New Vaccine Hopes Send Dow and S&P 500 to Record Highs | - International

  • Moderna Inc reported that 94.5% of their stage 3 tests proved effective in preventing COVID-19, making it the second company to achieve test results over 90% in two weeks. The S&P 500 (US500) and DJIA (US30) closed to their highest levels on record although remain just below Friday’s intraday record highs.
  • RBA’s Philip Lowe said in a speech overnight that Australia is on the path to recovery, and that they would only consider negative interest rates if all the major central banks had negative rates.
  • China’s industrial production beat expectations, helping copper break above $320 and rise to its highest level since June 2018.
  • The ASX exchange is expected to reopen today after a technical glitch meant it was closed for most of yesterday.

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

  • No major economic data is released today.
  • However, US retail sales warrants a look in the early hour of tomorrow and brings USD pairs and indices into focus.


Copper (XCUUSD): Breaks to 30-Month High

  • Copper prices exploded higher yesterday to take it above key resistance. This follows on from a bullish breakout from a triangle last week.
  • Prices have since retraced and found support around the 38.2% Fibonacci retracement and original breakout level.
  • Bulls could consider entering around current levels to target highs around 330.
  • A clear break beneath the 38.2% level removes it from the watchlist.

USD/SEK: Bear Flag above Key Support

  • USD/SEK is another pair which points to structural weakness for the US dollar.
  • Trading within an established bear trend, prices are coiling up within a potential bear-flag just above key support.
  • If successful, the flag projects a target around the 8.2923.
  • Given its proximity to key support, we’d prefer to wait for a break below 8.5527 before confirming the bear flag.


ASX 200 (AUS200): Preparing to Breakout From Consolidation?

  • Since spiking aggressively higher and reaching our 6500 target last week, we have been waiting for prices to consolidate before reconsidering longs.
  • Yesterday’s small bullish candle broke above a retracement line and suggests momentum is reverting to the dominant trend.
  • A clear break above 6500 (or yesterday’s high) brings 6650 into focus for bulls.


Watchlist Update:

USD/JPY: Bias remains bearish below 105, with 104 in focus for bears.

USD/CNH: Bias remain bearish below 6.6360, with the 6.548 low in focus.

NZD/USD: Bias remains bullish above 0.6800 support with the 0.6930 and 0.69979 highs now in focus.

EUR/JPY: Removed from watchlist. Prices spiked above 124.30 but then promptly tested the 123.65 low.

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.

Bitcoin (BTCUSD): Removed from the bearish watchlist with a break back above 16,000. We’ll monitor for fresh long opportunities.

Brent (BRENT): Prices broke back above 44.20 and near-term direction appear ambiguous. We’ll reconsider shorts with a break beneath Friday’s low at 42.70.

EUR/AUD: Removed from watchlist with a clear break beneath the 50% retracement level. With several major support levels nearby the reward to risk ratio appears inadequate for short positions.

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