Article Hero

EUR/USD and Gold May Rally Further, Key Levels to Watch

1602573922.jpg
Miguel A. Rodriguez
Miguel A. Rodriguez
05 November 2022
Johnson & Johnson pauses Covid-19 vaccine’s trails, Joe Biden leads the US elections polls, what moves markets today?

The Chinese trade balance of $37B for September came in lower than expected of $58B and even was lower than the prior read of 58.9B. However, the released data did not have an observable effect on the Chinese Yuan against the US Dollar.

Equities

Global stock markets rallied further on Monday on hopes of a possible US stimulus deal.

American indices hit a near five-week high and closed in the green.

However, US futures and Asian stocks slipped on Tuesday on reports of Johnson & Johnson has put its COVID-19 vaccine’s trails on hold due to an unexplained illness in a participant. It is worth noting that, AstraZeneca had to pause its vaccine’s trials last month due to a similar situation. The company resumed trials later after having the green light from the UK health regulators.

The Democrat candidate Joe Biden holds until now a comfortable margin of lead on President Trump. Chinese equities would prefer a Biden’s win as the Democrat could lower tensions with Beijing.

  Stock Market

Change %

S&P 500

+1.7%

Dow Jones

+1.0%

NASDQ

+3.3%

Japan 225

+0.2%

DAX 30

+0.8%

FTSE 100

+0.2%

CAC 40

+0.7%

 

Currencies

A weaker risk-on mode in the market has slowed down the greenback selloff. The technical outlook of the US Dollar index remains neutral while above 91.78.

The EUR/USD remained trading above the 50-day average on Monday therefore, the price could rally further towards 1.1909. A close above this level could send the price even higher towards 1.2096.

Markets look optimistic about a possible EU/UK trade deal as the GBP/USD price does not reflect any hard-Brexit risk. This week will be very important for the negotiations as the European council meeting will take place on Thursday and Friday amid skepticism from the European side about the UK government’s intentions. The pair could rally towards 1.3175 while above 1.3048.

Commodities

The Brent oil settled below $42.50 as global supply increased due to ending the Norwegian strike, restoring the US production after Hurricane Delta, and reopening the Libyan largest oil field. The price could edge even lower towards $39.60, while US Crude may re-test $38,37.

The Gold lost on Monday 0.2% of its value, however, closed above $1,921 allowing bulls to rouse momentum. That said, a close below $1,921 could reverse the precious metal’s direction towards $1,861.

Looking Ahead

Eyes will be on the German and Eurozone Zew index numbers of October at 10:00 (GMT) and the US inflation numbers of September at 1:30 (GMT).

This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

Share this article

How did you find this article?

Awful
Ok
Great
Awesome

Read More

Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.