Daily Market Analysis

Market Focus

Stocks whipsawed as investors weighed the chances of a compromise on a new stimulus package amid concern over an uptick in global coronavirus cases.

The S&P 500 pared most of its earlier rally after optimism faded that Congress would reach a spending deal with the White House. Stocks surged midday on news that Treasury Secretary Steven Mnuchin and the Democratic House leader were open to fresh talks. But a report that Speaker Nancy Pelosi’s fresh overture deviated only slightly from previous offers sparked concern that the two sides would remain far apart.

House Democrats have started drafting a stimulus proposal of roughly $2.4 trillion, according to multiple House Democratic officials. While smaller than the $3.4 trillion package the House passed in May, the new proposal remains much larger than what Senate Republicans have said they could accept. President Donald Trump has indicated he’d be willing to go as high as $1.5 trillion.

According to data, tracks economic activity show a slowdown in the recovery from the height of the lockdowns, with Americans again cutting back on flights and going out to eat less often. As Europe reemerged as a hot spot for Covid-19, the U.K. reported the highest number of new cases in a single day since the start of the pandemic, while France’s new infections jumped to a record.

Market Wrap

Main Pairs Movement

Greenback halts a four-day winning streak Thursday then turned earlier broader gains into a mixed performance as stocks rallied after the London bond market close. U.S. data on Thursday showed sales of new homes in the U.S. unexpectedly advanced in Aug. to the highest level in almost 14 years. On the other hands, dismal data of initial jobless claims was softer than anticipated that get 870k figure this week.

Euro dollar is hovering +0.1% as halted a four-day losing streak after trading to a two-month low at 1.1627 after German released German Ifo Business Climate index record 93.4 in September which miss expectation but creep up against last month.

Aussie has been worst hit for the fifth consecutive days, bout of dollar strength and currently dip into a two-week low around 0.704 area.

COVID-19 Data (EOD):

Technical Analysis:

XAUUSD (H4)

In the 4 hour chart, gold has closed at 1867.98 as writing halt multi day losses. It totally regained after market slipped in morning session as shares market unstable once slipped to 2 months lows, around the 1850 region. Fed’s official reiterated for more fiscal support was likely to be necessry at interview. In other words, official is warning another outbreak or even severe on Cov-19 lead market wager on inflation will miss Fed anticipated in earlier meeting that give a chance for gold.

However, we still believe it just a trim for short term. Gold market will struggle between a range in 1908.03 and 1846.23 and following a modest downward momentum in line with bullish greenback.

Resistance: 1880.66, 1908.03

Support: 1846.23, 1813.95

GBPUSD (H4)

Sterling posted a modest intraday advance, reaching a daily high of 1.2780. UK Finance Minister Rishi Sunak unveiled an emergency jobs scheme, which will result in the government and firms top up wages of workers whose jobs were affected by the pandemic. The new Job Support Scheme will cover three-quarters of normal salaries for six months starting next November. The Sterling was also supported by the September CBI Distributive Trades Survey on realized sales, which unexpectedly jumped to 11% from -6% and against the -10% expected. This Friday, the BOE will publish the Q3 Quarterly Bulletin.

For RSI index, it slightly beefs up to neutral area but so far suggesting a modest correction in tightly range as our critical resistance and support. Other than this, both MA indicator start getting smooth at this stage notwithstanding remained upwind at this stage.

Resistance: 1.2775, 1.2847, 1.300

Support: 1.2717

EURUSD (H4)

The EUR/USD is ending Thursday with modest gains around and hover 1.1670 as writing, although it posted a lower low for the week at 1.1626. Demand for the greenback prevailed throughout the first half of the day amid ruling risk aversion in daily risk aversion sentiment. However, dismal US data and equities bouncing off daily lows, put some pressure on the dollar in the last trading session of the day. Other than this, market is ahead of Aug. U.S. durable Goods Orders, it expect modest extension along with last month.

According to RSI aspect, it pulls back from nearly over sought area to almost 40, but barricade by 60-MA at the moment.

Resistance: 1.1718, 1.1766

Support: 1.1635, 1.1558

Economic Data