Range Markets

US equities declined yesterday as traders remained concerned about the rising number of Covid-19 cases in the United States and the looming deadline for stimulus. The S&P 500 declined by 1.6% while the Nasdaq 100 index fell by 1.7%. Yesterday, health officials confirmed more than 57,000 new cases, in line with last week’s average. With no vaccine or drug insight, it means that the US still has a long way to go. Meanwhile, investors are still focused on stimulus as Nancy Pelosi’s and Steve Mnuchin teams continue deliberating. Still, with two weeks before the election, there are limited chances that the two sides will reach an agreement.

The Australian dollar declined as the market reacted to the latest RBA minutes. The minutes showed that the Australian central bank was committed to providing more support for the economy. This could include expanding the government bond buying program and lowering interest rates to zero from the current 0.25%. The minutes said that the board, “agreed to maintain highly accommodative policy settings as long as required and to continue to consider how additional monetary policy could support jobs.” A rate cut by the bank will lower lending rates for companies and individuals. But it will hurt the country’s banks which are operating in thin margins.

The price of crude oil fell in overnight trading as investors reflected on the rising Covid-19 cases in the world. Brent and West Texas Intermediate (WTI) dropped by 0.77% and 0.68%, respectively. Globally, the number of cases has risen to more than 40 million people while deaths have risen to more than 1.2 million. The US leads with more than 8.1 million cases and 220k deaths. The rising cases mean that it will take time for oil demand to come back. Later today, the American Petroleum Institute will release the inventories numbers.


The EUR/USD price rose to an intraday high of 1.1770. On the hourly chart, the price is above the 15-day and 25-day exponential moving averages and is at the same level as the highest point on October 14. The price is above the 25-day exponential moving average and is also below the triple exponential moving average (TRIX). It is also forming a bullish pennant, which means that the price could bounce back today. If it does, the key level to watch will be yesterday’s high of 1.1793.


The XBR/USD price declined to a low of 42.57. On the four-hour chart, the price is between the 14-day and 25-day moving average. It is also slightly below the triple top level of 43.70 while the Relative Strength Index (RSI) is at the neutral level of 45. The average true range, which measures volatility, has also started to fall. Therefore, for today, the price will likely be under pressure as bears target moves below 42.00.


The AUD/USD price dropped to a low of 0.7040. On the four-hour chart, this price is the lowest it has been since September 28. It has also moved below the 23.6% Fibonacci retracement level and below the bearish flag pattern that was forming last week. It is now in the fifth wave of the Elliot wave while the signal and main lines of the MACD are below the neutral line. Therefore, the price will likely continue falling as bears aim for the support at 0.7000.

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