Asian stocks opened higher on Friday after U.S. shares ended higher on Thursday, as investors weighed the prospects for additional stimulus against the spike in American virus cases.S&P 500 contracts were flat after a rally in the final hour of a choppy session left the index up about 1%. Worries grow that the economies reopening could progress more slowly, which has dented the market sentiment.
USD stands firm on Friday as the rising cases in the U.S. cast doubt over the reopening of the economy. Safe havens are benefiting from the uncertainties in the market. Also supporting the USD is the broader rise in corporate demand typically seen towards the end of the month.
Copper prices pushed higher, driven by threats of a supply disruption with another Coronavirus death in Chile. According to Reuters, Chilean state miner Codelco, one of the world’s largest producer of copper, reported the death of a third worker from COVID-19, piling pressure on the industry as unions seek greater protection for employees. However, the upside in the metal remains capped with the Dollar strengthening, as investor flock to the US dollar for shelter against the gloomy outlook. Meanwhile, IMF has also slashed its growth forecast, citing that the economic damage brought about by the pandemic was deeper than expected, which could result in a lower demand for the metal as well.
Gold prices edged higher today and looks set for its third week of consecutive gains as concerns over the spike in the number of Coronavirus cases in Brazil, Latin America and India dented hopes of a swift economic recovery, driving investors to safe-haven assets such as gold and US dollar. Yesterday, we saw a dip in prices, mainly attributed to the dollar strength. Looking ahead, we maintain a bullish bias on Gold, keeping in mind that it thrives in an uncertain environment and is often used as a hedge against currency debasement and inflation.
Oil prices climbed slightly higher overnight. However, despite rebounding, oil looks set to end this week lower once again. This could be it’s 2nd weekly decline as surge of virus cases in US continues to cloud the demand outlook. However, Russia still insists on curbing their output. Thus, it remains to be seen if this output cut would do anything to help oil prices keep afloat. This mixed sentiment in the oil market is echoed by the CAD as the CAD generally traded sideways against the USD.
Technical & Trade views
USDCAD (Intraday bias: bullish above 1.3618)
We turned bullish as price is approaching 1st support where the horizontal pullback support is. Price is likely to bounce off the level towards 1st resistance where the horizontal overlap is.
UKOIL (Intraday bias: Neutral between 42.28 and 40.70)
Oil bounced higher however it now holds between key resistance at 42.28 and key support at 40.70. With technical indicators giving mixed signals, such as price holding above moving average, and stochastics testing resistance we prefer to stay neutral for now with no good entries.
XAUUSD ( Intraday bias: Bullish above 1751.59)
Price is approaching our first support where we could see a bounce above this level to our first resistance level. A break above our intermediate resistance would provide the bullish acceleration to our first resistance target. Ichimoku cloud and RSI are showing signs of bullish pressure in line with our bullish bias.
XCUUSD ( Intraday bias: bearish below 2.68889)
Price is facing bearish pressure from our first resistance 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, 38.2% fibonacci retracement and 78.6% fibonacci extension. Stochastic is facing bearish pressure from our resistance as well.