COVID-19 going wild in UK, RUS extend oil supply

Market Recap

Global equity market

(Source: https://markets.businessinside...)

US share market reconsolidated yesterday. SP 500 index rose 0.52% at 3453.49 while NASDA Q fluctuated 0.02% up at 11662.91. Dows Index closed 0.54% up at 28363.66.

European share market fluctuated. DAX index closed 0.12% down at 12543.06 while FTSE index closed 0.16% up at 5785.62.

China share market consolidated down. Shanghai index dropped 0.38%. SZSE component index decreased 0.53% and GEM index dropped 1%.

Crude oil forward contracts

Oil market turned warmer. WTI crude oil rebounded and hit day high at $41.047 per barrel. Price dropped slightly before close. It closed at $40.58 per barrel.

Brent oil forward contract climbed back 1.68% at $42.4 per barrel.

Precious metal forward contracts

Gold price had been moving around $1920 in Asia market time. It dropped to day low at $1894.77 in US market time and closed at $1903.7, down by 1.06%.

Currency pairs

Ÿ  USDX close up 92.62 (0.430%)

Ÿ  EUR/USD close down 1.18186 (-0.371%)

Ÿ  GBP/USD close down 1.30771 (-0.521%)

Ÿ  AUD/USD close down 0.71125 (-0.048%)

Ÿ  NZD/USD close up 0.66672 (0.222%)

Ÿ  USD/CAD close down 1.31329 (-0.037%)

Ÿ  USD/JPY close up 104.837 (0.278%)

Global Fundamentals

United States

Speaker of the United States House of Representatives Nancy Pelosi raised doubts Thursday about getting a coronavirus aid bill passed before the 3rd November elections, even if a bipartisan deal is reached in the coming days. Pelosi said she remained hopeful of reaching a deal with the Trump administration that could end a months long stalemate over a new relief package to combat the health and economic effects of the COVID-19 pandemic.[i]

US jobless claims fell by 55,000 to a seasonally adjusted 787,000 in the week ended 17th October. It is lowest levels since March.[ii]    

The Federal Reserve on Thursday announced that it has fined Goldman Sachs Group Inc. $154 million for its role in the scandal involving the Malaysian government investment fund。[iii]

UK

Moody's UK financial conditions partially recover after falling to a decade-low level announced. It stated out:

UK bank lending spreads over policy rates widened slightly in September but remain below historical average

Equity market indicators show negative signs; consumer and industrial expectations also negative

It also said: “Unprecedented policy support and progress in containing the virus over the summer improved the Equity Markets and Macro Fundamentals components which drove UK financial conditions higher. Nevertheless, the notable rise in virus cases in October could weigh on Equity Markets and Macro Fundamentals in the coming winter months.”[iv]

A further 21,242 coronavirus cases were reported in Britain on Thursday, down from a record 26,688 cases a day earlier, daily government statistics showed.There were a further 189 deaths within 28 days of a positive test, down slightly from 191 the day before.[v]

Oil

Russian President Vladimir Putin indicated he would be prepared to extend record supply cuts in the face of the COVID-19 pandemic.[vi]

Today’s major asset analysis

EUR/USD and GBP/USD

EUR and GBP price reconsolidated down after Wednesday’ s weak USD. Both of EUR and GBP tested resists listed in Yesterday report and stayed around $1.181 and $ 1.307 prospectively. Prices are supported by daily EMA. AS for KD indicator, D value is stay above 80 while K value fall from 80. EUR price support is around $1.18. If price breaks the support, further support is around $1.176. As for GBP, K value is above D value and both are around 80. Support is around $1.30 and resist is around $1.31.

[EUR/USD, four-hour chart] (Source: KVB PRIME)

[GBP/USD, four-hour chart] (Source: KVB PRIME)

AUD/USD

Yesterday AUD price tested $0.714 and did not touch $0.715 resist. There is not too much important fundamental information from US and Australia, and price is reconsolidating. As for KD indicator, K value is heading 80 while D stays low but follow K. Support is still at $0.715 and support is around $0.708.

[AUD/USD, four-hour chart] (Source: KVB PRIME)

Gold

Gold price jumped from high, dropping $20 within 2 hours. Judged from trading volume, significant amount of short positions were closed and amount of long positions entered after price drop. As for KD indicator, K is heading down and closing to 20 while D is still around 70. Price is consolidating within the range $1905-$1892.

[XAU/USD, four-hour chart] (Source: KVB PRIME)

USD Index

USDX rose after three days’ drop and stands over $93. As for KD, both of K and D value is climbing from 20. Price is breaking weekly EMA and further resist is around $93.21. If the price stood above $93, then resist will be around weekly EMA.

[USDX, four-hour chart] (Source: KVB PRIME)

[i] Roll Call (2020),

Timeline for coronavirus relief package vote slips despite progress in talks

https://www.rollcall.com/2020/...

[ii] The Wall Street Journal (2020),

U.S. Jobless Claims Fell to 787,000 Last Week

https://www.wsj.com/articles/w...

[iii]Marketwatch (2020),

Fed fines Goldman Sachs $154 million for its role in Malaysian bond offering scandal

https://www.marketwatch.com/st...

[iv] Moodys (2020),

Research Announcement: Moody's - UK financial conditions partially recover after falling to a decade-low level

https://www.moodys.com/researc...

[v] Reuters (2020),

UK records slight drop to 21,242 new COVID cases on Thursday

https://in.reuters.com/article...

[vi] Reuters (2020),

Oil steady as Russia holds out prospect of output cut extension

https://in.reuters.com/article...