- An improvement in US employment data provided a slight risk-on tone overnight. US Jobless claims softened to 787k vs 860k expected, and continuing claims fell to 8.4mn vs 9.5 mn prior.
- Volatility indices traded broadly lower and S&P 500 and DJI closed higher, after false breaks beneath key support levels.
- Pelosi claimed that talks with Trump over the coronavirus relief package were moving forward yet Republicans remained sceptical.
- Volatility was mostly contained across FX majors, with daily ranges below their 10-day ATR.
- GBP/USD was the largest mover of -0.5%, paring gains made on positive Brexit headlines the prior sessions.
Today’s Calendar Events (Time are GMT+10 Sydney)
Final Presidential Debate: 12:00pm
At 12:00 pm it is the final presidential debate between President Trump and Democrat nominee Joe Biden. This time the moderator, Kristen Welker, will have the comfort of knowing each candidate will have 2 minutes of free speech whilst the other candidate’s mic will be muted. This is in response to the constant interruptions between the two candidates and this new setup is arguably going to make Trump’s debate tougher – because Joe Biden might get a few words in.
Flash PMI’s for UK, Europe and US are the main calendar events in later sessions, which puts USD, EUR and GBP pairs into focus for news traders.
AUD/JPY: A Corrective Bounce Could Be Due
- A bullish engulfing candle has appeared above a support zone to form a higher low.
- This suggests a corrective bounce could be due, and bulls could target the Fibonacci levels for a countertrend trade.
- A break beneath yesterday’s low invalidates the near-term bullish bias.
- Keep an eye on US indices for sentiment around today’s presidential debate.
Nasdaq 100 (USTEC): False Break Warns of Potential Bounce Higher
- We had been waiting for a clear break below 11,600 but yesterday’s Doji, which closed back above key support and the 38.2% Fibonacci level warns of a fakeout.
- A break above 11,800 switches the bias to bullish – and could be of interest to bullish swing traders.
- Nasdaq could be sensitive around the presidential debate – any signs of a clear winner could be bullish as it removes a could of uncertainty for investors.
Copper (XCUUSD): Retracement Phase Complete?
- We have been waiting for prices to retraced after breaking to a 28-month high and price action suggests a swing low could take shape.
- A 3-bar reversal has formed at the 50% retracement level, although the bullish trendline could also be used for a potential swing trade.
- The near-term bias remains bullish above 312, although 309 support could also be used for a longer-term trader.
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: On the backburner. Momentum has turned and on the cusp of breaching 1.6600 support. Yet the daily trend remains bullish so we will wait for this corrective phase to complete before reconsidering long opportunities.
Ethereum (ETHUSD): Prices followed Bitcoin’s lead and now approaching the initial 425 target. Near-term bias remains bullish above the monthly pivot (386) although a longer-term bullish bias above 360 could also be used if targeting 485 and beyond.
Bitcoin (BTCUSD): Prices blew past our 12,000 and 12,400 targets and a higher low has formed at 12656. The bias remains bullish above this level, a cross beneath it assumes a corrective phase.
ASX 200 (AUS200): Prices have retraced into the 6172 – 6200 resistance zone. Which may be of interest for countertrend bears to trade a retracement. A break above 6,250 assumes bullish continuation. Keep an eye on US indices for broader sentiment.