Long-Awaited Deals
The lower-than-expected US Jobs data released on Friday amounted to pressures on Congress to approve the long-awaited stimulus deal.
Republicans and Democrats are still working on an over $908 Billion package, both sides agree on the importance of the stimulus package while diverging on liability protections for companies, and the $1,200 individual stimulus checks, and the $160 billion aid assigned to states.
On the other side of the Atlantic, the UK PM is traveling to Brussels for urgent talks with the European Commissioner to try to end the deadlock over the EU-UK free trade deal. The negotiations have reached a decisive stage, and they may collapse unless negotiators agree.
All-time High
Global stock markets retreated this week on fears from the increasing numbers of the coronavirus. The Dow Jones pulled back from its highest level ever at 30226, while the S&P500 neared the 3700 level.
The US top officials warned that the Christmas season could fuel the virus spread further and mentioned the possibility of shutting down indoor restaurants next week. It is worth noting that the US Food and Administration will meet on Thursday to discuss Pfizer’s coronavirus vaccine and if it was approved the vaccine’s distribution will start within 24 hours.
|
Change % | |
|
-0.3% | |
|
-0.6% | |
|
+0.4% | |
|
-1.9% | |
|
-0.2% | |
|
-0.4% | |
|
-0.9% |
Table source: Capex Webtrader
EUR/USD and Main FX Markets
The EUR/USD traders wait for the ECB meeting taking place on Thursday to know more details about the central bank monitory policy with its growth and inflation projections for the coming months.
On the other hand, the EU showed determination to launch the European stimulus program despite Hungary and Poland’s veto and signaled that the two nations have until Tuesday to lift their veto otherwise, the program would exclude them.
Technically, the Relative Strength Index (RSI) fell from 75 to 70 highlighting a weaker bullish momentum therefore, the price trade lower towards the low end of the current trading zone 1.1909 – 1.2148.
The GBP/USD retreated on Monday to a near three-week low at 1.3223 on news of the EU-UK negotiation’s impasse. A close below the August 6 High at 1.3185 could change the market outlook from positive to neutral and could send the price to the lower trading zone 1.2915- 1.3185.
The US dollar index broke below the September 1 low at 91.71 and pointed lower eyeing a test of 89.45 (30 January-2018 high).
Gold and Oil
The coronavirus surging cases and the delay in the US $908 stimulus package led the oil price to retreat on Tuesday for the second day in a row this week. It is worth noting that oil supply may increase for the incorporation of the Iranian oil as the US president-elect top advisors back the rejoining Iran’s nuclear deal.
The (RSI) on the Brent Crude daily chart fell from 68 to 62 signaling a weaker bullish sentiment thus, the price could fall for a test of the low end of the current trading zone $46.47 – $50.50.
The Gold extended gains as the US Dollar retreats and climbed to a higher trading zone of $1,861 - $1,921. On Monday, the (RSI) crossed above 50 indicating that bulls may rally the price higher hence, a close above the high end of the trading zone could trigger a rally towards the August 3 low at $1,960.
Looking Ahead
On the economic calendar, investors await the final read of the Eurozone GDP (Q3) with the ZEW economic index of the Eurozone and Germany at 11:00 AM (GMT).
Sources: Bloomberg, Reuters
