.s.a above expectations (-0.4%) in September: Actual (1.1%)

United Kingdom Retail Price Index (YoY) below expectations (1.2%) in September: Actual (1.1%)

United Kingdom Core Consumer Price Index (YoY) in line with forecasts (1.3%) in September

United Kingdom Consumer Price Index (YoY) meets forecasts (0.5%) in September

United Kingdom Consumer Price Index (MoM) came in at 0.4%, below expectations (0.5%) in September

USD/JPY is still predicted to navigate between 105.00 and 106.00 in the short-term horizon, noted FX Strategists at UOB Group. Key Quotes 24-hour view

USD/JPY is still predicted to navigate between 105.00 and 106.00 in the short-term horizon, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “USD rose to a high of 105.74 yesterday before easing off to close little changed at 105.49 (+0.07%). The price actions were in line with our expectation wherein ‘a break of 105.70 is not ruled out but a sustained advance above this level appears unlikely’. The mild upward pressure has eased and the current movement is viewed as part of a consolidation phase, In other words, USD is likely to trade sideways for today, expected to be between 105.25 and 105.65.” Next 1-3 weeks: “Last Thursday (15 Oct, spot at 105.20), we indicated that USD ‘has to close below 104.70 before a sustained decline can be expected’. USD subsequently traded in a quiet manner and the mild downward pressure has eased. Momentum indicators are mostly neutral and USD could trade between 105.00 and 106.00 for now.”

The Bank of Japan (BOJ) policymaker is back on the wires now, via Reuters, noting that the central bank will decide whether to extend emergency stimul

The Bank of Japan (BOJ) policymaker is back on the wires now, via Reuters, noting that the central bank will decide whether to extend emergency stimulus measures by looking at developments regarding the coronavirus pandemic.  developing story ...

Open interest in Natural Gas futures markets shrunk for yet another session on Tuesday, this time by nearly 4K contracts in light of advanced prints f

Open interest in Natural Gas futures markets shrunk for yet another session on Tuesday, this time by nearly 4K contracts in light of advanced prints from CME Group. Volume followed suit and dropped for the second session in a row, this time by around 47.1K contracts. Natural Gas: The $3.00 mark is just around the corner Prices of Natural Gas quickly left behind the $2.90 mark per MMBtu on Tuesday and kept pushing higher. While a move to the key barrier at the $3.00 level remains well on the cards, shrinking open interest and volume favour a correction lower in the very near-term.

Italian Economy Minister Roberto Gualtieri said that he believes that if Italy will be able to contain a new wave of COVID-19 infections then the 2021

Italian Economy Minister Roberto Gualtieri said that he believes that if Italy will be able to contain a new wave of COVID-19 infections then the 2021 GDP could be better than expected. Additional quotes “Has always been in favor of the use of the ESM recovery fund, any savings in interest costs are an economic advantage.” “Success on Tuesday of the bond sale to fund sure scheme shows that the EU common debt issues must become permanent instruments.” Market reaction EUR/USD was last seen adding 0.22% on the day at 1.1845, unperturbed by the above comments. The spot sits at monthly tops of 1.1849 amid broad US dollar weakness.

Gold steps back from the intraday top while declining to $1,917.28 during the pre-European session on Wednesday. Even so, the bullion marks 0.57% intr

Gold eases from the intraday high of $1,920.58.Sellers will look for entries below a three-week-old support line.Monthly top offers an additional upside hurdle to the bulls before the key horizontal resistance.Gold steps back from the intraday top while declining to $1,917.28 during the pre-European session on Wednesday. Even so, the bullion marks 0.57% intraday gains while keeping its upside break of 200-bar SMA. With the strong RSI conditions, not near the overbought levels around 70, favoring the commodity’s further upside, gold buyers can easily overcome the $1,921 immediate hurdle. However, the monthly high near $1,933 can probe the bulls afterward, which if broken can direct the gold prices towards the mid-September high, also comprising multiple peaks marked since the late-August, close to $1,973/74. Meanwhile, 200-bar SMA near $1,912 precedes the $1,900 threshold to challenge short-term sellers. Also acting as the immediate key support is an upward sloping trend line from September 28, at $1,897 now. Should the gold bears dominate past-$1,897, the current month’s low near $1,873 could regain market attention. Gold four-hour chart Trend: Bullish  

The European Commission is ready to react with new economic measures, if necessary, in the face of the sudden pick-up in coronavirus infections in Eur

The European Commission is ready to react with new economic measures, if necessary, in the face of the sudden pick-up in coronavirus infections in Europe, the newly appointed Trade Commissioner and the Commission’s Executive Vice-President Valdis Dombrovskis told a daily on Wednesday. He added that the new surge in COVID-19 cases in Europe and new restrictive measures will "certainly have an effect" on the autumn economic forecast. Related readsECB’s Lagarde: Coronavirus resurgence is a 'clear risk' to the economic outlookEUR/USD hits monthly high near 1.1850 even as Treasury-yields rise

In opinion of FX Strategists at UOB Group, AUD/USD risks further downside in the near-term although a breach of the 0.7005 levels looks out of favour

In opinion of FX Strategists at UOB Group, AUD/USD risks further downside in the near-term although a breach of the 0.7005 levels looks out of favour for the time being. Key Quotes 24-hour view: “We expected AUD to weaken yesterday but held the view that ‘any weakness in AUD is unlikely to challenge last month’s low near 0.7005’. We highlighted that ‘0.7025 is already quite a strong level’. Our view was not wrong as AUD dropped to a low of 0.7021 before rebounding. While downward pressure has eased somewhat, it is too soon to expect a sustained recovery. For today, AUD is likely to consolidate and trade between 0.7030 and 0.7095.” Next 1-3 weeks: “We have held the same view since last Friday (16 Oct, spot at 0.7080) wherein AUD ‘could weaken further but odds for break of last month’s low near 0.7005 are not high’. AUD dropped to a low of 0.7021 yesterday (20 Oct) before recovering. Downward momentum has improved, albeit not by much. While we continue to see 0.7005 as a solid support, we are not ruling out a break of this level. That said, it is left to be seen if AUD can maintain a foothold below this level. Overall, the current downward pressure is deemed as intact as long as AUD does not move above 0.7130 (‘strong resistance’ level was previously at 0.7145). Looking forward, the next support below 0.7005 is at 0.6980.”

The unexpected and early rise in the coronavirus cases across Europe poses a clear risk to the economic outlook, European Central Bank (ECB) President

The unexpected and early rise in the coronavirus cases across Europe poses a clear risk to the economic outlook, European Central Bank (ECB) President Christine Lagarde said in a pre-recorded interview with France’s LCI on Tuesday evening.  Key quotes “Most scientists in the euro zone were expecting the resurgence of the epidemic in November or December, with the cold.”   “It’s come earlier, and from that point of view that has surprised. It’s not a good omen.”   more to come ...

CME Group’s flash data for Crude Oil futures markets noted open interest shrunk by nearly 4.1K contracts on Tuesday, clinching the fourth consecutive

CME Group’s flash data for Crude Oil futures markets noted open interest shrunk by nearly 4.1K contracts on Tuesday, clinching the fourth consecutive daily drop. Volume, instead, went up for the second straight session, now by around 44.2K contracts. WTI now looks to $42.00 Prices of the barrel of WTI briefly tested the vicinity of the $42.00 level on Tuesday. The move up, however, was in tandem with diminishing open interest, supporting the idea that short covering is fuelling the upside. That said, a move to $42.00 and potentially above is not ruled out in the very near-term horizon ahead of a probable correction lower.

