- November 3, 2020
- Posted by: Analysis Team
- Category: FOREX, Technical Analysis
US stocks are rising in the futures market ahead of the US election. The Dow Jones and S&P 500 futures are up by almost 1%. The market is optimistic that, regardless of who wins the election, they will get clarity about US policies. They also hope that they will get a stimulus deal in the near term. Still, investors are concerned that the final vote will be contested, meaning that the eventual winner will not be known for some time, leading to volatility. That is partly because of the number of Americans who have voted by mail.
The Australian dollar rose slightly after the Australian central bank delivered its interest rate decision. The bank decided to slash interest rates by 0.15% to 0.10%. That was the first time it has cut since March this year. In all, it has cut rates four times since last year. In a statement, the bank said that the rate was necessary to support the country as it goes through its worst economic crisis in decades. However, Australia is in a better position than most countries. It has managed to contain the disease and China, its biggest customer is doing well.
The economic calendar will not have major information today. Later today, we will receive the US factory orders and the ISM New York business conditions data. From Europe, we will receive the inflation data from Switzerland. Analysts expect the data will show that the headline consumer price index (CPI) improved from -0.8% to -0.6%. We will also receive the inflation data from Turkey. Meanwhile, corporate earnings will continue, with the key companies to watch being Humana, Bayer, BNP Paribas, Ferrari, Eaton, Emerson, and EssilorLuxottica.
The EUR/USD pair is trading at 1.1650, which is slightly above yesterday’s low of 1.1620. On the hourly chart, the pair has formed a double bottom pattern after weeks of falling. This is usually a bullish sign. It has also moved above the 14-day double moving average and the triple exponential moving average (TRIX). The awesome oscillator has also moved above the neutral line. Therefore, there is a possibility that the pair will continue rising as bulls aim for the next psychological level of 1.1700.
The XBR/USD pair rose even as worries of lockdowns loom. It is trading at 38.95, which is the highest it has been since Thursday last week. On the hourly chart, the price is a few pips below the upper side of the Bollinger bands. It is also along the 38.2% Fibonacci retracement level while the relative strength index (RSI) has moved close to the overbought level. Therefore, while the pair is likely to continue rising, there is also a possibility it will drop and possibly test the 23.6% Fibonacci retracement level at 38.05.
The AUD/USD pair is trading at 0.7050. On the hourly chart, it is a few pips above the 25-day and 15-day exponential moving averages and above the double bottom at 0.700. The moving average of the oscillator is falling to the neutral level while the signal and main lines of the MACD are making a bearish crossover. It is likely that the pair will remain in this range today.