Asian stocks saw a muted start to trading Wednesday, after a mixed U.S. session on doubts over the timing of a fresh stimulus program. Futures on the S&P 500 edged up after the gauge finished well off session highs. Earlier, tech shares led the Nasdaq Composite lower.
USD continued the slide as EUR was boosted by the EU stimulus plan. On Tuesday, the leaders of the 27 European Union member states approved a landmark $859-billion plan to help counter the economic stalemate that Europe is currently trapped in. This helps to boost the EUR and at the same time weighed negatively on USD.
Copper prices edged higher as the market sentiment turned bullish after the European Union passed a massive stimulus program. Elsewhere, a weaker dollar provided an additional boost to the rally after Trump warned that the US Coronavirus crisis could worsen as the outbreak escalated with California infections topping 400,000 while Texas also reported the second deadliest day.
Gold prices rose to its highest since September 2011 on Wednesday, as USD weakened with the expectation of more stimulus measures from central banks which could stoke inflation. Meanwhile, escalating tensions between US and China, as the US accused Chinese hackers of working with Beijing in trying to steal data from Wester companies in 11 nations, part of which includes Covid-19 research, could buoy demand for the safe haven metal.
Oil prices made a seemingly ‘final’ push higher during the overnight session before finally easing from it’s 4 months high. This came on the back of a surprise report that US crude stockpiles has gone up, raising fresh concerns about the diminishing demand for oil. Further the promised re-introduction of oil supply into the market by OPEC+ next month is still something at the back of investors’ mind. In line with oil prices, CAD strengthened overnight before tapering off at the start of the Asian trading session.
Technical & Trade views
USDCAD (Intraday bias: bearish below 1.3416)
We turned bearish as price is approaching our downside confirmation where the 1.272 fib extension is. Price is likely to drop further from the level towards 1st support if price could close below the downside confirmation.Ichimoku also indicates bearishness.
UKOIL (Intraday bias: Bullish above 43.84)
Oil drifted higher and reached previous target before pulling back. With price now resting above moving average and MACD still above 0, there seems to be room for further bullish momentum. A push up above 1st support at 43.84 towards recent graphical swing high at 44.86 is expected.
XAUUSD (Intraday bias: Bearish below 1848.56)
A break below our downside confirmation level could provide the bearish acceleration to our first support target. Stochastic is testing our resistance as well where we could see a reversal below this level.
XCUUSD (Intraday bias: Bullish above 2.94468)
Price is facing bullish pressure from our ascending trend line and first support, where we could see a bounce above this level. A break above our upside confirmation level could provide the bullish acceleration to our first resistance target. The Ichimoku cloud is showing signs of bullish pressure as well.