Asian equities trade mostly positive as global markets cheers increasing hopes of the US coronavirus (COVID-19) stimulus. This contrast to the policym

Asian shares cheer nearness to the US aid package, expectations of fresh start to the US-China ties.BOJ’s Sakurai sounds skeptic, Aussie Retail Sales recovered in September.South Korean PPI stays mixed the previous month, Hong Kong Q3 Jobless Rate surged to the highest in 16 years.Sino-Indian relations can improve on the latest gesture of the Delhi government.Asian equities trade mostly positive as global markets cheers increasing hopes of the US coronavirus (COVID-19) stimulus. This contrast to the policymakers’ inability to match the Tuesday-night deadline as well as Senate Majority Leader Mitch McConnell’s refrain from respecting US President Donald Trump’s push for the early aid package. Also read: S&P 500 Futures remain firm around mid-3,400s as US aid package talks intensify That said, MSCI’s index of Asia-Pacific shares, ex-Japan, rises 0.46% intraday while Japan’s Nikkei 225 also prints near 0.50% gains amid expectations of further monetary easing from the BOJ. Other than the chatters over the US relief package discussions, trading sentiment also improves on expectations that Joe Biden’s more likely victory will offer a fresh start to the Sino-American relations. Further, India’s returning of the Chinese soldier, who was lost a few days back, also eases the New Delhi-Beijing tensions and favor market optimists. On the data front, Preliminary readings of Australian Retail Sales for September recovered from -4.0% to -1.5% whereas South Korea’s Producer Price Index (PPI) eased on MoM but bounced off -0.5% YoY in the previous month. Further, the South China Morning Post (SCMP) came out with the news conveying the highest unemployment in Hong Kong in 16 years during the last three months to September 2020. Not only the equities but WTI and the US treasury yields also track Wall Street’s upbeat performance. However, stocks in China, Indonesia and New Zealand print mild losses to buck the trend. The moves could be traced to the respective currency gains. Moving on, a light calendar in the US and no major data in Asia keeps US aid package negotiations in the spotlight.

FX option expiries for Oct 21 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1800 997m - GBP/USD: GBP amounts 1.

FX option expiries for Oct 21 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1800 997m - GBP/USD: GBP amounts         1.2900 312m 1.3050 231m - USD/JPY: USD amounts          105.00 1.2bn 105.10 760m 105.50 1.3bn 105.90 510m 105.98 424m 106.00 1.3bn 106.65 1.0bn - USD/CAD: USD amounts         1.3000 800m - NZD/USD: NZD amounts 0.6575 221m  - EUR/GBP: EUR amounts 0.9165 431m

According to the latest report published by the United Nations Conference on Trade and Development (UNCTAD), global trade rebounded in the third quart

According to the latest report published by the United Nations Conference on Trade and Development (UNCTAD), global trade rebounded in the third quarter but the outlook remains uncertain amid COVID-19 pandemic-induced economic disruptions. Key takeaways “The value of global trade is set to fall by 7% to 9% in 2020 from the previous year, despite signs of a fragile rebound led by China in the third quarter.” “Global trade recovered somewhat in the third quarter, when it was estimated at about 4.5% less than in the same period a year ago.” “Trade in home office equipment and medical supplies has increased in Q3, while it further weakened in the automotive and energy sectors.” “Its preliminary forecast put year-on-year growth for Q4 2020 at 3% less.” "Overall, the level of Chinese exports for the first nine months of 2020 was comparable to that of 2019 over the same period."

Cable is seen trading on a defensive stance and below the 1.3050 level for the time being, suggested FX Strategists at UOB Group. Key Quotes 24-hour v

Cable is seen trading on a defensive stance and below the 1.3050 level for the time being, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “Yesterday, we held the view that GBP ‘could continue to trade in a choppy manner, likely between 1.2900 and 1.3020’. The sudden decrease in volatility came as a surprise as GBP traded in a quiet manner and within a relatively narrow range (between 1.2911 and 1.2979). The price action offers no fresh clues and for today, GBP is likely to trade sideways, expected to be within a 1.2910/1.3010 range.” Next 1-3 weeks: “Last Friday (16 Oct, spot at 1.2905), we held the view that GBP ‘is likely to trade on a slightly defensive mode with 1.3050 acting as a strong resistance’. GBP rose to a high of 1.3024 yesterday (19 Oct) and while downward pressure has eased, only a break of 1.3050 would indicate that GBP is not ready to test the major support at 1.2845. In other words, there is no change in our view for now. That said, in order to rejuvenate the current flagging momentum, GBP has to move and stay below 1.2900 within these 1 to 2 days or the odds for a test of 1.2845 would diminish quickly.”

Traders increased their open interest positions for the fourth consecutive session on Tuesday, this time by just 723 contracts according to preliminar

Traders increased their open interest positions for the fourth consecutive session on Tuesday, this time by just 723 contracts according to preliminary readings from CME Group. Volume, in the same line, rose by around 1.5K contracts, reaching the second consecutive daily build. Gold now looks to $1,933/ozGold prices extend the march north amidst rising open interest and volume. Against this, there is the probability for the continuation of this move to, initially, the monthly peak around $1,933 per ounce (October 12).

USD/INR fails to keep the previous day’s upside momentum revisits sub-73.50 area. Normal RSI conditions join a lack of clear direction from the latest

USD/INR fails to keep the previous day’s upside momentum revisits sub-73.50 area.Normal RSI conditions join a lack of clear direction from the latest candlestick formations.Bulls can stay hopeful unless breaking one-month-old support line, previous resistance.USD/INR drops to 73.38, down 0.12% intraday, amid the initial hour of the Indian session. In doing so, the quote reverses the previous day’s upside momentum while also printing indecision based on the daily candlesticks. Other than the mixed signals flashed by spinning tops marked on Monday and Tuesday, RSI conditions are also against any trend change, which in turn suggests a sideways movement. Though, the pair’s ability to stay beyond a falling trend line from September 24, at 73.27 now, keeps the USD/INR bulls hopeful of attacking the monthly high near 73.65. It should, however, the noted that USD/INR rise past-73.65 will be probed by 50% and 61.8% Fibonacci retracement of August 20 to September 01 downside, respectively around 73.95 and 74.25. Alternatively, a downside break below 73.27 will quickly recall the 73.00 threshold on the chart. In a case the psychological magnet fails to stop the USD/INR bears, the previous month’s low close to 72.75 will gain the market’s attention. USD/INR daily chart Trend: Sideways  

FX Strategists at UOB Group noted EUR/USD’s outlook remains constructive although a move to 1.19 appear unlikely for the time being. Key Quotes 24-hou

FX Strategists at UOB Group noted EUR/USD’s outlook remains constructive although a move to 1.19 appear unlikely for the time being. Key Quotes 24-hour view: “We highlighted yesterday that ‘there is scope for EUR to test 1.1805 first before a more sustained pull-back can be expected’. We added, ‘the next resistance is at 1.1830’. The subsequent EUR strength exceeded our expectation as it soared to a high of 1.1840. The rapid advance over the past couple of days is deeply overbought now but robust momentum suggests there is room for EUR to stage another push higher to 1.1865. For today a break of the major resistance at 1.1900 is unlikely. Support is at 1.1800 followed by 1.1780.’ Next 1-3 weeks: “EUR rose to a high of 1.1840 before closing on a relatively firm note at 1.1821 (+0.47%). Upward momentum is beginning to improve and the bias from here is titled to the upside. That said, in view of the nascent build-up in momentum, the major resistance at 1.1900 may not come into the picture so soon. Support is at 1.1780 but only a break of 1.1745 (‘strong support’ level) would indicate that the current upward pressure has eased.”

The cost of living in the UK as represented by the Consumer Price Index (CPI) for September month is due early on Wednesday at 06:00 GMT. The key infl

The UK CPIs Overview The cost of living in the UK as represented by the Consumer Price Index (CPI) for September month is due early on Wednesday at 06:00 GMT. The key inflation data will pave the way for market forecasts despite the current Brexit drama and the US stimulus headlines that dim the charm of the crucial economic releases. The headline CPI inflation is expected to recover from 0.2% prior to 0.5% on an annual basis. The Core CPI that excludes volatile food and energy items can also follow the suit with market forecasts suggesting 1.3% YoY print versus 0.9% previous readouts. Talking about the monthly figures, the CPI could reverse the previous -0.4% figures with a +0.5% level. In this regard, analysts at TD Securities said, We look for core CPI to rebound in September as the government's EOHO incentives came to an end, rising from 0.9% y/y to 1.3% y/y (market forecast 1.3%). Outside of that rebound we expect core trends to remain quite subdued, reflecting the downside surprises we've seen across most of Europe. This should leave headline CPI rebounding to about 0.6% y/y (market forecast 0.6%), which is above the BoE's near-term forecasts from the August MPR. However, the BoE will continue to be focused on the impact of the worsening pandemic and second-wave restrictions, and what it means for economic activity and medium-term inflation, rather than current inflation prints.  Deviation impact on GBP/USD Readers can find FXStreet's proprietary deviation impact map of the event below. As observed, the initial market reaction is likely to remain confined between 15 and 80 pips in deviations up to 2 to -3. The same suggests the importance of the key inflation data for GBP/USD pair traders.   How could it affect GBP/USD? By the press time of pre-London open on Wednesday, GBP/USD cheers the broad US dollar weakness, amid risk-on mood, to mark 0.23% intraday gains while taking the bids near 1.2980. The pair has mainly cheered the US dollar weakness as the DXY lacks safe-haven buying amid notable progress in the American coronavirus (COVID-19) relief package talks. The US dollar index (DXY) drops the lowest since September 21, down 0.20% intraday to 92.90, by press time. Also favoring the GBP/USD buyers are speculations that the European Union’s (EU) recently soft stand cuts the odds for no-deal Brexit. It should also be noted that recently bearish statements from the Bank of England (BOE) policymakers also highlight the importance of today’s inflation data. Should the prices offer a surprise drop, the BOE’s bearish bias may get additional support and can weigh on the quote for the short-term. Though, the actual impact could also depend upon how weak the US dollar is at the time. Technically, GBP/USD remains positive for the fourth day in a row while keeping Monday’s upside break of the 50-day EMA. As a result, buyers can aim for the falling resistance line from September 01, at 1.2995 now. Meanwhile, a one-month-long support line near 1.2890 offers an extra back-up to the GBP/USD bulls even if they fail to bounce off the 50-day EMA level of 1.2935. Key notes GBP/USD Forecast: Waiting for a clearer Brexit picture GBP/USD Price Analysis: Stays above 50-day EMA while attacking 1.2950 About the UK CPIs The Consumer Price Index released by the Office for National Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of GBP is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or Bearish).

