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By: Andria Pichidi
FX vol just reached its lowest in 28 years
Mixed to pessimistic sentiment – Decline in the amount of new Covid-19 VS 2 deaths in Japan and a spike of deaths in South Korea.
Australia: AUD and NZD underperformed, Aust. bonds outperformed amid the higher than an expected jobless number – Signals potential additional easing.
US: Robust PPI, strong housing starts, help on another rally in equities to new record highs
Today, Asian stock markets are still mostly higher, while US futures are fractionally lower. (Economists are still expecting a V-shape recovery for the global economy, with the help of stimulus measures, which is keeping stock markets underpinned.)
FOMC Minutes were uneventful – The Fed is in no hurry to tighten policy, and that it will maintain a lower for longer hike rate stance.
MAIN EVENT: Huge YEN move – (reminder: The biggest Risk on/off indicator)
USDJPY – lifted to 111.58 yesterday, Fresh boost in EU session today spike the pair at 111.83 – 112.00 Resistance level and 112.39 2019 Resistance level. – USDJPY deviates from US yields invert. correlation to break higher fills the May 2019 gap
Gold – retested 1613 Resistance and pullback since then – Below BB, S1: 1600-1603.30, 1596
Oil Rallied remains on bid Ignores 53 Resistance – currently at 53.75 (above 23.6% Fib for 2020) – PP: 53.30, R1:54.30 and S1: 52.64
GBP – holds losses against EUR and USD, at 0.8360 and 1.2905 respectively
EUR – reversed yesterday’s gains – Currently at 1.0791 below PP: 1.0800, S1 – 1.0771 and R1: 1.0813
AUD – BREAKS Multiyear low since 2008-2009 ( 0.6660) – S3: Support at 0.6616, and 0.6600 ATR at 43
CAD – Finds Support at 200-DMA (1.3200) – Currently at 1.3240, R: 1.3270
BTC – consolidating around 20-DMA – PP 9998.50, R1: 10140, S: 9099
TODAY – UK Retail Sales, ECB Meeting Accounts, US initial jobless claims, and Japanese national CPI.
Biggest (FX) move – strong – USDJPY (+1.6%) – some follow-through selling in the Asian session from yesterday’s big rally. MA’s remain aligned higher, RSI (68) suggests further area be covered to the upside, MACD post bullish cross but Stochastics (near term) overbought. Daily Pivot Point – 110.90, R1 112.00, 112.80 and S1 110.60, 110.26. Daily ATR 52.
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