- 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.
