- Higher jobless claims and a rise in coronavirus cases in Europe initially saw US equities tumble. The risk-off tone saw equities and commodity FX fall in tandem and the VIX rise to a 6-day high.
- However, revived talks near the end of the session saw indices rebound from their lows. Still, a disagreement between President Trump and Republican Leader McConnel over the size of the Covid-relief package remains in place.
- Australian unemployment rate rose to 6.9% although this was less than the 7.1% expected. Headline employment contracted by -29.5k jobs, although this should not be a surprise given the unexpected rise of 129k jobs last month.
- Chinese producer prices contracted faster than expected and CPI missed forecasts to suggest the recovery could be slower than anticipated.
- We could be in for a quiet session today in Asia with a lack of scheduled economic data.
- Final CPI reads are released for Europe. With no revisions expected, any reaction is likely to be minimal unless we are treated to an unexpected and wide deviation from forecast.
- Are consumers confident and spending ahead of the election? We will find out later tonight with US retail sales and consumer sentiment released. USD pairs and US Indices will be focus around these data points.
Bitcoin (BTCUSD): Momentum Turns Higher
- A bullish engulfing candle has formed on the daily chart (not pictured).
- Given the retracement failed to ‘close the window’ (gap) the bias is now bullish above 11,180, although a small bullish hammer suggests a higher low may have formed at 11,242.
- A break above 11,703 assumes bullish continuation towards our 12,000 target initially, although upside target shall remain open.
WTI (WTI): Considering a Break Out of Range
- Both WTI and Brent are considering a break higher out of their ranges.
- The daily chart for WTI has found support above 39.25 and the 200-day eMA and yesterday’s lower tail suggest demand above this level.
- A clear break above 41.75 brings the 43.85 high into focus.
AUD/CAD: Can Prior Support Turn into Resistance?
- Bears broke beneath key support at 0.9390 overnight and now retraced to this level – we are now waiting to see if prior support turns into resistance. (Allow for some ‘noise’ around this level).
- If bearish momentum returns and forms a swing high the initial target at 0.9266 remains in focus.
- A break above the 0.9440 high invalidates the bearish H4 trend and therefore removes it from the watchlist.
CHF/JPY: Prices remain trapped in the 115.00 – 115.40 zone. The bias becomes bearish with a break below 114.97. A break above 115.40 removes it from the watchlist.
EUR/JPY: Target of 123.00 nearly reached. Happy to step aside and seek a more suitable shorting opportunity.
S&P 500 (US500): Removed from watchlist as bears are clearly in control.