- Technology stocks led Wall Street higher overnight ahead of earnings season, helped by expectations of a coronavirus relief package. The S&P 500 (US500) cash index closed less than 20 points from its all-time high and Asian shares are set to open higher this morning.
- The Bank of England (BOE) have asked UK banks just how prepared they are for zero or negative interest rates and set a deadline for banks to respond by November 12th. BOE Governor Bailey said in a speech they are not near addressing whether they should use negative rates and will wait to hear back from the banks on their consultation.
- President Trump is set to hit the road and revert to his campaign trail as polls and bookmakers continue to shows Biden the clear favourite for the Presidency.
- It was a quiet session for FX majors with the exception of USD/JPY, which fell -0.3% with a daily range of 1432.2% of its ATR during the slightly risk-on environment.
- Chinese trade data will be released today, although no time is currently specified. Strong exports could be beneficial for AUD and risk sentiment in general.
- European FX pairs and indices will be in focus at 4pm (Sydney) for CPI data from Germany. As these are ‘final’ inflation numbers they tend to not vary too far from the initial reads, but can still create volatility if there is a surprise revision. And at 19:00 the ZEW economic sentiment reports are released for Germany and the broader Eurozone.
- EU ministers are to discuss Brexit ahead of this week’s summit.
- Broad CPI in the US is expected to rise to 1.4% YoY from 1.3% previously.
AUD/NZD: Seeking a Swing Low Confirmation
- A potential setup could be of interest for bullish swing traders after breaking out of a bearish channel.
- A higher low has formed since the September low and prices have pulled back and found support at a 50% retracement level. A bullish pinbar has also formed at this level.
- Bullish swing traders could wait for a break above a prior swing high to confirm a higher low at 1.0826.
- Bias remains bullish above the 50% level but we need to see a break higher first. Initial targets include the 1.0895/1.0900 range and 1.0937 high.
ASX 200 (AUS200): Bulls Eye Break Above 6200
- The AUS200 has remained within the 5700/5800 – 6200 range since May, but increasing bullish momentum suggests a breakout could be on the cards.
- The bias becomes bullish with a break above 6200.
- Bulls could consider longs with an initial break above 6200, or wait to see if it holds as support before committing.
- However, if we see a reversal pattern form below 6200 then be on guard for a dip lower.
Bitcoin (BTCUSD): Strong Momentum within Tight Bullish Channel
- Prices have continued higher with strong bullish momentum towards our target around 12,000.
- A tight bullish channel has formed with a series of prominent higher lows.
- The H4 trend remains bullish above the 11,173 low, H1 (or lower) traders could use the consolidation around 11,518 as potential support.
- A clear break of the channel / swing low invalidates the near-term bullish bias, although our target remains around 12,000 whilst prices hold above 11,173 (as this higher low failed to close the gap).
GBP/USD: Inverted H&S pattern remains in play above 1.3000 which targets 1.3300. If the pattern fails, the daily chart remains bullish above the 1.2845 low (RS).
USD/CHF: The bias remains bearish whilst prices remain beneath the broken correction line, although bears may look to fade into minor rallies within the resistance zone.
USD/CAD: Target around 1.3135 lows has been reached. We’d prefer to see some consolidation or a retracement before reconsidering shorts.
S&P 500 (US500): Bias remains bullish above the 3490/3500 support zone. However, given its proximity to all-time highs and yesterday’s extended range, intraday setups would be preferred and to stay nimble.
Nasdaq 100 (USTEC): The bias remains bullish above 11,600. However, for similar reasons to the S&P500, intraday setups would be preferred and to stay nimble.