- Another surge in coronavirus cases saw major stock market indices tumble overnight as traders booked profits ahead of the US election. Volatility may also pickup as we get through the week due to month-end flows.
- The DAX 30 (DE30) led the declines by falling a -3.7% and US indices following suit. The USD regained its safe-haven statues and traded broadly higher against all majors.
- Germany’s IFO business climate fell slightly short of expectations (92.7 vs 93.0 forecast), although remains at its second highest level since February. We’d expect this to turn lower unless Europe can contain the spread of the virus sooner than later.
Today’s Calendar Events (Time are GMT+10 Sydney)
- No major economic data is scheduled for today
USD/JPY: 2-Bar Reversal at 50% Retracement
- Price action since the 104.34 low appears to be corrective, so we are looking for bearish momentum to return.
- A 2-bar reversal (dark cloud cover) has formed on H4 around the 105 handle and 50% retracement level to suggest bears are trying to regain control.
- Bears could consider fading into moves below the 105.00/05 resistance zone, or wait for a clear break of yesterday’s lows to target the 104.34 and 104 lows.
Nasdaq 100 (USTEC): 11,600 Remains a Pivotal Level
- Bears finally created a decisive break beneath 11,600 support and likely have the 11,200 lows in focus.
- Prices have retraced towards resistance, which could help bears position themselves for fresh shorts (assuming prior support turns into resistance around 11,600).
- Bears could target the 11,200 lows or use the lower channel for a dynamic target.
Bitcoin (BTCUSD): Bearish Divergence at The Highs
- Bulls have clearly remained the dominant force since breaking out of a symmetrical triangle, although price action is now within a corrective phase.
- A bearish divergence has formed on the RSI to warn of weakness in momentum, so a break below 12,656 confirms the divergence and warns of a deeper correction towards 12,000.
- A break above 13,224 assumes bullish continuation, in line with dominant momentum.
AUD/CHF: The 10-day eMA continues to cap as resistance although a small bullish bar has appeared on the daily chart, after a minor break beneath Friday’s low. A break above 0.6500 removes it from the watchlist.
EUR/USD: A stronger USD saw EUR/USD retrace inside Friday’s bullish engulfing candle. A break above 1.1880 brings the 1.2000 highs into focus.
USD/CNH: A bullish spike pierced above 6.6834 resistance. As the daily trend remains bearish below the 6.7648, we’ll continue to monitor for bearish setups beneath this key level.
Nikkei 225 (JP225): We’ll continue to watch the potential for a longer-term bearish wedge to play out over the coming week/s.
Copper (XCUUSD): Removed from watchlist with a break below 309.12. Longer-term traders can use a break beneath 300 to invalidate the bias but, with momentum currently pointing lower, we’d prefer to step aside.
Nasdaq 100 (USTEC): Prices broken through key support to invalidate the long bias. Bears could consider short setups below 11,600.
Gold (XAU/USD): A break above 1933 resistance assumes bullish continuation, although a bearish pinbar on the weekly chart warns of a hesitancy to break higher. This may be removed from the watchlist if bullish momentum doesn’t return soon.
Ethereum (ETHUSD): Removed from watchlist. Prices have retested the monthly pivot with a pickup of bearish momentum.