EUR/USD is gaining altitude, with the US dollar struggling to draw bids despite the uptick in the treasury yields and dovish European Central Bank (EC

The US aid optimism powers EUR/USD to one-month highs.Markets cheer risk-on and ignore the rise in treasury yields. Uptrend prone to sudden pause/pullback, as the ECB is under pressure to boost stimulus. EUR/USD is gaining altitude, with the US dollar struggling to draw bids despite the uptick in the treasury yields and dovish European Central Bank (ECB) expectations.  The pair is currently trading at 1.1847, the highest level since Sept. 21, having picked up a bid below 1.17 on Oct. 15.  US yields rise, but dollar drops The US 10-year treasury yield is hovering at 0.81%, the highest level in over four months. The benchmark yield has gained 12 basis points since hitting a low of 0.69% on Oct. 15.  Further, the spread between the US and German 10-year bond yields has increased to a seven-month high of 141.8 basis points.  So far, however, rising borrowing costs and yield differential has been ignored by forex traders. The dollar index, which tracks the greenback's value against majors, is down nearly 0.9% this week, and EUR/USD has gathered upside steam, as noted earlier.  The yields are rising along with stocks amid renewed expectations for an additional US fiscal stimulus deal, which would cause the widening of the already record budgetary gap.  And while markets are currently cheering the risk-on by offering the safe-haven dollar, the focus may shift to rising yields after some time, following which EUR/USD would come under pressure - more so, as the ECB is expected to ramp up stimulus in December. The US-Eurozone inflation differential has recently widened, with the common currency bloc's inflation falling into the negative territory. Put simply, the ECB is under pressure to do more. The data calendar is light on Wednesday. ECB's President Lagare is likely to sound dovish during her speech at 07:30 GMT. During the US session, the focus will be on Federal Reserve's Chairman Powell's speech.  Technical levels    

Japan is opposed to any actions that escalate tensions in the South China Sea, the Prime Minister (PM) Yoshihide Suga said on Wednesday. Key quotes Ag

Japan is opposed to any actions that escalate tensions in the South China Sea, the Prime Minister (PM) Yoshihide Suga said on Wednesday. Key quotes Agreed with Indonesia to make arrangements towards re-opening business travel. To help build up infrastructure across into-pacific. We'd like to re-emphasise need for peaceful solution to issues in South China Sea. We are not thinking of creating an Asian version of NATO. Japan's 'free and open Indo-pacific' initiative targets no particular country. No change to Japan’s policy to actively engage in Indo-pacific, including ASEAN under my administration. Japan is determined to defend its territory, territorial waters. All countries involved in the South China Sea need to make efforts together for peace.

AUD/USD refreshes intraday high to currently around 0.7080 during early Wednesday. The pair recently crossed a downward sloping trend line from Octobe

AUD/USD probes intraday high while keeping pullback moves from one-month low.A falling trend line from October 09 is on the bull’s radars.Bears will look for a clear downside break of 0.7050/45 for fresh entries.Progress in the US stimulus talks favors trading sentiment.AUD/USD refreshes intraday high to currently around 0.7080 during early Wednesday. The pair recently crossed a downward sloping trend line from October 14 and 100-HMA amid bullish MACD. Considering the pair’s status as a risk barometer, the recent optimism surrounding the US stimulus package helps the buyers. Hence, a sustained trading above the previous resistance line, also the key HMA, helps AUD/USD buyers to aim for another descending trend line barrier near 0.7100. However, a 200-HMA level of 0.7135 could restrict the quote’s further upside past-0.7100. Meanwhile, a downside break below the previous resistance line, at 0.7070 now, will aim for the immediate support line, currently around 0.7050. Also challenging the AUD/USD bears is an upward sloping trend line from June, near 0.7045, which holds the gate for additional south-run towards the 0.7000 threshold. AUD/USD hour chart Trend: Further upside expected  

The West Texas Intermediate (WTI) crude, the North American oil benchmark, is currently trading at $41.55, representing a 0.36% decline on the day. Th

WTI recovers from session lows and eyes resistance of Sept. 18 high of  $41.72. Daily chart indicators favor a breakout above the key hurdle. The West Texas Intermediate (WTI) crude, the North American oil benchmark, is currently trading at $41.55, representing a 0.36% decline on the day. The black gold has recovered from the session low of $41.12 and is fast approaching resistance at $41.72 (Sept. 18 high).  While the bulls failed to establish a foothold above that level on Monday, they ended up carving out a bullish outside day candle. That, coupled with the above-50 or bullish reading on the 14-day relative strength index and the positive value on the MACD histogram, suggests scope for a breakout above $41.72. That would expose the 2020 high of $43.78 reached on Aug. 26.  A bearish reversal would be confirmed if the resistance at $41.72 holds and sends prices back below Tuesday's low of $40.46.  Daily chartTrend: Bullish above $41.72 Technical levels    

According to the latest coronavirus statistics released by Germany’s Robert Koch Institute (RKI), the European powerhouse reported 5,186 new infection

According to the latest coronavirus statistics released by Germany’s Robert Koch Institute (RKI), the European powerhouse reported 5,186 new infections on Wednesday. The total tally stands now stands at 380,762. The deaths rose by 26, with the total count seen at 9,875. The daily death rise, however, eased when compared with Tuesday’s +47.   more to come ...

Goldman Sachs said Monday in a note that a "blue wave" of victories in next month's US Presidential Elections that would give Democrats control of bot

Goldman Sachs said Monday in a note that a "blue wave" of victories in next month's US Presidential Elections that would give Democrats control of both houses of parliament could lead to a whopping $2.5 trillion new stimulus plan. Key quotes (Source: Bloomberg) The stimulus plan would likely include a stimulus package in Q1, followed by infrastructure and climate legislation. In this scenario, we would expect legislation expanding health and other benefits, financed by tax increases, to pass in Q3. The boost to growth from fiscal stimulus would outweigh the adverse effects of tax increases, particularly because the increased tax revenue would finance fund new spending. The spending would only widen the already record budget gap, putting upward pressure on borrowing costs. The US 10-year yield rose to a high of 0.80% early Thursday, the highest level since June 10.
 

Rating agency Fitch said on Wednesday that New Zealand's fiscal prudent management will mitigate risks associated with a potential rise in public spen

Rating agency Fitch said on Wednesday that New Zealand's fiscal prudent management will mitigate risks associated with a potential rise in public spending over the next few years.  Key quotes New Zealand's election gives Labour stronger control over policy. The resurgence of coronavirus in New Zealand could stall economic recovery and add further pressure to public finances. Election outcome reinforces the expectation that fiscal policy will evolve in line with PREFU. The prime minister of New Zealand, Jacinda Ardern, won elections last Saturday, delivering the biggest victory for the center-left Labour Party in half a century, according to The Telegraph online. 

