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

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

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).

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