Stocks in Asia were mixed on Wednesday as concerns emerged that the Moderna vaccine study is still in its very early stages. There seems to be a long way to go before we can beat the coronavirus. Treasuries advanced higher.U.S.-China tensions remain on investors’ radar. Nasdaq is set to unveil new rules for IPO including tougher accounting standards that will make it harder for some Chinese companies to list on the exchange.
USD pared some losses as the risk-on sentiment triggered by Moderna’s vaccine was capped by the concerns that the vaccine is still at early stages. On the data front, U.S. Housing starts fell 30.2%, Permits 20.8%, and completions 8.1% due to Covid-19, which recorded the greatest month-over-month decline in the history of the stats. This has helped to cap the risk sentiment and could support USD as risk aversion comes back.
Copper prices hit a two-month high on Tuesday after encouraging data from a potential Covid-19 vaccine lifted hopes of a faster economic recovery, although renewed Sino-U.S. tensions could cap the gains of the metal. Since the pandemic outbreak, tensions between US and China grew, raising concerns that the world’s two leading economies might engage in another round of tariff spat that could further impede the recovery of the global economy.
Gold climbed higher, driven by investors’ uncertainty over how economies would emerge from the damage caused by the pandemic, although optimism about a potential vaccine to fight against the Coronavirus limits the upside of the currency. The macroeconomic landscape has supported the gold rally, since it’s widely viewed as a hedge against inflation and currency debasement.
Having advanced strongly for the last few weeks, the oil rally came grinding to a halt as prices drifted slightly lower. This probably due to market participants holding back, taking into account what seems to still be a precarious global economic outlook. Markets across the board were also seen to show some sort of cautious optimism as euphoria over Mordena’s virus vaccine subsided due to a lack of critical statistical data. Further, US Fed Chairman, Jerome Powell, also warned that Americans could start losing their homes as unemployment numbers stay high. The CAD weakened momentarily against the USD however, market participants are still paying attention to core CPI data that would be released later today.
Technical & Trade views
USDCAD (Intraday bias: bullish above 1.3880)
We turned bullish as price is approaching our first support in line with our 78.6% fibonacci extension where we are expecting a further bounce to our first resistance level, in line with our horizontal swing high resistance.Ichimoku is indicating more pushdown towards 1st support is possible.
UKOIL (Intraday bias: Bullish above 33.86)
Oil price drifted lower however still holding above longer term moving average. A short term push up above 1st support at 33.86 towards 1st resistance at 35.75 is expected. 1st resistance is also finding confluence with a graphical swing high and also a key Fibonacci extension ratio.
XAUUSD ( Intraday bias: bearish below 1767.712)
Price is approaching our first resistance, in line with our 127.2% fibonacci retracement and 100% fibonacci extension where we could see a drop to our first support level. Stochastic is approaching resistance as well where we might see a reversal below this level.
XCUUSD ( Intraday bias: bullish above 2.36425)
Price is approaching our support at 2.36425 where we remain bullish above this level and could see a bounce to our first resistance level in line with our horizontal swing high resistance and 61.8% fibonacci retracement. A break above our upside confirmation level would provide the bullish acceleration to our first resistance level. RSI and Ichimoku cloud are showing signs of bullish pressure in line with our bullish bias.