Daily market analysis

November 9, 2021

Market Focus

Major three indexes closed at a record high on Monday, as investors bought materials, energy and technology stocks because of their apparent optimism about the economic outlook. Last night, the Dow Jones Industrial Average rose 0.29% and up 104.27 points, the S&P 500 inched up by 4.17 points, or 0.1%, and the Nasdaq Composite Index finished up 0.07% to close at 15,982.36.

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自動產生的描述

The S&P 500 rose for the eighth day in a row, tying the longest streak of gains since April 2019. After Congress passed a $1 trillion infrastructure bill on Friday, shares of construction-related companies saw the biggest gains. Mining company Freeport-McMoRan, construction materials stock Vulcan and steel company Nucor are significant risers in the S&P 500 index. In addition, construction equipment manufacturer Caterpillar rose 4% and heavy equipment maker Deere’s shares rose about 1.6%.On the other hand, after chip manufacturer AMD announced that it had acquired Meta as a chip customer and demonstrated new chip products, its stock price rose 10.1%. One aspect of the loss is Tesla, the company’s share price fell 4.84% after CEO Elon Musk said that he would sell 10% of the company’s shares based on the results of a poll he conducted on Twitter over the weekend. Last but not least, some companies will announce their financial results in the near future, healthcare services and products company Cardinal Health will announce financial results on Tuesday, and entertainment giant Walt Disney will announce on Wednesday.

 

Main Pairs Movement:

Due to the collapse of the real yield in the United States, the U.S. dollar fell, which gave the currency a good rebound against the U.S. dollar. In particular, the price of gold received huge support, soaring to a new one-month high of $1,826.43 per ounce, and closing at a nearby level.

The EUR/USD is close to 1.1600, but still maintains the continuation pattern between 1.15685 and 1.16153, while the GBP/USD continued to rebound to the 1.3550 price area after a strong rebound after hitting the support level of 1.34301 last Friday. Commodity-related currencies rose slightly, with AUD/USD trading near 0.7420 and USD/CAD trading at the 1.2440 price range. Although the tone of Wall Street is better, the USD/JPY is still facing selling pressure, falling to the 113.20 area.

On the currencies end, Ether soared by more than 4% in 24 hours on Monday, setting a record high of over $4,700. At the same time, Bitcoin rose 7% to $66,250 and recovered to a record high above $66,900 set at the end of October.

  

Technical Analysis:

GBPUSD (4- Hour Chart)

The pair GBP/USD advanced on Monday, trading around daily tops at the time of writing. The pair was flirting with 1.439 level in early Asian session and started to see fresh selling after European session began. GBP/USD is currently pushed higher towards 1.358 area amid weaker US dollar across the board, as the risk-on market sentiment acted as a headwind for the safe-haven dollars. The DXY index loses 0.12% for the day and underpinned the GBP/USD pair, but the higher US bond yields should cap the upside for the pair. Meanwhile in UK, the dovish BoE and Brexit concerns might also cap gains for the major.

For technical aspect, RSI indicator 52 figures as of writing, suggesting tepid bull movement ahead. As for the MACD indicator, the positive histogram also indicates a possible upward trend for the pair. If we take a look at the Bollinger Bands, the price crossed above the moving average after touching the lower band, therefore the upper band becomes the profit target. In conclusion, we think market will be bullish as the pair is now heading to test the 1.3698 resistance. Later in the session, BoE Governor Andrew Bailey will speak, and his comments may provide some trading opportunities to the GBP/USD pair.

Resistance: 1.3698, 1.3751, 1.3835

Support: 1.3424

 

USDJPY (4- Hour Chart)

The pair USD/JPY declined on the first day of a new trading week, touching the lowest level since October 12. The pair was trading higher in early Asian session, but the stronger Japanses Yen started to drag the pair down toward 113.3 area. USD/JPY was last seen trading at 113.24, posting a 0.12% loss for the day. The renewed selling witnessed in US dollar continue to weigh on the pair, as the greenback weakened in response to last Friday’s US labour market report. On top of that, the Japanese Yen was the top performer today despite the risk appetite.

For technical aspect, RSI indicator 35 figures as of writing, suggesting bear movement ahead. As for the MACD indicator, The MACD is now sitting below the signal line, which indicates a possible downward trend for the pair. Looking at the Bollinger Bands, the price continue to fall toward the lower band, which also indicate a bear market. In conclusion, we think market will be bearish as long as the 113.67 resistance line holds. Investors now await the PPI data released on Tuesday, which could trigger market moves following last week’s FOMC meeting.

Resistance: 113.67, 114.31, 114.70

Support: 111.28, 110.82

 

USDCAD (4- Hour Chart)

The pair USD/CAD edged lower on Monday, flirting with 1.245 area most of the day and now staying in negative territory. Higher crude oil prices underpinned the Loonie as the passage of the $550B US infrastructure investment package is likely to improve the US growth and oil demand outlook. Global jet fuel demand is also set to rebound back to pre-pandemic levels as countries reduce travel restrictions. Moreover, the bearish momentum witnessed in US dollar keep weighing on USD/CAD pair.

For technical aspect, RSI indicator 58 figures as of writing, suggesting bull movement ahead. But the MACD indicator showed a death cross on the histogram, indicating a possible upward trend for the pair. As for the Bollinger Bands, the price is falling from the upper band and chances are high that it will touch the moving average. In conclusion, we think market is consolidating now around 1.24 area. But if the bearish momentum persist and drag the pair under 1.2378 support, some additional near-term losses can be expected.

Resistance: 1.2499, 1.2648, 1.2739

Support: 1.2378, 1.2288

  

Economic Data

Currency

Data

Time (GMT + 8)

Forecast

EUR

German ZEW Economic Sentiment (Nov)

18:00

20.0

EUR

ECB President Lagarde Speaks

21:00

4.7%

USD

PPI (MoM) (Oct)

21:30

0.6%

USD

Fed Chair Powell Speaks

22:00