Gold (XAU/USD) buyers are finally extending their control above $1900, rejoicing the renewed optimism over the US fiscal stimulus. The safe-haven US d

Gold (XAU/USD) buyers are finally extending their control above $1900, rejoicing the renewed optimism over the US fiscal stimulus. The safe-haven US dollar wilts amid a risk-on market mood after US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin moved closer to an agreement on a fresh coronavirus relief package late Tuesday. Markets remain hopeful that the stimulus deal will be clinched ahead of the November election and the new funds will boost the demand for gold as an inflation hedge. The stimulus talks are likely to continue this Wednesday. Let’s take a look at how gold is positioned on the charts. Gold: Key resistances and supports The Technical Confluences Indicator shows that the yellow metal has recaptured critical resistances and now looks to take on the next minor cap at $1925, which is the confluence of the pivot point one-day R2 and SMA50 one-day. Further north, the bulls will test a soft upside barrier at $1929 (pivot point one-week R1), opening doors for a test of the critical resistance at $1939, the Fibonacci 61.8% one-month. To the downside, $1915 is strong support, which the convergence of the previous day high and Fibonacci 61.8% one-week. A break below the last support, the SMA50 on four-hour at $1909 could offer some reprieve to the bulls. Acceptance below the latter could challenge the bears’ commitment at $1905, the meeting point of the Fibonacci 38.2% one-month, SMA5 one-day and previous low on four-hour.   Here is how it looks on the tool   About Confluence Detector The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies. Learn more about Technical Confluence

GBP/JPY is currently trading near resistance at 136.74, representing a 0.10% gain on the day, having picked up a bid at 136.39 early Wednesday. The re

GBP/JPY tests confluence of key technical levels at 136.74. A move above Oct. 19's high is needed to confirm a breakout.GBP/JPY is currently trading near resistance at 136.74, representing a 0.10% gain on the day, having picked up a bid at 136.39 early Wednesday.  The resistance at 136.74 marks the confluence of the 10-day simple moving average (SMA) and the 38.2% Fibonacci retracement of the sell-off from the Sept. 1 high of 142.71 to Sept.22 low of 133.04.  Acceptance above that level would expose the Oct. 19 high of 137.26. A close higher would invalidate the bearish view put forward by the long tail attached to Oct. 19's daily candle and yield stronger gains.  Alternatively, a failure to take out resistance at 136.74, if followed by a move below 136.39 (Asian session low) would confirm a reversal lower, and open the doors to 135.74 (Oct. 16 low).  Daily chartTrend: Neutral Technical levels    

Recent milk price forecasts from the Bank of New Zealand (BNZ) flashes positive signals for the New Zealand dollar (NZD). The kiwi bank revised up its

Recent milk price forecasts from the Bank of New Zealand (BNZ) flashes positive signals for the New Zealand dollar (NZD). The kiwi bank revised up its 2020/21 prediction from NZD 6.5 per kilogram (KG) to 6.8 recently. Earlier, the global leader in the dairy industry, Fonterra also increased their expectations for milk prices while marking the NZD 6.8 level for the said period. It’s worth mentioning that as per the latest fortnightly data from the Global Dairy Trade, the prices of the Whole Milk Powder (WMP) also grew 0.3%. Market implications NZD/USD pierces 0.6600, up 0.42% intraday, by press time of early Wednesday. New Zealand’s economy depends majorly on the dairy industry and hence any positive news for the same can help the NZD bulls. Also adding to the pair’s upside momentum could be the recently increased odds of the US coronavirus (COVID-19) stimulus. Read: NZD/USD Price Analysis: Defensive Bears moving to breakeven

Analysts at Deutsche Bank offer probable outcomes of the November US Presidential election and their impact on the Chinese yuan against the greenback.

Analysts at Deutsche Bank offer probable outcomes of the November US Presidential election and their impact on the Chinese yuan against the greenback. Key quotes “A Biden win in the US presidential election would lead to a weaker USD/yuan, irrespective of which party controls the Senate.” “If Biden wins but the Senate stays in the hands of the Republicans, the result is less aggressive fiscal policy but likely places more pressure on Fed to ease again. Thus, meaning more pressure for CNY strength.” “If Biden wins and Senate majority switches to Democrats, it would result in larger fiscal stimulus, which would weigh on USD/yuan and also would boost EUR and yen.“ "If China and the US still embrace the 'decoupling' momentum set in train by Trump, this is negative for USD reserve accumulation and enhances the spillover from USD/CNY onto strength in other reserve currencies."

The US 10-year treasury yield jumped to multi-month highs on Wednesday, extending a four-day rising trend. The yield rose to 0.80%, the highest level

The US 10-year treasury yield jumped to multi-month highs on Wednesday, extending a four-day rising trend.  The yield rose to 0.80%, the highest level since June 10, representing an 11 basis point gain on the low of 0.69% observed on Oct. 15, according to data source TradingView.  The US fiscal largesse looks to be putting upward pressure on yields. The nation's budget gap tripled to a record high of $3.1 trillion in the year ended Sept. 30 as the government rolled out stimulus programs to counter the coronavirus-induced economic slowdown.  Besides, with the US planning to deliver additional stimulus soon, the budget gap will widen further. As such, yields could continue to rise and potentially attract bids for the US dollar.  That said, so far, the dollar has struggled to cheer the recent rise in yields. The dollar index, which tracks the greenback's value against majors, is currently trading at 92.99, the lowest level since Sept. 21.

Bank of Japan’s (BOJ) policymaker Makoto Sakurai continues to throw more light on the monetary policy and inflation outlooks in his scheduled speech t

Bank of Japan’s (BOJ) policymaker Makoto Sakurai continues to throw more light on the monetary policy and inflation outlooks in his scheduled speech this Wednesday. Key quotes “Monetary policy, albeit indirectly, can help the economy make structural changes.” “Japan will see an increase in bankruptcies, job losses and fall in potential growth if it takes longer than expected to contain the pandemic.” “If banks become saddled with more bad loans, their financial health may be hurt and lead to a decline in the financial system's functioning.” “If financial system risks heighten, that could weigh on the real economy.” “Japan financial institutions have sufficient buffers now but BOJ must be prepared to take necessary, swift action with an eye on the economy, financial system.” “Near-term challenge for monetary policy is to support efforts toward striking a balance between the need to contain the pandemic, prop up the economy.” “Medium-, long-term challenge in guiding monetary policy is to ensure Japan’s financial system remains stable.” “BOJ must underpin inflation expectations, ensure they are in positive territory, as the private sector may hold off on spending if the project price falls ahead.” “BOJ’s pledge to maintain an accommodative monetary policy, increase monetary base until inflation stably hits its target playing a crucial role in supporting the economy.” “Japan prices coming under strong downward pressure, inflation may not accelerate much even after price growth turns positive.” “Sluggish price growth is something not unique to Japan, issue has become a common problem for major advanced economies. “ “Question of why inflation no longer accelerating is something that needs to be looked into anew sincerely.” USD/JPY slides to session lows within narrow range as US dollar melts  

Silver takes the bids near $24.99, an intraday high of $25.02, during the early Wednesday’s trading. In doing so, the white metal rises for the third

Silver refreshes one week high after crossing a descending trend line from September 15.Bullish MACD, successful trading above 100-day SMA offer conviction to buyers.Silver takes the bids near $24.99, an intraday high of $25.02, during the early Wednesday’s trading. In doing so, the white metal rises for the third consecutive day, while also refreshing the one week high, as it breaks a short-term falling resistance line. Not only the sustained break of the previous resistance but bullish MACD and the bullion’s ability to stay beyond 100-day EMA also favors the buyers. As a result, silver bulls are raging for the monthly high of $25.56 ahead of targeting the early-September lows near $25.85. During the metal’s upside past-$25.85, the $26.00 round-figure holds the key to a run-up towards the 10-week-old resistance line around $27.00. Alternatively, the commodity’s pullback below the $24.80 support line will highlight an upward sloping trend line from September 24, at $24.00 now, before directing the silver sellers towards the 100-day SMA level of $23.07. Silver daily chart Trend: Bullish  

USD/JPY is about flat on the day at 105.39 at the time of writing. The US dollar has been bleeding out which is giving the bears the edge, however. Th

USD/JPY bears taking the reins as the dollar slides.The clock is ticking, US stimulus talks will continue later today. USD/JPY is about flat on the day at 105.39 at the time of writing. The US dollar has been bleeding out which is giving the bears the edge, however. The US stimulus saga continues and it is up in the air just as it ever was. The US House Speaker Pelosi said she’s optimistic a deal could be reached, but there is no realisation of such sentiment. The clock is ticking, yet talks will continue later today.  Senate Majority Leader McConnell said if a comprehensive stimulus package comes to the Senate that has been passed by the House and is backed by President Trump, “we would consider it”. Meanwhile, the Republican Senator Thune said that “it would be hard” to find enough GOP members to back a $1.8 trillion stimulus and an after the bell comments from the White House chief of staff Mike Meadows said the sides still had a way to go.   US 2-year Treasury yields remained around 0.15%, while the 10-year yield rose from 0.76% to 0.79%.  Meanwhile, global COVID-19 case numbers have now topped 40 million which is keeping risk appetite at bay. ''The recent resurgence putting pressure on European policymakers to intensify restrictions, and in the US ensuring that COVID-19 remains front and centre as the election approaches,'' analysts at ANZ Bank explained. ''Large swathes of the UK are now under the most severe Tier 3 rules, feeding expectations of additional monetary policy easing.'' USD/JPY levels  

