Stocks in Asia started the week in a mixed sentiment. The thin trading volumes once again indicated a lack of conviction and as investors mulled the impact of coronavirus outbreaks. California reported record new cases and Florida infections jumped more than the weekly average. The Aussie erased earlier losses seen in the wake of one Australian state tightening restrictions due to fresh cases. Treasuries were little changed.
USD stabilized at the beginning of the week when Markets remain vulnerable as governments gradually ease coronavirus lockdowns and travel restrictions to revive economic growth while attempting to control the spread of Covid-19. Today’s economic calendar is pretty quiet and investors are looking for clues more from the risk sentiment, Currently, the risk sentiment is more skewed to the downside as uncertainties remain in the market.
Copper prices remain under pressure as investors tread cautiously in an environment where we could be witnessing a second wave of the Covid-19 infection which could hamper the global economic recovery. In line with the fundamentals, prices are facing bearish pressure from our first resistance where a break below the key support level could see a steep drop in prices.
Gold prices edged higher, driven by concerns that we could be seeing a second wave of the pandemic, which buoyed demand for the previous metal. Prices recorded the month’s as surging Covid-19 infections dampened market risk sentiment with the World Health Organization reporting a record increase in global coronavirus cases on Sunday, with the total rising by 183,020 in a 24-hour period. Meanwhile, market participants are also keeping a close watch on the developments in Hong Kong, after a new security law for the territory showed Beijing will have overarching powers over its enforcement. Looking ahead, Gold prices could see further upside as the economic and political uncertainty buoy demand for the safe haven asset.
Oil prices drifted sideways within a broad range as investors weighed signs of rebounding demand against a resurgence in new coronavirus cases. While OPEC and its allies still look committed to further production cuts, California has now reported new covid19 cases and are seeing infections jump by more than the weekly average. This follows a 2nd wave of virus seen in Beijing. In line with oil prices moving sideways, the CAD was seen muted as well. However, the USDCAD fell due to slight weakness in the USD.
Technical & Trade views
USDCAD (Intraday bias: bearish below 1.3621)
We turned bearish as price is approaching 1st resistance where the 61.8% fib retracement and horizontal swing high are. Price is likely to reverse off the level towards 1st support where the 61.8% fib extension is.
UKOIL (Intraday bias:Neutral between 41.66 and 42.74)
Oil price drifted sideways within a range since friday. Price is currently holding between resistance at 42.74 and support at 41.66. Technical indicators are showing mixed signals as well. With no good levels for entry, we prefer to remain neutral for now. Breaking above 1st resistance should see price going higher towards 2nd resistance. Otherwise, breaking below 1st support should see price dropping towards 2nd support.
XAUUSD ( Intraday bias: Bullish above 1765.90)
A break above our upside confirmation at 1765.90 could see a further push up to our first resistance level, in line with our -27.2% and 227.2% fibonacci retracement. RSI and Ichimoku cloud are showing signs of bullish pressure as well.
XCUUSD ( Intraday bias: bearish below 2.60091)
Price is facing bearish pressure from our resistance, in line with our horizontal swing high resistance and 161.8% 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 127.2% fibonacci extension. Stochastic is facing bearish pressure from our resistance as well. A break below our downside confirmation level would provide the bearish acceleration to our first support target.