Key risk events today:

BoJ Outlook Report, Monetary Policy Statement and Press Conference; US Advance GDP q/q; US Advance GDP Price Index q/q; US Unemployment Claims; ECB Main Refinancing Rate, Monetary Policy Statement and Press Conference; US Pending Home Sales m/m.

(Previous analysis as well as outside sources – italics).

EUR/USD:

Risk aversion dominated market movement in recent trading, despite the safe-haven buck trading off best levels. EUR/USD sailed through the 1.18 level on the H4 timeframe, with enough force to take on August’s opening value at 1.1771 and test October’s opening value from 1.1730. Traders will also acknowledge a 61.8% Fibonacci retracement ratio at 1.1714 and a 1.17 handle lies beneath here, a level that capped downside on a number of occasions since October.

From the weekly timeframe, in spite of recent selling, we remain holding north of minor support at 1.1621, with the possibility of a run to the 2018 yearly opening value at 1.2004. Also important to consider is we recently unseated trend line resistance (mid-July), taken from the high 1.2555.

The technical position on the daily timeframe also still exhibits scope to explore higher terrain, with little seen in the way of obvious resistance preventing bulls from taking a run at resistance coming in from 1.1940. It is also worth acknowledging this base is sited just under weekly resistance mentioned above at 1.2004.

Global Markets: 

• Asian Stock Markets : Nikkei down 0.29%, Shanghai Composite up 0.46%, Hang Seng down 0.50%, ASX up 0.11% 
• Commodities : Gold at $1907.85 (-0.21%), Silver at $24.55 (-0.07%), Brent Oil at $40.62 (-2.38%), WTI Oil at $38.42 (-2.91%) 
• Rates : US 10-year yield at 0.758, UK 10-year yield at 0.215, Germany 10-year yield at -0.635  

News & Data: 

• (AUD) Trimmed Mean CPI q/q 0.40% vs 0.30% expected 
• (AUD) CPI q/q 1.60% vs 1.50% expected 
• (USD) CB Consumer Confidence 100.9 vs 102.1 expected 
• (USD) Durable Goods Orders m/m 1.90% vs 0.50% expected 
• (USD) Core Durable Goods Orders m/m 0.80% vs 0.30% expected 

Markets Update: 

Asian stock markets are mixed on Wednesday with investors turning cautious amid worries about the recent spike in coronavirus cases in the U.S. and Europe on global economic growth and on receding hopes for new U.S. stimulus before the presidential election. 

Shares in mainland China were higher on the day, with the Shanghai composite up 0.5% while the Shenzhen component advanced 0.9%. Hong Kong’s Hang Seng index dipped 0.3%, as of its final hour of trading. Shares in Australia were higher, as the S&P/ASX 200 added 0.1%. In Japan, both the Nikkei and the Topix closed 0.3% lower. 

The U.S. dollar index, which tracks the greenback against a basket of its peers, sat at 93.119 after seeing levels around 92.8 earlier in the week. Investors also bought back U.S. Treasuries, another safe-haven asset, pushing down their yields. Oil prices gave up much of their gains made the previous day as a jump in U.S. crude inventories and surging COVID-19 cases raised fears of an oversupply of oil and weak fuel demand. 

Upcoming Events: 

• 02:00 PM GMT – (CAD) BOC Monetary Policy Report 
• 02:00 PM GMT – (CAD) BOC Rate Statement 
• 02:00 PM GMT – (CAD) Overnight Rate 
• 03:15 PM GMT – (CAD) BOC Press Conference  

Key risk events today:

Australia CPI q/q; BoC Monetary Policy Report, Rate Statement, Overnight Rate and Press Conference.

(Previous analysis as well as outside sources – italics).

EUR/USD:

Europe’s shared currency, as you can see, regained some composure following a mild dip under the 1.18 handle against a broadly softer US dollar on Tuesday, with little motivation derived from stronger-than-expected US durable goods orders.

Breaching 1.18, as aired in previous research, shines the spotlight on August’s opening value at 1.1771. To the upside, aside from last Wednesday’s session peak at 1.1880, H4 Quasimodo resistance at 1.1888 is considered the next target. What’s interesting here is the level is sited close by a 127.2% Fibonacci projection point at 1.1895, the 1.19 handle, along with an AB=CD correction point at 1.1905 and a 1.618 BC projection plotted at 1.1919 (red zone).

