Risky assets, including AUDUSD, were sold as  the President of the United States moved the markets by suddenly calling off the stimulus negotiations. According to a Republican commentator quoted on BBC, the President decided to stop the negotiations as the Speaker of the House of Representatives Nancy Pelosi continually rejected the proposals made by the Republican negotiators. Gold, Oil and equities were among the assets that were sold off as the USD strengthened following the news that President Trump abandoned the stimulus negotiations. We will take a look at some of these markets to see they would provide us with trading opportunities. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

Thursday last week we said that we are looking for sell signals below 0.7208 after which AUDUSD created a double top and moved to our updated T1 level at 0.7128 – 0.7144. Yesterday’s news about the cancellation of the negotiations drove the price lower to 0.7097 support slightly below 50% Fibonacci retracement. The pair has since rallied a bit above the 0.7128 level, a neckline in the double top formation the market created since last Thursday. If the POTUS doesn’t change his mind about abandoning the negotiations it’s probable that weakness in the AUDUSD continues. We look for sell signals below 0.7155. To take advantage of our analysis and ultra-low trading fees, register for an account and deposit here.

Gold was among the casualties after the news that it isn’t likely that there’d be economic stimulus available before the US presidential election. The price of the yellow metal dropped back to 1875 support level and has now bounced back a bit. At the time of writing this, the price of gold is moving past the 1886.20 resistance. It looks likely that gold runs to the area between 50% Fibonacci retracement at 1897 and 78.6% retracement at 1910 and see if the bulls run into trouble up there. This would create a lower high below 1921 and near the levels that used to hold the price of gold up in August and September. We said in our analysis at the end of September that we expect gold to rally and this would be a return move to major resistance levels and is likely sold once there. This all has now taken place. Gold is still trading in a downtrend but in order for this to continue market obviously needs to keep on making lower highs. If no sellers emerge below 1921 and no lower high is created then we will re-evaluate the technical picture. The big risk event today is the release of FOMC minutes during the US session. 

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Recent macroeconomic data releases

  • Canada Manufacturing PMI, 56
  • US ISM Manufacturing PMI, 55.4, 56 expected
  • US Average Hourly Earnings, 0.1%, 0.5% expected
  • US Non-Farm Employment Change, 661K, 900K expected
  • US Unemployment rate, 7.9%, 8.2% expected
  • Australia NAB Business Confidence, -4, -8 previous
  • EU Retail Sales,4.4%, 2.4% expected
  • US ISM Non-Manufacturing PMI, 57.8, 56.3 expected
  • Australian Cash Rate, 0.25%, 0.25% expected
  • Canadian Trade Balance, -2.4B, -2.1B expected

Macroeconomic data releases today

  • FOMC Member Kaplan Speaks
  • BOJ Gov Kuroda Speaks
  • ECB President Lagarde Speaks
  • FOMC Meeting Minutes

You may access the times and dates in the economic calendar here.

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Janne Muta
Chief Market Analyst
TIOmarkets.com

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