Asian stocks went higher on Tuesday, as optimism about a recovery overshadows concerns over an increase in U.S. coronavirus cases. U.S. equity futures edged higher after the upbeat U.S.home sales data. Investors are weighing the improvement in economic data against the rising cases. Meanwhile, China also posted improving PMIs for both manufacturing and services.
Dollar trades sideways as the stock market whipsaws. The National Association of Realtors said on Monday its Pending Home Sales Index, based on contracts signed last month, surged 44.3% last month, the largest increase since the series started in 2001, to 99.6. Still, contracts remained below their level of 111.4 in February before the COVID-19 lockdown. But recent economic data have been showing a continuously improving economy which gives investors hope about further recovery.
Copper prices edged higher, driven by supply disruption in top producer Chile, as they face pressure from the Covdi-19 pandemic and work unions to improve employee’s working conditions. Although dwindling stockpiles is a key factor in the recent rally, prices could retreat from its recent high as demand outside of China remains weak.
Gold prices held steady and could be heading towards their biggest quarterly gain in more than 4 years, as fears over the surge in the number of Coronavirus cases worldwide dampened any hopes of a quick economic recovery, buoying demand for the safe-haven metal.
Oil prices edged lower at the start of the Asian trading session despite the overnight rally due to better-than-expected US housing data release. While the markets are seeing positive effects of the supply cut from OPEC+, a the upside looks to be limited as participants continue to keeep a nervous watch on the coronavirus resurgence in the US. Oil prices continue to move in a broad range, similar to the CAD.
Technical & Trade views
USDCAD (Intraday bias: bullish above 1.3655)
We turned bullish as price is approaching intermediate support where the horizontal overlap support is. Price is likely to bounce off the level towards 1st resistance where the horizontal overlap is.
UKOIL (Intraday bias: Bearish below 41.76)
Oil drifted higher, however still within an ascending channel. With market reversing below channel resistance, a short term drop below 1st resistance at 41.76 towards 1st support at 40.54 is expected. Stochastics is also reversing below resistance where price reacted in the past.
XAUUSD ( Intraday bias: Bullish above 1768.59)
Price is testing our first 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 2.69663)
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.