US stocks continued rallying as investors remained optimistic about a new stimulus deal. The Dow Jones rose by 357 points while the S&P 500 closed at a record high of $3,360. The top-performing sectors were energy and industrials with the best-performing companies in the Dow being Caterpillar and Dow Inc. The indices rallied after Trump signed an executive order that provided more financial support to households and companies. It will extend the unemployment benefit at a rate of $400 per week and defer payroll taxes. Meanwhile, in Asia, the main indices are in the green, with the Hang Seng gaining by 2.3% and the Shanghai composite gaining by 0.35%.
The British pound rose during the Asian session even after the UK’s trade talks with Japan stalled. The negotiations stalled after Liz Truss, UK’s trade secretary, insisted on bringing Stilton cheese into the negotiations. Her goal is to show that the country can get a better trade deal than the one obtained by the EU. Still, she faces a major challenge since Japan has insisted that it cannot give the UK a better deal than that of the EU because of its smaller population. Later today, we will receive the June employment data from the UK.
The US dollar strengthened in overnight trading as traders reacted to the JOLTs report by the Bureau of Labour Statistics. The report showed that there were more than 5.88 million job openings at the end of June this year. That was better than the previous 5.3 million jobs. The number of layoffs and separations also declined. The report came two days after the bureau released strong July jobs numbers. The data showed that the economy added more than 1.8 million jobs as the unemployment rate fell to 10.2%. The currency will later react to the producer price index data from the US.
The EUR/USD pair declined to an intraday low of 1.1725. On the four-hour chart, the price is below the 50-day EMA and slightly above the 100-day EMA. Also, the RSI has moved to the oversold level of 30. Most importantly, the pair seems to have formed a double top pattern at last week’s high of 1.1910. A double top is usually a bearish reversal pattern, which means that the price is likely to continue falling as bears aim for the next support at 1.1600.
The XAU/USD pair declined to a low of 2020 during the Asian session. On the four-hour chart, the price is slightly above the 50-day EMA. It also seems to have hit a top at last week’s high of 2,076. Also, the RSI has moved from the overbought level of 70 while the DeMarker has fallen to the oversold level of 30. Like the EUR/USD pair, it seems like the XAU/USD pair has hit a top, meaning that the price may continue falling as bears aim to move below 2,000.
The USD/CAD pair dropped to an intraday low of 1.3325 during the Asian session. On the four-hour chart, the price is below the descending trend line that is shown in white. It is also slightly below the short and medium-term moving averages while the RSI has fallen to 44. Also, the signal and main line of the MACD have made a bearish crossover, meaning that the downward trend is likely to continue.