- Bitcoin (BTCUSD) broke to its highest level since June 2019, taking its rally from the March low to +257%. With bitcoin’s ability to defy traditional overbought indicators, FOMO (fear of missing out) appears to be the usual driver behind this bull case.
- President Trump does not expect a coronavirus relief package to arrive before the November 3rd election, as Republic and Democrat lawmaker cannot bridge the gap to get a deal over the line.
- The DJIA (US30) and S&P 500 (US500) fell -0.8% and -0.3% respectively, although the Nasdaq 100 (USTEC) remained resilient around 11,600 resistance.
- European indices extended their lows early in the session as coronavirus cases continued to surge.
- In a speech yesterday, RBA’s Bullock said they suspect Q3 growth may be on track to expand slightly and mark the end of a technical recession (which is defined as two consecutive quarters of negative growth). However, they expect non-performing loans to continue to rise over the coming months.
Today’s Calendar Events (Time are GMT+10 Sydney)
- Australia’s CPI data is the main calendar event in the Asian session. Whilst headline inflation figures are of interest, it is the ‘trimmed mean’ inflation set that RBA pay closer attention to. Given the RBA’s positive expectation of growth in Q4, an upside surprise in CPI today could see the Australian dollar lift from its lows as traders lower their expectations of a rate cut in November.
- BOC hold their cash rate decision in the US session (01:00 Sydney). No change is currently expected but they may speak of scaling back some of their covid-19 emergency measures.
EUR/JPY: Daily Close Confirmation Beneath Rising Support
- An elongated bearish candle closed beneath a correction line to suggest further downside.
- Two separate 2-bar reversals have formed lower lows to show momentum is turning lower.
- The bias remain bearish beneath yesterday’s high and for a re-test of the 122.37 low.
GBP/USD: 1.3000 Continues to Support
- A small bullish candle has formed on the daily chart to reaffirm support around the 1.3000 handle.
- Given it has retraced into the 50% and 61.8% Fibonacci level within the body of a large bullish candle, we are seeking a potential swing low.
- A break above yesterday’s high assumes bullish continuation and brings the 1.3176 – 1.3200 resistance zone into focus for bulls as an initial target.
USD/JPY: Bears Retain Control
- Bears remained in control after the 2-bar reversal around 105 resistance.
- Stopping just shy of our initial 104.34 target, the risk is for a technical bounce from current levels before its next leg lower.
- A break beneath 104.34 brings the 104.00 handle into focus.
Nasdaq 100 (USTEC): We may have backed the wrong horse. Whilst S&P500 and DJI moved lower late in the session, the Nasdaq remains around 11,600 resistance and is yet to provide any suggestion of a swing high. We will remove from the watchlist if bearish momentum does not return soon.
Nikkei 225 (JP225): We’ll continue to watch the potential for a longer-term bearish wedge to play out over the coming week/s.
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.
Bitcoin (BTCUSD): The bearish divergence has been ignored and bulls broke it convincingly above 13,224 resistance in line with dominant momentum. The bias remains bullish above 12,656 with an open upside target.
AUD/CHF: A break above 0.6500 removes it from the watchlist. Until then we will continue to look for a potential swing high.
EUR/USD: Price action remains within Friday’s bullish engulfing candle but just above 1.1786 support. A break above 1.1880 brings the 1.2000 highs into focus.