The dollar index (DXY), which gauges the greenback's value against major currencies, is extending its three-day losing streak. At press time, the DXY

Dollar index hits multi-week lows below 93.00 as S&P 500 futures rise. The greenback extends a three-day losing streak amid improved risk appetite. Rising treasury yields, however, are cause for concern for dollar bears. The dollar index (DXY), which gauges the greenback's value against major currencies, is extending its three-day losing streak.  At press time, the DXY is trading at 92.97, the lowest level since Sept. 21, representing marginal losses on the day. The index fell by nearly 0.4% on Tuesday to register losses for the third straight day.  Renewed expectations for additional US fiscal stimulus and coronavirus vaccine before the end of the year-end put a bid under the US and global stocks on Tuesday, weakening the haven demand for the greenback.  The futures tied to the S&P 500 are currently signaling continued risk-on action with 0.34% gains and keeping the US dollar on the defensive.  That said, big losses may remain elusive, as the US fiscal largesse is positive for treasury yields. The 10-year Treasury yield is currently trading at 0.80%, the highest level since June 10.  Further, the European Central Bank and the Reserve Bank of Australia are expected to ramp up stimulus over the next two months. Put simply, major currencies like the EUR and AUD may have a tough time rallying against the greenback and other currencies.  Technical levels  

S&P 500 Futures ease from the intraday high around 3,450 to 3,446 during early Wednesday. Even so, the risk barometer prints a 0.40% gain on a day whi

S&P 500 Futures keep the previous day’s recovery moves amid stimulus hopes.Pelosi terms latest talks offering more clarity but McConnell probes expectations of early stimulus.Virus woes in Europe, allegations on the US President Donald Trump, Washington-Pyongyang tussle offer background music to the risks.S&P 500 Futures ease from the intraday high around 3,450 to 3,446 during early Wednesday. Even so, the risk barometer prints a 0.40% gain on a day while cheering progress over the US coronavirus (COVID-19) stimulus talks. US House Speaker Nancy Pelosi praised the latest round of relief package talks with Treasury Secretary Steve Mnuchin after both the policymakers missed the Tuesday-night deadline to have a deal. The Pelosi-Mnuchin discussions are up for a restart on Wednesday when Treasury Secretary Mnuchin returns from his Middle East trip. It should, however, be noted that the Senate Majority Leader Mitch McConnell was recently spotted by CNBC’s Carl Quintanilla, via a tweet, while saying, “Mr. McConnell’s remarks, confirmed by four Republicans familiar with them, threw cold water on Mr. Trump’s increasingly urgent push to enact a new round of pandemic aid before Election Day.” Other than the stimulus talks, COVID-19 problems in Europe and the UK join the latest likely tension between the US and North Korea to challenge the risk-tone. Spain is near to emergency while the UK also fails to cheer any positive results from the “Three Tier” lockdowns as global counts cross 40 million. Against this backdrop, the US 10-year Treasury yields rise past-0.80% whereas stocks in Asia-Pacific print mild gains based on the stimulus hopes. Looking forward, considering a light calendar, the equity derivative may track Wall Street’s performance while paying major attention to the US relief package negotiations. Read: Wall Street Close: Bulls pull-out at last hour, benchmarks end off their highs

The Bank of Japan’s (BOJ) monetary policy easing is exerting the intended effects on the economy, policymaker Makoto Sakurai said on Wednesday. The BO

The Bank of Japan’s (BOJ) monetary policy easing is exerting the intended effects on the economy, policymaker Makoto Sakurai said on Wednesday. The BOJ will strive to aid corporate funding and maintain market stability, Sakurai added. Further comments “Must take swift, appropriate action as needed if the economy's recovery is delayed due to pandemic.” “Monetary policy only has an indirect impact on stimulating the economy via financial institutions.”  

EUR/USD takes the bids near 1.1830, up 0.11% intraday, during the early Wednesday. The pair gained upside momentum after clearing a falling trend line

EUR/USD stays mildly positive around intraday high of 1.1834.Tuesday’s break of five-week-old trend line directs the bulls to the key Fibonacci retracement.Overbought RSI conditions may trigger pullback to 1.1810 support confluence.EUR/USD takes the bids near 1.1830, up 0.11% intraday, during the early Wednesday. The pair gained upside momentum after clearing a falling trend line from September 15 the previous day. However, overbought RSI conditions challenge the bulls. As a result, traders require an upside break of Tuesday’s high of 1.1840 to attack 61.8% Fibonacci retracement of the September month’s downside, near 1.1860. In a case where EUR/USD bulls remain positive beyond 1.1860, the 1.1900 threshold and September 10 peak surrounding 1.1920 can be their favorites. On the flip side, a joint of the short-term rising trend line and 50% Fibonacci retracement near 1.1810 can offer immediate support to the pair during its pullback. However, any downside below the previous resistance line, at 1.1800, can recall the short-term sellers targeting the monthly support line, currently around 1.1710. EUR/USD four-hour chart Trend: Pullback expected  

NZD/USD has been in the hands of the bears following the Reserve Bank of New Zealand's Governor Orr’s comment at a conference yesterday, saying that “

NZD/USD has melted to the downside and has given bears the greenlight to manoeuvre.There is the risk that price moves in on trendline resistance for last upside test. NZD/USD has been in the hands of the bears following the Reserve Bank of New Zealand's Governor Orr’s comment at a conference yesterday, saying that “we’re going to hold it [the OCR] there till at least February-March next year”. The market presumed it was an unintentional slip, as until now, guidance has been “at least 12 months” from March. Meanwhile, it played nicely into the hands of the bears expecting a break and waiting for the confirmation:NZD/USD Price Analysis: Bears wait for confirmation of the downsideThe downside outlook is in accordance with the monthly analysis as follows: The monthly chart is displaying the prospect of a reverse head and shoulders which offers a bearish bias while the price is below the monthly resistance. The daily outlook was as follows: The 4-hour chart was predicted to move to resistance and falter as follows: Today, bears had the opportunity to move stops to breakeven on the meltdown over the past 24-hours. The price is moving back to restest the trendline support, turned counter-trend resistance as follows: The state of play from here, according to the market structure, is as follows:  A restest of the counter trendline and subsequent hold will likely confirm the downside and encourage further offers.  A break above, however, will jeopardise breakeven buy stops at around 0.6610/30 and a run above 0.6640 will encourage a test of the 0.6670 highs. 

The People's Bank of China (PBOC) has set the yuan reference rate at 6.6781 versus Tuesday's 6.6930.

The People's Bank of China (PBOC) has set the yuan reference rate at 6.6781 versus Tuesday's 6.6930.

Despite better than previous Aussie Retail Sales, AUD/JPY drops to 74.44 during early Wednesday. The reason could be fresh challenges to the hopes of

