Stocks in Asia were mixed on Wednesday after the S & P 500 closed well off its earlier 1.2% gain on reports of a surge in cases in several hotspots in the South and Southwest of the U.S.. These rising cases could indicate that there’s a possibility that plans to ramp up openings could be delayed or rescheduled. Still, the Nasdaq index hit an all-time high.
USD headed for a third straight day of declines with Treasuries flat. Although we have increasing cases from the U.S., the market is also cheering up the good news that the U.S.-China trade deal worth $200 billion is “fully intact. Going forward, USD could see more weakness as the geopolitical risks eased.
Copper prices rallied higher, driven by an increasing number of Covid-19 infections in South America; one of its biggest producing regions, thus threatening supply disruption for the metal. However, looking ahead, the upside in prices remain capped over fears of a second wave of Covid-19 infection seen worldwide, which could dampen demand for the metal. In line with our fundamentals, price is facing bearish pressure from its resistance and a break below the ascending trend line could trigger a further drop in prices.
Gold prices rallied to its highest level since 2012 as demand for the safe haven asset surged, boosted by increasing concerns over the spike in the number of Covid-19 cases. According to Reuters, Texas, Arizona and Nevada set records in their coronavirus outbreaks, and 10 other states from Florida to California were grappling with a surge in infections. Looking ahead, Gold prices could edge higher driven by the uncertain economic landscape that we are currently facing.
Oil prices fell over night before drifting sideways at the start of the Asian trading session as the American Petroleum Institute (API) reported that there was a further build up in crude oil inventories. Further, the confusion on the trade deal between the US and China added to the weakness of the commodity. During today’s trading session, oil price drifted sideways as investors pretty much stayed on the sidelines whilst awaiting further developments. In line with the indecision of oil prices, CAD drifted sideways against the USD as well.
Technical & Trade views
USDCAD (Intraday bias: bullish above 1.3490)
We turned bullish as price is approaching 1st support where the 50% fib retracement and 78% fib extension are. Price is likely to bounce off the level towards 1st resistance where the horizontal swing high is.
UKOIL (Intraday bias: Bearish below 43.07)
Oil broke below ascending trendline support (now resistance). With price holding below moving average and MACD crossing below 0, showing bearish momentum, a drop below 43.07 towards 1st support at 41.88 is expected.
XAUUSD ( Intraday bias: Bullish above 1765.90)
Price is testing our intermediate 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 2.68889)
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 50% fibonacci retracement. Stochastic is facing bearish pressure from our resistance as well. A break below our ascending trend line could provide the bearish acceleration to our first support target.