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Daily Outlook – 19 Oct. 2020
By: Andria Pichidi
- Pfizer stated could seek authorization for a vaccine it is working on in November.
- Dow and S&P500 spike as NASDAQ dipped in red – 86% od S&P Companies beat expectations
- Discussion for additional support independent of the outcome of the election helped to lift sentiment.
- Pelosi has set a 48-hour deadline to approve a stimulus deal before the election
- The US strong retail sales, positive news on a vaccine and a thumbs up for Boeing’s beleaguered MAX 737 from European regulators also helped buoy the market.
- Big tech was hit by worries over potential legislation to end the special status granted under Section 230 which gives Twitter, Facebook, and the like, immunity from liable suits
- Treasury yields cheapened marginally on the rally in risk with longer-dated maturities underperforming. The Treasury announced a record -$3.1 tln fiscal 2020 deficit.
- China Q3 GDP came in weaker but strong import growth and retail sales suggested domestic demand is strengthening.
- UK could rewrite a controversial part of the Internal Market Bill in EU deal – FTSE 100 was held back somewhat by a stronger Pound.
- November 23-26 is seen as the next key deadline if a deal is to get through the legislative process before the end of the transition period.
EUR – dipped to 1.1700 lows again
GBP – tumbles within 1.2860-1.2950
JPY – is little changed at 105.43 above PP but still shy of the 105.50 barriers.
CAD – headed to session lows of 1.3166 – CAD strength resumes on USD weakening and Oil strength,
NZD got support from the outcome of the election, which saw Ardern’s government returning with a larger majority.
Oil – supported slightly ahead of an OPEC+ meeting and on higher Baker Hughes oil rig
Gold – above the $1,900 level
TODAY: Lot officials are speaking today including Chairman Powell and President Lagarde. The earnings calendar includes IBM. Also, there is an OPEC+ JMMC meeting online.
The biggest gainer – GBPCHF + 0.38% – rebounded on Asia open and currently retesting S1 at 1.1850 reversing any losses on Friday. Mostly neutral in the daily chart as MAs flattened, MACD has zeroed and RSI is at 50. Intraday however suggests an increasing positive bias with MACD turning positive and fasts MAs pointing further higher. However, R1 which coincides with double top and 2-day resistance could be seen as a strong immediate Resistance. 1H ATR at 0.0.0013 and Daily ATR at 0.0091
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