AUD/JPY eases from intraday top after Aussie data, bounces off three-week low.Australian Retail Sales shrank 1.5% versus -4.0% prior in September.Market sentiment stays positive amid stimulus hopes despite McConnell’s refrain from entertaining the push for stimulus before the election.Speech from BOJ’s Sakurai, risk catalysts will be the key.Despite better than previous Aussie Retail Sales, AUD/JPY drops to 74.44 during early Wednesday. The reason could be fresh challenges to the hopes of the US coronavirus (COVID-19) stimulus before the presidential elections. However, the market mood remains mildly positive after US House Speaker Nancy Pelosi struck an upbeat statement following the latest round of aid package talks. The preliminary prints of the Australian Retail Sales for September recovered from -4.0% prior to -1.5%. The reading contrasts the Westpac Leading Index, published during early Asia, which eased from 0.48% to 0.22% MoM in September. Read: Australia Retail Sales (Sep. Preliminary): Falls 1.5% MoM, AUD steady CNBC’s Carl Quintanilla defies stimulus hopes with his latest tweet that relies on the Senate Majority Leader Mitch McConnell’s comments concerning US President Donald Trump’s push for a quick relief package. The tweet said, “Mr. McConnell’s remarks, confirmed by four Republicans familiar with them, threw cold water on Mr. Trump’s increasingly urgent push to enact a new round of pandemic aid before Election Day.” Even so, S&P 500 Futures and most stocks in Asia-Pacific remain mildly bid whereas the US 10-year Treasury yields also pierce the 0.80% threshold by press time. The reason for the market’s optimism could be spotted from US House Speaker Nancy Pelosi’s comments that mark progress in the aid package negotiations ahead of Treasury Secretary Steve Mnuchin’s return from the Middle East. The talks are up for a restart on Wednesday. Given the lack of major data/events, except a speech by the BOJ policymaker Makoto Sakurai, AUD/JPY traders will keep eyes on the stimulus talks for near-term directions. It should also be noted that any further worsening of the virus conditions in Europe and/or tension with China will also be important to watch. Technical analysis The bearish MACD and sustained trading below 61.8% Fibonacci retracement of June-August upside keep the AUD/JPY sellers hopeful. Hence, a clear downside past-74.25 will set the tone for the pair’s downside towards the late-June lows surrounding 73.35/30. Though, the September month’s low of 73.97 can offer an intermediate halt during the fall. Alternatively, a daily closing beyond the 61.8% Fibonacci retracement level of 74.80 will aim for the 75.00 round-figure.  

AUD/USD takes rounds to 0.7060/55 during Wednesday’s Asian session. In doing so, the quote pays a little heed to the recently flashed Retail Sales dat

AUD/USD snaps four-day losing streak while bouncing off one-month low.Australia’s Retail Sales shrank 1.5% MoM in September.Market’s risk-tone remains positive as US policymakers inch closer to the stimulus.COVID-19 woes, no-deal Brexit worries and RBA’s pessimism probe the bulls.AUD/USD takes rounds to 0.7060/55 during Wednesday’s Asian session. In doing so, the quote pays a little heed to the recently flashed Retail Sales data from Australia. Though, the data backs the broadly risk-on mood that takes clues from the progress of the US coronavirus (COVID-19) stimulus talks. The preliminary readings of the Australian Retail Sales suggest that the consumer activities recovered, despite a drop of 1.5% versus -4.4% prior, during the previous month. Earlier in the day, Australia’s Westpac Leading Index eased from 0.48% to 0.22% MoM in September. Read: Australia Retail Sales (Sep. Preliminary): Falls 1.5% MoM, AUD steady Talking about the risks, US House Speaker Nancy Pelosi’s comments conveying more clarity in the aid package discussions recently favored the trading sentiment. However, bulls are cautious ahead of US Treasury Secretary’s return from the Middle East as the policymakers have already missed Tuesday’s deadline and Senate Majority Leader Mitch McConnell defy US President Donald Trump’s push for the stimulus before the election. Other than the US relief package talks, the tightening grips of the COVID-19 in Europe join the Sino-American and Aussie-China tussle to challenge the optimists. Amid these plays, S&P 500 Futures and stocks in Asia-Pacific remain mildly bid during the early hours of trading. The US 10-year Treasury yields also pierce the 0.80% mark and flash the upbeat market mood. As a result, today’s aid package negotiations between Pelosi and Mnuchin will be the key for the global markets and the AUD/USD even as the economic calendar fails to offer any important data from either the US or Australia. Technical analysis The bears need to conquer an ascending trend line from mid-June on a daily closing basis, currently around 0.7045, to visit the previous month’s bottom surrounding the 0.7000 threshold. Until then, the 100-day SMA level of 0.7101 holds the key for the bulls’ entries.  

Australia’s key release for today in the preliminary Retail Sales for September has just been released as follows by the Australian Bureau of Statisti

Australia’s key release for today in the preliminary Retail Sales for September has just been released as follows by the Australian Bureau of Statistics, providing early estimates: Seasonally adjusted estimate fell 1.5% MoM. +5.2% in September 2020 compared with September 2019 YoY. The states will continue to experience divergent conditions, Victoria set to be weak again. AUD/USD update The currency has been under pressure of late as the Reserve Bank of Australia tips the hat towards further easing as soon as November's meeting.  Yesterday, the RBA's Kent's rhetoric was the fuel that sent the Aussie over the edge. He was mostly repeating Governor Lowe’s dovish stance of last week but apparently catching the markets off guard when saying that the benchmark BBSW rate might dip below zero: RBA Kent's comments finally send AUD/USD through support However, a risk-on session on Wall Street helped lift the currency back to test the structure, trimming losses to 0.7050 in late New York trade as follows: Description of Retail Sales The Retail Sales released by the Australian Bureau of Statistics is a survey of goods sold by retailers is based on a sampling of retail stores of different types and sizes and it''s considered as an indicator of the pace of the Australian economy. It shows the performance of the retail sector over the short and mid-term. Positive economic growth anticipates bullish trends for the AUD, while a low reading is seen as negative or bearish.

Australia Westpac Leading Index (MoM) fell from previous 0.48% to 0.2% in September

Australia Retail Sales s.a. (MoM) increased to -1.5% in September from previous -4%

Gold prices rise to $1,913, up 0.36% intraday as markets in Tokyo open for Wednesday’s trading. The yellow metal benefited from the broad US dollar we

Gold reverses the pullback from $1,914 while bouncing off $1,906.US policymakers struck upbeat statements despite failing to match the deadline to offer relief package details.Coronavirus (COVID-19) woes tighten grip in Europe, US-North Korea, Sino-American tussles renew.All eyes on the US aid package talk even as calendar events pick-up pace.Gold prices rise to $1,913, up 0.36% intraday as markets in Tokyo open for Wednesday’s trading. The yellow metal benefited from the broad US dollar weakness, amid hopes of the American COVID-19 stimulus, during the previous day. The optimism faded as Congress members failed to meet the Tuesday-end time limit to unveil the details. However, the latest comments from the diplomats suggest that hopes are favoring the much-awaited relief package’s arrival soon. More clarity on discussions awaits Mnuchin’s return… Despite failing to agree on the COVID-19 aid package, US House Speaker Nancy Pelosi conveyed her optimism for the deal. The diplomat recently said that the talks with US Treasury Secretary Steve Mnuchin provided more clarity. Though, the White House Chief of Staff Mark Meadows criticized Pelosi for her rigid demand of $2.2 to $2.4 trillion for the package as the root cause of the delay in the stimulus. More talks will resume when Treasury Secretary Mnuchin returns from his trip to the Middle East, expected on Wednesday. Elsewhere, European countries keep struggling due to the virus as Spain is near to announce a national emergency and the UK is failing to witness any upbeat results from the “Three Tier” lockdown system. The same suggests the return of the national activity restrictions and challenge market sentiment, which in turn can direct traders towards gold as the US dollar remains downbeat ahead of the American Presidential election. Other than the virus woes, Brexit worries and the US tussles with North Korea and China can also offer a mild push to the Risk-off buyers. Though, the present market sentiment seems positive as S&P 500 Futures and Japan’s Nikkei 225 both print 0.50% gains after Wall Street managed to close in mildly positively. Looking forward, traders will keep eyes on the relief package updates for near-term direction while comments from the ECB President Christine Lagarde can offer intermediate moves. Technical analysis A lower high formation on the daily chart, during the current week, can be ignored until the bullion prices remain above an ascending trend line from September 28, near $1,897 now. As a result, bulls are well-positioned to challenge a falling resistance line from August 18, currently around $1,919.  

