Stocks in Asia started higher on Tuesday after a strong session in the U.S. technology shares. An “indiscriminate approach” to a portfolio would largely have worked in April and May but going forward, investors may become pickier with what they are holding. Tech firms that could better weather a sluggish economic growth could be more favoured.
USD weakened when Nasdaq posted its seventh straight advance, closing at its highest on record. The greenback suffered from downbeat housing data. Also weakening the US currencies could be the risk-on momentum that favored Wall Street and the US bond yields at the start of the week.
Copper prices tumbled lower in these uncertain market conditions with increasing concerns over the global economic outlook after White House trade advisor Peter Navarro said the trade deal with China is “over,” and blamed Beijing for the delayed response in raising awareness of the Covid-19 outbreak. Elsewhere, the threat of a second wave of Covid-19 infection lingers as we saw a spike in the number of cases worldwide, particularly in Brazil and New York City.
Gold prices edged higher after surpassing its month high as the number of Covid-19 cases surged worldwide, prompting investors to seek the safe haven asset for shelter. Meanwhile, political tensions buoy demand for the precious metal as the EU warned China of the negative consequences should Beijing proceed with the new security law on Hong Kong as it deprives the human basic rights.
Oil prices pareed it’s decline as investors turned back to improving demand and easing supply after a confusion from the US White House trade advisor, Peter Navarro regarding US-China trade tensions. However the rise in oil prices was short lived as Oil price started drifting sideways during the Asian trading session. This most likely due to the rising number of cases coming out of the 2nd wave of coronavirus hitting developed countries. In line with oil prices, the CAD strengthened before taking a sideways stance during the Asian session as well.
Technical & Trade views
USDCAD (Intraday bias: bullish above 1.3490)
We turned bullish as price is approaching 1st support where the 61.8% fib retracement and 50% fib retracement are. Price is likely to bounce off the level towards 1st resistance where the 61.8% fib retracement is.
UKOIL (Intraday bias: Bearish below 43.40)
Oil price pushed higher and came close to June 2020 highs before drifting sideways. A short term drop below 1st resistance at 43.40, towards 1st support at 41.88 is to be expected. Stochastics indicator is testing resistance where price reacted in the past as well.
XAUUSD ( Intraday bias: Bullish above 1751.59)
Price is testing our support where we could see a bounce above this level to our first resistance level. Ichimoku cloud and RSI are showing signs of bullish pressure in line with our bullish bias.
XCUUSD ( Intraday bias: bearish below 2.68686)
Price is facing bearish pressure from our resistance, in line with our horizontal swing high resistance and 78.6%, 200% fibonacci extension where we remain bearish below this level and could see a further drop to our first support level, in line with our horizontal swing low support and 78.6% fibonacci extension and 50% fibonacci retracement. Stochastic is facing bearish pressure from our resistance as well.