- Equities closed broadly lower as a coronavirus stimulus relief package has yet to emerge, raising doubts it will materialise ahead of the November 3rd election.
- Despite the sharp rebound for the US economy, is still has a “long way to go” towards full recovery according to the Fed’s Clarida, who estimates it could take at least another year before it returns to pre-crisis levels.
- Britain’s Chief negotiator David Frost sees no point in resuming EU trade talks unless Brussels fundamentally changes their approach. GBP held up fairly well despite the increased odds of a no-deal Brexit.
- OPEC allies vowed to support oil markets to fend off threats from a second wave of coronavirus cases. Some members have said they could delay their planned increase in oil output if necessary, to help support oil prices.
- NZIER business confidence improved and now sits at its least pessimistic level since December.
Today’s Calendar Events (Time are GMT+10 Sydney)
- The RBA release their minutes at 11:30, although it is the speech from RBA’s Assistant Governor Christopher Kent at 10:00 which may glean more attention. Titled “The Stance of Monetary Policy in a World of Numerous Tools” could see him shed further light on how the RBA intend to support the economy alongside fiscal policy. AUD pairs and the ASX 200 will be in focus.
- It will then be quiet on the data front until Germany releases producer prices at 18:00.
- The main driver for Wall Street could be the progress (or lack of) the coronavirus relief aid.
EUR/AUD: Daily Close Confirmation Above 1.6600
- EUR/AUD closed to its highest level since May to break out of a multi-month range.
- Bulls can wait to see if 1.6600 holds as support before considering longs or enter during a period of consolidation on a lower timeframe.
- The daily trend remains bullish above the 1.3600/50 lows, and the range breakout projects a target around 1.7100.
- Yesterday’s bullish engulfing low could also be used to fine tune risk management.
DJIA (US30): Bears Eye a Break Below 28,145
- Price action remains choppy and hesitant to break to new highs on the daily chart. Yet a potentially bearish picture is emerging.
- The all-time high (ATH) at 29,196 marked the top of a bearish engulfing candle, and the 2-bar reversal at 28,973 marked a lower high beneath the ATH.
- Yesterday’s bearish outside day after Friday’s Doji suggests momentum is trying to turn lower.
- A break beneath 28,145 assumes bearish continuation and brings the 27,655 and 27,164 lows into focus.
Bitcoin (BTCUSD): Bulls Close in on 12k
- Bullish momentum has finally returned to retest the 11,700 highs and break out of a bullish flag.
- If successful, the flag projects a target around 12,000 (although that is not to say it will go in a straight line). However, the triangle projects an interim target around 12,000 so we could see prices retrace around this key level if reached.
- The bias remains bullish above the 11,180 swing low – although the gap around 11,395 can be used to fine-tine risk management.
AUD/CHF: Yesterday’s bearish outside day hit our initial target of 0.6425. Bias remains bearish and a break beneath 0.6425 brings the 0.6375 target into focus, projected from the initial bearish flag.
USD/NOK: The bullish flag has not yet been confirmed and prices have retreated slightly lower. The trend remains bullish on H4 so we’ll continue to monitor for any potential longs.
Ethereum (ETHUSD): Removed from watchlist. It didn’t stay trapped in its bearish channel for long after prices printed a marginal new low and reversed sharply higher. Whilst we are now bullish on digital currencies in general, the reward to risk is unfavourable on ETHUSD for bullish setups over the near-term.
CAD/JPY: Bias remains bullish above 79.43. However, a bearish hammer on the daily chart suggests a hesitancy to break higher, so stepping could be a viable option at this stage.
Brent (BRENT): Removed from watchlist as price action has become ambiguous.
WTI (WTI): Removed from watchlist as price action has become too ambiguous.