- The British pound was the strongest major overnight on news that Brexit talks were back on and EU’s chief negotiator saying the prospects of a deal with Britain was still possible. GBP/USD rallied 1.6% and closed at a 6-week high.
- The US dollar index (DXY) fell to a 7-week low on news Trump and Pelosi were edging towards a larger stimulus package, even though McConnell is against the proposal. USD/JPY hit a 1-month low as investors dumped the dollar as a safe haven-asset in favour of the yen. Equities didn’t take the bait and closed flat but slightly lower for the session. European equities were broadly lower by session end.
- In crypto, Bitcoin rallied to its highest level since June 2019 and enjoyed its most bullish session in 3-months.
- WTI and Brent sold off sharply from their range highs, down -3.5% and -3.4% respectively.
Today’s Calendar Events (Time are GMT+10 Sydney)
- No major economic data is scheduled today
Gold (XAU/USD): Bullish Interest Slowly Gains Traction
- After a few non-eventful sessions, gold prices pierced the sloping resistance level yet yesterday’s high remained capped by 1933.17 resistance.
- The 50-day eMA remains supportive of the longer-term, bullish trend so we continue to wait for momentum to fully realign with this trend.
- A clear break above 1933.17 brings the highs around 2,000 and potentially 2075 into focus.
- Swing lows around 1891.57 and 1882 can aid with risk management for bulls.
ASX 200 (AUS200): Bears Break it Out of Range
- Prices finally broke out of the 6147 – 6255 range to the downside, putting bears firmly back within control.
- Retracement traders could target the 6,000 support zone or the 38.2% Fibonacci level whilst prices remain below 6200.
- Bears could consider fading into minor rallies below the 6172/6200 zone. If bullish momentum returns it will be removed from the watchlist.
- However, the longer-term bias remains for an eventual break above 6,250 given the stronger bullish momentum that initially took prices towards October’s high.
Ethereum (ETHUSD): Ready to Follow Bitcoin’s Lead?
- Given Bitcoin’s surging rally, we are now waiting to see if Ethereum (ETH) can follow Bitcoin’s bullish lead.
- ETH appears to be carving out a base and a bullish flag projects an interim target around 420/425.
- Yesterday’s bullish engulfing candle closed to a new cycle high and above the monthly pivot to show a breakout could be on the cards.
- Bulls could consider using 360.54 support, the bullish engulfing low or the monthly pivot to aid with risk management / invalidate the bullish bias depending on the timeframe traded. Because if ETH is to follow Bitcoin then it could be headed for the highs around 480, but higher levels of volatility may also require a wider stop.
AUD/CHF: Both targets reached and prices are now retracing. We will continue to monitor for a potential swing high before reconsidering shorts.
EUR/AUD: The bias remains bullish above 1.6600 to for a run towards our 0.7100 target. However, yesterday’s 2-bar reversal stalled just above this key level so volatility needs to subside soon.
EUR/GBP: Removed from watchlist. Prices neither consolidated nor broke above Tuesday’s high, before aggressively rolling back over towards 0.9000.
Copper (XCUUSD): The bias remains bullish above 309, or above 300 for longer-term traders. We’d prefer to see prices consolidate or retrace before considering longs.
Bitcoin (BTCUSD): Prices blew past our 12,000 and 12,400 targets and prices are residing around 13,000. Whilst bulls clearly remain in control we’d prefer to wait for a period of consolidation or a retracement before reconsidering longs.