Asia stocks opened modestly lower on Thursday as investors weighed doubts on the timing of a new U.S. spending bill and concern about an escalation of tensions with China. The dollar continued to edge lower, near the weakest since March. Shares of Microsoft Corp. dropped and Tesla Inc. surged after the companies released earnings following the close of regular trading.
USD continued the slide as the stock market continued the risk-on rally. S&P 500 rose to a five-month high on Wednesday night.Utilities, real estate and industrial shares were leading the gains. The U.S. government is discussing a short-term extension of unemployment insurance before the benefits lapse. The vaccine optimism is still dominating the market sentiment.
Copper prices dipped as risk sentiment was depressed, amid renewed Sino-US tensions and uncertainty over the timing of American’s new stimulus package. Looking ahead, prices could continue on its uptrend, fuelled by massive buying from top consumer China, low stocks and supply disruptions in key producer countries, such as Chile and Peru as they battle the Coronavirus.
Gold prices rose to its highest since September 2011 on Wednesday as depressed market risk sentiment and a weaker USD buoyed demand for the safe haven asset. Looking ahead, in line with our fundamentals, prices are facing bullish pressure from our trend line and we could be seeing room for further upside.
Oil prices drifted sideways and was seemingly stuck around the $42 a barrel price as investors took into account a surprise gain in American crude stockpiles and renewed tensions between Beijing and Washington. However, further upside potential looks to be possible as globally, the race for the coronavirus vaccine seems to be gaining pace with positive outcomes happening at various trials. In line with oil prices, CAD drifted sideways against a weakened USD.
Technical & Trade views
USDCAD (Intraday bias: bearish below 1.3416)
We turned bearish as price is breaking below 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 44.13)
Oil holding above ascending trendline support with technical indicators showing further bullish momentum. A short term push up above 1st support at 44.13 towards 1st resistance at 44.86 is possible.
XAUUSD (Intraday bias: Bullish above 1857.63)
Price is facing bullish pressure from our ascending trend line and first support, in line with our 23.6% retracement and 100% extension, where we could see a bounce above this level. The Ichimoku cloud is showing signs of bullish pressure as well.
XCUUSD (Intraday bias: Bullish above 2.86093)
Price is facing bullish pressure from our ascending trend line and first support, where we could see a bounce above this level. Ichimoku cloud and 50 period EMA are showing signs of bullish pressure as well.