As per yesterday's analysis, the cross has moved lower and into a position where defensive bears can now monitor the breakeven area for the opportunit

NZD/JPY has continued to lower and is testing critical support.Bears will monitor for a break of support and bring in their stop losses. As per yesterday's analysis, the cross has moved lower and into a position where defensive bears can now monitor the breakeven area for the opportunity for a free ride towards the target. For a re-cap of the motivation for the trade, NZD/JPY Price Analysis: Bears position for a 1:3 risk-reward setup,  the weekly chart was offering the prospects of a downside extension (wave-3) following a correction of the bearish impulse within what appears to be a reverse head and shoulders in the making: The bias is reinforced by the NZD/USD reverse head and shoulders:  

GBP/USD picks up the bids near 1.2950/55 during Wednesday’s Asia session. In doing so, the quote remains positive for the fourth day in a row while ke

GBP/USD keeps recovery moves from 1.2930, prints four-day winning streak.Sustained trading above the short-term key EMA favors bulls to again challenge the seven-week-old falling resistance line.An ascending trend line from September 23 adds to the downside barrier.GBP/USD picks up the bids near 1.2950/55 during Wednesday’s Asia session. In doing so, the quote remains positive for the fourth day in a row while keeping Monday’s upside break of the 50-day EMA. With the bullish MACD favoring the EMA breakout, GBP/USD buyers can aim for the falling resistance line from September 01, at 1.2995 now. However, the pair’s upside past-1.2995 will challenge the monthly peak surrounding 1.3085 only if there prevails a sustained break of the 1.3000 threshold. Meanwhile, a one-month-long support line near 1.2890 offers an extra back-up to the GBP/USD bulls even if they fail to bounce off the 50-day EMA level of 1.2935. In a case where the quote drops below 1.2890, the monthly low of 1.2820 can act as a buffer before dragging prices to the previous month’s low of 1.2675. GBP/USD daily chart Trend: Further recovery expected  

Early Wednesday, the market sees the preliminary reading for the September month Retail Sales data from Australia at 00:30 GMT. Following a 4% contrac

Retail Sales overview Early Wednesday, the market sees the preliminary reading for the September month Retail Sales data from Australia at 00:30 GMT. Following a 4% contraction in August, markets are expecting a mild recovery in the print as the period comprises of Australia’s bounce back from the coronavirus (COVID-19) resurgence. Although bearish signals from the RBA have already waned optimism for any expectedly positive data, AUD/USD traders may look for a bounce from the multi-day low amid cautious optimism, which in turn makes today’s readings the key. Analysts at Westpac don’t turn down the market forecasts while saying: We expect sales to be up slightly, +0.5% after -4% in Aug. The states will continue to experience divergent conditions, Victoria set to be weak again. How could it affect AUD/USD? AUD/USD pierces 0.7050 while consolidating the previous day’s losses to the lowest in one month. Although the recent optimism concerning the US COVID-19 relief package seems to have favored the pair buyers, bulls are likely to keep in mind that the latest statements in the RBA minutes and by RBA Governor Philip Lowe have been pointing towards a rate cut. However, any extreme prints of the key economic data might not refrain from extending the latest recovery moves. Technically, the bears need to offer a clear break below an ascending trend line from mid-June, currently around 0.7045, to visit the previous month’s bottom surrounding the 0.7000 threshold. Until then, the 100-day SMA level of 0.7101 holds the key for the bulls’ entries. Key Notes AUD/USD Forecast: Bouncing from fresh 1-month lows, but still at risk of falling AUD/USD: Fades pullback from one month low ahead of Aussie Retail Sales About Australian Retail Sales The Retail Sales released by the Australian Bureau of Statistics is a survey of goods sold by retailers is based on a sampling of retail stores of different types and sizes and it's considered as an indicator of the pace of the Australian economy. It shows the performance of the retail sector over the short and mid-term. Positive economic growth anticipates bullish trends for the AUD, while a low reading is seen as negative or bearish.

USD/CAD fades pullback from the weekly low while declining to 1.3120 during the early Asian session on Wednesday. The pair marked the biggest losses i

USD/CAD fails to extend the bounce off one-week low beyond 1.3132.Absence of extreme RSI conditions, sustained trading below key Fibonacci levels, SMA favor the bears.50% Fibonacci retracement adds strength to the 1.3200/3210 key resistance.USD/CAD fades pullback from the weekly low while declining to 1.3120 during the early Asian session on Wednesday. The pair marked the biggest losses in eight days the previous day but couldn’t close below an ascending trend line from September 01. Although normal RSI conditions and sustained trading below the 61.8% Fibonacci retracement of the last month’s upside favor USD/CAD sellers, a clear downside break of the mentioned support line, at 1.3115 now, becomes necessary to confirm the bears’ entries. It should be noted that the monthly low of 1.3100 and the multiple stops around 1.3050/45 can offer intermediate halts during the pair’s downside from 1.3115 towards the previous month’s low of 1.2994. Meanwhile, an upside clearance of 61.8% Fibonacci retracement level near 1.3160 needs to break a falling trend line from September 30, at 1.3180 now, before confronting the crucial resistance confluence near 1.3200/3210 that includes 50-day SMA and 50% Fibonacci retracement. If at all the bulls manage to cross the 1.3210 hurdle, 1.3260 and the monthly high of 1.3340 will gain market attention. USD/CAD daily chart Trend: Pullback expected  

Earlier, Pelosi's spokesman Drew Hammill said on Twitter that US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin moved closer to an a

Earlier, Pelosi's spokesman Drew Hammill said on Twitter that US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin moved closer to an agreement on a fresh coronavirus relief package during a 45-minute talk on Tuesday. Hammill said talks would continue on Wednesday, and "both sides are serious about finding a compromise." Pelosi herself has just stated that the talks with Mnuchin provided more clarity and that she remains hopeful of a pre-election stimulus deal.  Futures in early Asia have enjoyed the optimism.  S&P500 CFDs were higher by over 0.5% to trade at 3455.4 the high.    

Whether you are a bull or a bear, the following top-down analysis has something for everyone. Currently, there is little to take advantage of without

USD/CHF is trapped between resistance and support on a monthly basis.Support is expected to be tested where the opportunities will arise. Whether you are a bull or a bear, the following top-down analysis has something for everyone.  Currently, there is little to take advantage of without being exposed to swings.  The case for the downside is diluted by the monthly support while the upside opportunities would be best placed once there has been an actual test of the monthly support.  Monthly chart, break of support prospects If the support gives, then there is plenty of fuel in this correction that has made it to a 38.2% Fibonacci retracement level for the bears to stay in control and extend the downside towards lower structure.  However, if the support holds, then the upside will be back in the picture.  Strong support scenario Weekly chart In a scenario where there is strong support, bulls will seek entry and target the upside.  Daily chart The right-hand shoulder (RHS) of the head and shoulders is also an M-formation.  The neckline can be targeted. 4-hour chart Those seeking a test back to resistance would welcome a discount and there could be one in the making.  An extension fo the downside and subsequent test of the monthly support could well be in order at this juncture and offer a better entry point to target the M-formation's neckline. The 4-hour chart can be monitored for bullish technical conditions once a test of the support has been made.  A break of the support will give rise to downside opportunities.

WTI refrains to extend the late-US session losses while picking up the bids around $41.30 during the pre-Tokyo open Asian trading on Wednesday. The oi

WTI’s consolidates the pullback from the highest since September 04 with its latest U-turn from $41.13.API Weekly Crude Oil Stock grew to 0.584M versus -5.42M prior during the week ended on October 16.Markets anticipate a bearish statement from the oil producers after IMF’s downbeat forecasts.EIA inventories, risk catalysts can entertain oil traders.WTI refrains to extend the late-US session losses while picking up the bids around $41.30 during the pre-Tokyo open Asian trading on Wednesday. The oil benchmark rose to the highest since September 04 the previous day, before stepping back to $41.13 on downbeat inventory data from the American Petroleum Institute (API). However, broad US dollar weakness and cautious optimism in the market seem to have favored the bulls. API inventories failed to repeat the previous week’s surprise draw of 5.42 million barrels as the industry data marked the addition of 0.584 million barrels of stockpiles in its latest release. The data offered oil traders the much-needed pullback from the multi-day high. The pullback also gained momentum amid the International Monetary Fund’s (IMF) latest economic forecast for the Middle East and Central Asia. The Washington-based institute recently predicted a 4.1% contraction for the region following its earlier fears of -2.8% GDP. This challenges the global output cut agreement between the leading producers and Russia. Even so, cautious optimism concerning the US coronavirus (COVID-19) stimulus and weak US dollar favors the energy bulls. Although US House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin couldn’t break the relief talk stalemate by the previously hailed deadline of Tuesday-end, the latest comments from the Congress suggest both sides are nearer to a deal. This reduces the greenback’s safe-haven demand and keeps the US dollar index (DXY) near the lowest in a month. With the private inventories flashing downbeat numbers, the official figures from the Energy Information Administration (EIA) are also expected to recede from -3.818M previous readouts to -0.24M during the week closed on October 16. The same can offer another drag to the commodity prices, in addition to the fears of oil demand, but could be ignored if US policymakers can unveil the much-awaited stimulus. Technical analysis Oil prices need to stay beyond the late-September top around $41.75 to keep the bulls directed towards the August 24 low closet to $42.30, failing to do so can drag the quote back to the monthly support line near $40.70. It should, however, be noted that the 200-day EMA level of $41.30 can offer immediate support to the black gold.  

