Equities Wobble At the Highs on Lockdown Fears | FXTRADING.com - International

  • Reports surfaced that Pfizer could secure authorisation to release their COVID-19 vaccines in the US and Europe, after their final trials produced successful results of nearly 95%. Whilst the vaccines may appear before Christmas, it remains uncertain how many people will want to be first in line to use it given the short turnaround time the approvals have taken (which usually take years).
  • US equities failed to take advantage of the development and focussed more on the worries of lockdowns ahead of Christmas, with the DJIA (US30), S&P 500 (US500) and Nasdaq 100 (USTEC) closing lower -1.2%, -1.2% and -0.7% respectively.
  • Canada’s inflation outperformed at 0.7% YoY vs 0.5% expected. Yet as it remains far below BOC’s 2% target then any rate hike remains non-existent over the foreseeable future.
  • Oil prices were slightly higher on hopes OPEC will delay their planned increase of oil output. The USD was the weakest major and NZD was the strongest.


Today’s Calendar Events (Times are GMT+11 Sydney)

  • Australian employment is the main event in the Asian session, although it may take large deviations from expectations to provoke a larger move given AUD is taking its lead mostly from US equities. And with equities looking heavy at their highs, a downside miss may provoke a larger reaction in favour of AUD bears.
  • US jobless claims warrant a look for USD traders in the early hours, but once again sentiment around lockdowns may be the bigger driver.


AUD/JPY: Trapped Between the Monthly and Weekly Pivots (for now)

  • COVID-19 sentiment is weighing is US equities and the Australian dollar. So if today’s employment data were to miss it could send AUD/JPY below key support
  • Prices are ranging between 75.70 and 76.16, which is also near the monthly and weekly pivots. A breakout either side of these S/R zones could signal its next directional move.
  • A break below the MR1 support zone brings the 75 support zone into focus. A break above the 76 resistance zone brings the 76.77 high into focus.


GBP/JPY Coiling Up Above Support

  • Prices are coiling up within the 137.52 – 138.84 range. Given this follows a sharp bearish reversal from 140 and a bearish hammer formed on Tuesday, the bias is for a downside break.
  • A break below 137.52 assumes a run towards 136.384.
  • The bias is bearish below 138.84, although a daily close above 138.05 given the daily chart has not closed above this level so far this week.


Nasdaq 100 (USTEC): Corrective Bounce May Have Complete

  • The Nasdaq has now returned to our short watchlist having stalled at the 61.8% Fibonacci level and broken out of its bullish / corrective channel.
  • The bearish candle which closed beneath the 61.8% Fibonacci level is a lower high. And the last H4 candle of the day closed beneath 11,922 support.
  • 11,785 and 11,513 lows are now in focus for bears.


Watchlist Update:

Bitcoin (BTCUSD): Bias remains bullish above the 17k support zone or the lower trendline of the bullish channel. 12k remains the key focus with 19k the next level of resistance.

NZD/CHF: Bias remains bullish above 0.6230 support. Waiting for a clear above 0.6330 resistance to suggest bullish continuation.

Copper (XCUUSD): Removed from watchlist. We saw an upside break above 321.85 yet momentum was not sustained, making its next move appear ambiguous.

ASX 200 (AUS200): The bias remains bullish above 6373. We await a convincing break above 6520 to suggest bullish trend continuation.

USD/SEK: The bias remains bearish below 8.7100. A break below 8.5527 suggest a major bearish breakout.

USD/CNH: Bias remains bearish below 6.6560. The next major support is around 6.4650.

NZD/USD: Prices reached our 0.6930 target and produced a 2-bar reversal on H4. Now on the backburner as we wait for a potential corrective phase to complete.

Hang Seng (HK50): The bullish wedge remains in play which initially targets the highs around 26,862.

Gold (XAU/USD):  A break beneath 1850 support brings the 1800 lows into focus.

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