USD hesitates after stimulus stalls

USD lost ground against its counterparts on Friday yet during today’s Asian session seems to have found some support. It seems that increased hopes for a fiscal stimulus to be agreed before the US presidential elections, which tended to push the USD lower, have now been replaced by doubts. On Friday President Trump offered an $1.8 trillion coronavirus relief package which was closer to the Democrat’s proposal of $2.2 trillion, yet the proposal met criticism from both Republicans and Democrats. We expect fundamentals to continue to move the greenback in the absence of any financial releases and should market hopes for a fiscal stimulus increase again, we could see the USD weakening and vice versa.
AUD/USD continued to rise on Friday, breaking the 0.7200 (S1) resistance line now turned to support as expected on Friday’s report, yet during todays’ Asian session seemed to be stalling. Despite the stabilisation for our bullish bias to change in favour of a sideways movement, we could require the pair’s price action to break the upward trendline incepted since the 7th of October. If the bulls actually maintain control over the pair’s direction, we could see it aiming if not breaking the 0.7300 (R1) resistance line. If the bears take over, the pair could break below the 0.7200 (S1) line once again and start aiming for the 0.7100 (S2) level.

CAD’s winning streak halted?

The CAD has been strengthening against the USD as the risk on market sentiment tended to support the Loonie over the past few days. The Loonie drew additional support from very favourable figures in the country’s employment data for September as the unemployment rate dropped more than expected, while at the same time the employment change figure rose instead of falling as expected. BoC Governor Macklem warned on Thursday that coming months are ‘crucial’ to see how Canadian homes and businesses have weathered the crisis. We expect the CAD to be fundamentally driven as very few financial releases are expected and CAD traders could also be watching the oil market.
USD/CAD continued to drop breaking the 1.3150 (R1) support line, now turned to resistance. The pair seems to be under the influence of the downward trendline incepted since the 7th of October, supporting our bearish outlook yet seems to be currently testing it once again. If the pair remains under the selling interest of the market, we could see it aiming for the 1.3035 (S1) support line. On the contrary should buyers be in charge, USD/CAD could break the downward trendline, the 1.3150 (R1) line and aim for the 1.3240 (R2) level.

Other economic highlights today and early tomorrow

In the European session today, we get Turkey’s current account balance for August and the Czech Republic’s CPI rate for September. UK’s GDP rates for August as well as the manufacturing output growth rate for the same month. During Tuesday’s Asian session, please note that release of New Zealand’s electronic card sales for September while the highlight of the session is expected to be China’s trade data for also for September. As for speakers ECB’s Schnabel, BoJ Governor Haruhiko Kuroda and ECB’s De Guindos speak.

در مورد بقیه هفته

On Tuesday, we get Germany’s final HICP rate for September, UK’s employment measures for August, Germany’s ZEW indicators for October and the US inflation rates for September. On Wednesday, we get Eurozone’s industrial production for August and the US PPI rate for September. On Thursday, we get Australia’s employment data for September, China’s inflation rates for September, France’s final HICP rate for September and from the US the NY Fed Manufacturing for October, the Philly Fed Business index for October and the weekly initial jobless claims figure. On Friday, we get Eurozone’s final HICP rates for September and from the US the retail sales and industrial production growth rates for September as well as the University of Michigan consumer sentiment for October.

AUD/USD 4 Hour Chart

Support: 0.7200 (S1), 0.7100 (S2), 0.7025 (S3)

Resistance: 0.7300 (R1), 0.7410 (R2), 0.7485 (R3)

USD/CAD 4 Hour Chart

Support: 1.3035 (S1), 1.2955 (S2), 1.2885 (S3)

Resistance: 1.3150 (R1), 1.3240 (R2), 1.3320 (R3)

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