AUD/JPY struggles to keep recovery moves from the lowest since September 28, marked the previous day, while taking rounds to 74.35 during the early We

AUD/JPY fizzles the bounce off one-month low, struggles around the key support confluence near 74.35/25.Bearish MACD, sustained trading below 61.8% Fibonacci retracement favor the sellers.AUD/JPY struggles to keep recovery moves from the lowest since September 28, marked the previous day, while taking rounds to 74.35 during the early Wednesday morning in Asia. In doing so, the pair steps back from the confluence of 200-day EMA and an upward sloping trend line from June 12. Even so, bearish MACD and sustained trading below 61.8% Fibonacci retracement of June-August upside keep the AUD/JPY sellers hopeful. Hence, a clear downside past-74.25 will set the tone for the pair’s downside towards the late-June lows surrounding 73.35/30. Though, the September month’s low of 73.97 can offer an intermediate halt during the fall. Should AUD/JPY prices remain weak past-73.30, bottoms marked on June 22 and 12, respectively around 72.70 and 72.50 will return to the charts. Alternatively, a daily closing beyond the 61.8% Fibonacci retracement level of 74.80 will aim for the 75.00 round-figure. However, any more upside will not hesitate to direct the AUD/JPY buyers towards the 50% Fibonacci retracement and the monthly low of 75.50 and 76.50 in that order. AUD/JPY daily chart Trend: Pullback expected  

Early Wednesday morning in Asia, South Korea’s Yonhap quoted US Secretary of Defense Mark Esper while terming North Korea as the rogue nation. The com

Early Wednesday morning in Asia, South Korea’s Yonhap quoted US Secretary of Defense Mark Esper while terming North Korea as the rogue nation. The comments from the American diplomat also suggested that the world’s biggest economy needs to further enhance his country's alliances and defense capabilities, per the news. Other than citing the threats from North Korea and Iran, the US completion with Russia and China could also be found in the excerpts of the speech. Market implications The news failed to offer any immediate market moves, mainly because of the general inactivity around this time of the day as well as major attention on the US coronavirus (COVID-19) stimulus talks. However, the USD/KRW bounces off the lowest since April 2013 to 1,139.50 by press time. The reason could be traced from the US dollar’s safe-haven demand amid times when the US and North Korea are already talking denuclearization.

AUD/USD nurse recent losses around 0.7050 at the start of Wednesday’s Asian session. The pair dropped to the lowest since September 25 the previous da

AUD/USD bounces from 0.7019, the lowest in one month, couldn’t exceed 0.7073, prices battle with four-month-old support line.Mixed headlines concerning the US stimulus offered a breathing space to the sellers called by RBA minutes.US dollar weakness, a light calendar may join the line of positive catalysts.Aussie Retail Sales can trigger consolidation of recent losses unless risk-off dominates, as widely anticipated.AUD/USD nurse recent losses around 0.7050 at the start of Wednesday’s Asian session. The pair dropped to the lowest since September 25 the previous day before bouncing off 0.7019. While cautious optimism concerning the US coronavirus (COVID-19) stimulus favored traders to nurse the losses led by RBA minutes, fears of the wider wave 2.0 and no final announcement of the American package by the previously hailed deadline keep the bulls chained. Other than the risk catalysts, the preliminary reading of Australia’s September month Retail Sales will also be the key to watch. US stimulus talks again extended… Despite conveying optimism for the much-awaited relief package deal, US House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin failed to reach on virus aid agreement by the end of the 48-hour time limit cheered earlier by Democrat Pelosi. Recently a spokesperson for Pelosi said, “Both sides are serious about finding a compromise and moved closer to the agreement.” The update also mentioned that the negotiations will continue on Wednesday. Before a few minutes, White House Chief of Staff Mark Meadows blamed House Speaker Pelosi for the delay in the talks as she sticks to $2.2 to $2.4 trillion demand. Earlier on Tuesday, RBA minutes provided additional strength to AUD/USD while citing the possibilities of pushing the targets for the cash rate and the 3-year yield towards zero. The moves were strong enough to drag the pair to a one-month low before the US-session recovery that mainly took clues from the broad US dollar weakness amid mild hopes of the stimulus bundle from the American Congress. It’s worth mentioning that improvement in the US housing numbers, recently in the Housing Starts and Building Permits that followed previous positive prints of the NAHB Housing Market Index, also favored the market’s cautious optimism. Furthermore, no rate change for the sixth consecutive month by the People’s Bank of China (PBOC) could also be considered as a distant positive for the pair. Against this backdrop, Wall Street benchmarks managed to close with soft gains whereas the US 10-year Treasury yields gained 2.4 basis points (bps) to 0.786% at the end of Tuesday’s North American session. Looking forward, Australia’s Westpac Leading Index and the preliminary reading of Retail Sales for September can offer immediate direction to the AUD/USD prices as stimulus talks have been pushed back by one more day. Although the shift in the market mood can gain momentum from the scheduled releases and may extend the bounce off multi-day low, virus woes stand tall to challenge the bulls. Technical analysis While an ascending trend line from mid-June can keep jostling with the bears near 0.7045/50, the 100-day SMA level of 0.7101 holds the key for the bulls’ entries. Also acting as the key downside support is the previous month’s bottom surrounding the 0.7000 threshold.  

Stocks on Wall Street ended higher on Tuesday although were down from their highs on the day when it became apparent that the talks among US lawmakers

The Dow Jones Industrial Average closed up 113.37 points, or 0.4%.The S&P 500 ended 16.2 points higher, or 0.47%. Nasdaq Composite ended 37.51 points higher, or 0.33%.Stocks on Wall Street ended higher on Tuesday although were down from their highs on the day when it became apparent that the talks among US lawmakers were not progressing as fast as hoped. House of Representatives Speaker Nancy Pelosi said she was optimistic Democrats could reach a deal with the White House early on which spurred investors on at the start of the day. She added there should be an indication of a possible agreement later on Tuesday, but that never came. “Hopefully by the end of the day today, we’ll know where we all are,” said House Speaker Nancy Pelosi on Bloomberg television. Instead, a phone call was held between Pelosi and Steven Mnuchin which did not resolve matters according to the Chief of Staff Mike Meadows who made a statement or two after the market close. Meanwhile, the Dow Jones Industrial Average closed up 113.37 points, or 0.4%, to 28,308.79, the S&P 500 ended 16.2 points higher, or 0.47%, to 3,443.12 and the Nasdaq Composite ended 37.51 points higher, or 0.33%, to 11,516.49.   Meanwhile, the third-quarter earnings season saw 66 S&P 500 companies reporting results. 86.4% have topped expectations for earnings, according to Refinitiv IBES data. S&P 500 levels          

South Korea Producer Price Index Growth (MoM) came in at 0.1%, below expectations (0.8%) in September

South Korea Producer Price Index Growth (YoY) above forecasts (-0.5%) in September: Actual (-0.4%)

Gold futures have remained trading within previous ranges on Tuesday, trapped between $1,900 and $1,915, with the market awaiting the outcome of the U

Gold futures have remained trading within previous ranges on Tuesday, trapped between $1,900 and $1,915, with the market awaiting the outcome of the US stimulus negotiations. US House Representative, Nancy Pelosi, who set Tuesday as the deadline to reach an agreement, said she was optimistic about a stimulus deal, although senate republicans have shown their opposition to the spending figures proposed by the democrats, which cast serious doubts about the chances for the legislation to be passed before the Election Day. How is XAU/USD positioned on the charts? The Technical Confluences Indicator shows the yellow metal trading below a cluster of lines at $1,910, that include previous lows at 15 min and hour charts, 38,2% Fibonacci retracement one day and 5 SMA in 15 min and one-hour charts. Beyond that level, the precious metal will find $1,9013 with the confluence of the 200-SMA on 4h charts, the Bollinger Band 4h-Upper, and the Fibonacci 38.2% one-day.  Finally, at $1,928 the pair will find pivot point 1-day R2 and pivot point 1-week R1. On the downside, initial support lies at $1,905, where the 50-SMA in 1-hour charts converges with the 200 SMA in 15M and 5 SMA in 4H plus the Bollinger Band 4H middle and 61.8 Fibonacci 1H. Below here at $1,901 we find the confluence of 5-SMA on 1D, 100-SMA on 4H and Fibonacci 38,2% 1W. Finally, at $1,895 gold futures might find support at the 23,6% Fibonacci 1W confluence with pivot point 1 Day S1 and Bollinger Band 1D Middle. Here is how it looks on the tool About Confluence Detector The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies. Learn more about Technical Confluence
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