Global Markets: 

• Asian Stock Markets : Nikkei down 0.04%, Shanghai Composite up 0.10%, Hang Seng down 0.68%, ASX down 1.70% 
• Commodities : Gold at $1903.40 (-0.12%), Silver at $24.48 (+0.26%), Brent Oil at $41.05 (+0.59%), WTI Oil at $38.80 (+0.62%) 
• Rates : US 10-year yield at 0.803, UK 10-year yield at 0.276, Germany 10-year yield at -0.581 

News & Data: 

• (NZD) Trade Balance -1017M vs -1015M expected 
• (USD) New Home Sales 959K vs 1025K expected 
• (EUR) German ifo Business Climate 92.7 vs 93.1 expected 
• BlackRock Sells Dollar for Asian Currencies Into U.S. Election 

Markets Update: 

Asian stock markets are mostly lower on Tuesday following the overnight sell-off on Wall Street amid worries about a renewed surge in coronavirus cases in the U.S. as well as Europe and on fading hopes for U.S. stimulus before next week’s presidential elections. 

Key risk events today:

US Core Durable Goods Orders m/m and Durable Goods Orders m/m; US CB Consumer Confidence.

(Previous analysis as well as outside sources – italics).

EUR/USD:

As the US dollar index latched onto a safe-haven bid from daily support at 92.62 on Monday, Europe’s shared currency rotated lower and bottomed north of the 1.18 handle on the H4 heading into London hours. Breaching the latter shines the spotlight on August’s opening value at 1.1771 and an AB=CD bullish pattern (green arrows) at 1.1769. Aside from last Wednesday’s session peak at 1.1880, H4 Quasimodo resistance at 1.1888 is considered the next upside target. What’s interesting here is the level is sited close by a 127.2% Fibonacci projection point at 1.1895, the 1.19 handle, along with an AB=CD correction point at 1.1905 and a 1.618 BC projection plotted at 1.1919.

From the weekly timeframe, we remain holding north of minor support at 1.1621, with the possibility of a run to the 2018 yearly opening value at 1.2004. Also important, we recently unseated trend line resistance (mid-July), taken from the high 1.2555.

Global Markets:

• Asian Stock Markets : Nikkei down 0.09%, Shanghai Composite down 0.82%, Hang Seng up 0.54%,ASX down 0.18%
• Commodities : Gold at $1900.90 (-0.23%), Silver at $24.34 (-1.36%), Brent Oil at $40.77 (-3.09%), WTIOil at $38.50 (-3.39%)
• Rates : US 10-year yield at 0.806, UK 10-year yield at 0.251, Germany 10-year yield at -0.591

News Data:

• (USD) Flash Manufacturing PMI 53.3 vs 53.5 expected
• (GBP) Flash Services PMI 52.3 vs 53.4 expected
• (GBP) Flash Manufacturing PMI 53.3 vs 53.2 expected
• (EUR) Flash Services PMI 46.2 vs 47.1 expected
• (EUR) Flash Manufacturing PMI 54.4 vs 53 expected
• (EUR) German Flash Services PMI 48.9 vs 49.6 expected
• (EUR) German Flash Manufacturing PMI 58 vs 55 expected

Markets Update:

Asian shares got the week off to a hesitant start on Monday as surging coronavirus cases in Europe and the United states undermined the global outlook, while China's leaders meet to ponder the future of the economic giant. The U.S. has seen its highest ever number of new COVID-19 cases in the past two days, while France also set unwanted case records and Spain announced a state of emergency.

Shares in Australia closed lower, with the S&P/ASX 200 down 0.2%. In Japan, the Nikkei 225 dipped fractionally while the Topix index shed 0.4%. Mainland Chinese stocks were mixed on the day, with the Shanghai composite down 0.8% while the Shenzhen component added 0.5%. The Hong Kong market was
closed on Monday for a holiday.

Oil prices fell further in anticipation of a surge in Libyan crude supply and demand concerns caused by surging coronavirus cases in the United States and Europe. The dollar index was a fraction firmer at 92.904, after shedding almost 1% last week.

Upcoming Events:

Monday, October 26, 2020

Key risk events today:

Limited.

(Previous analysis as well as outside sources – italics).

EUR/USD:

Weekly gain/loss: +1.23%

Weekly close: 1.1857