Financial Markets Daily

In European trading On Tuesday, the DOLLAR index hovered around 93.50, while the euro/DOLLAR and sterling/dollar traded in tight ranges, while the dollar/yen edged lower, touching as low as 105.50. Spot gold traded near 1910. Today, the market focus on Federal Reserve Chairman Powell’s speech, is expected to cause sharp volatility.

News, the market is still focused on the progress of the new round of stimulus bill in the United States, and President of the United States trump’s health, although now trump have been discharged from hospital and return to the White House, and plan to return to the campaign, but analysts say the move is likely to cause a “strong opposition”, shows that he didn’t take the virus seriously. The approach of the US election has also created uncertainty.

Dollar: After selling in the 93.30 area on Monday, the DOLLAR index has at least managed to hold off a downward trend and has attempted some rallies against a backdrop of mixed risk appetite so far.

Meanwhile, market talk continues to revolve around the resumption of political discussions in the US about another stimulus package, with uncertainty in the political arena given President Trump’s health and the approach of the November election.

From a technical perspective, if the USD index breaks through 94.20(the 38.2% Fibonacci retracement of 2017-2018), the target will be 94.74 and eventually reach 95.10(100 daily average). On the other hand, initial support was 93.34, followed by 92.70(September 10 low) and 91.92(2017-2018 23.6 percent Fibonacci retracer).

Euro: FXStreet analyst Yohay Elam notes in a note that Tuesday’s 4-hour chart shows a bullish outlook, with the next resistance at 1.1870. The initial support is at 1.1735.

The euro/dollar traded on both the 50 – and 100-hour SMAs and benefited from upward momentum. But it was hampered by the important psychological barrier below 1.18, which is also where the two-week high and 200SMA hit prices. The upper resistance is at mid-September highs of 1.1870 and 1.1895 and 1.1915.

Support was at 1.1735, which provided support in early September, followed by a support of 1.1730 and 1.1610 last week.

Sterling: European stocks opened higher, lifting overall market sentiment and weighing on the dollar, while optimism about a possible U.S. fiscal stimulus deal also kept the dollar under pressure. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are scheduled to discuss the additional $1.5 trillion on Tuesday.

If GBP/USD breaks through 1.3020, the September 10 high of 1.3035 and the 61.8 percent Fibonacci retracement around 1.3175 will be key to watch. On the other hand, a rising wedge below 1.2895 would be initial support, and a break below 1.2860 would be a dip below the 100-cycle average.

Yen: Analysts believe the USD/JPY is again facing strong headwinds around the 105.80 area, with markets cautiously optimistic as potential fiscal stimulus in the US and Trump’s discharge from hospital weaken the dollar’s strength against its major rivals. The next topic to watch is federal Reserve Chairman Colin Powell’s speech on the economy.

From a short-term technical perspective, bulls are positioning themselves for the next rally as wedge breaks appear on the daily chart. Thus, a daily close above trendline resistance of 105.75 would confirm a long break, opening the door to a downslope 100-day simple moving average of 106.55.

On the downside, usdJPY could fall back to its 21-day daily support level of 105.43 before breaking below to test Friday’s low of 104.93.

Gold: Gold is holding above $1,900, FXStreet analyst Dhwani Mehta said. Prior to Fed Chairman Colin Powell’s remarks, with technical indicators pointing to further gains, the path of least resistance for gold was upward.

With fundamentals still on the back burner, the U.S. stimulus talks are likely to remain in focus on Tuesday. Mr. Trump’s progress will also be closely watched for fresh impetus. Federal Reserve Chairman Colin Powell will give a closely watched speech on the U.S. economic outlook at the Annual meeting of the National Association for Business Economics.

Gold is expected to extend Monday’s gains, marking an hour of potential bullish flag formation. This is a bullish continuation pattern that will be confirmed by the hour-long close above downtrend resistance at $1913.51. The target for this configuration is $1940. The one-hour chart RSI turned negative, but was well above its median at 53.11, supporting further gains.

On the downside, downtrend line support at $1906.51, or temporary support for bulls. A break below that level would threaten the $1,900 level.

Silver: Analysts say silver has failed to break a one-week high set the previous day due to deteriorating RSI conditions. It should also be noted that the 50 percent Fipo retracement of the September 18-21 decline also constitutes the latest resistance around $24.40/45. So the bears will gradually regain control, targeting $24.

However, short sellers must clearly break the triangular support line at $23.90. Then short sellers could point to this month’s low near $23.10 and the previous month’s low near $21.65.

In contrast, a sustained break above $24.45 would push silver to near its September 22 high of $24.90/95. Any further gains, however, will depend on how the precious metal breaks through the round $25 mark or points to a 78.6% Firpo retracement near $26.

Leave a Reply

Your email address will not be published. Required fields are marked *