Beijing Stimulus Hopes and Carry Trade Dictate Forex

Updated 10:27AM 11/02/2020

AUD and NOK are the top G10 FX gainers today, up 0.27% and 0.2% vs the dollar while JPY and USD are the top losers.


The dollar rose to a four-month peak as hedge funds load up on high-yielding greenback. Low volatility in the foreign exchange market has prompted investors to carry trade with the euro and the franc as the borrowing currencies and dollars as the investing currencies. Elsewhere, Emerging Asian forex caught a bid as a drop in new coronavirus cases plans of a stimulus by China improved risk appetite.


In the Asian equities space, Hang Seng closed 1.26% higher at 27583.88 and Kospi ended 1.0% at 2223.12. The European equities were trading firm with the FTSE up +0.78% at 7504.86, DAX up +0.6% at 13574.93, and CAC up +0.4% at 6039.95. In the rates market, global yields were trading firmer; the US 10-year yield was trading at 1.5851% and the Bund 10-year yield trading at -0.391%. In the energy space, the Brent (front month) is trading up (1.28%) for the day at $53.95.


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Economic Calendar


10-year Yields Daily Chart (6-month)


Daily FX Pivots


Brent Crude Daily Chart (1-month)


(Content and Data by Tradermade)


Forex Chart and Technical Analysis


EURUSD Chart (Two-week)


Strategy: Resistance at 1.0926 for 1.0876
Short-term view: EUR/USD resistance comes in at 1.0926, MACD crossover suggests a bearish bias and RSI is below 50. Hence we see a downside to 1.0876. Above 1.0926 to open 1.0943.


GBPUSD Chart (Two-week)


Strategy: Resistance at 1.2950 for 1.2875
Short-term view: GBP/USD resistance comes in at 1.295, MACD below zero and RSI is below 50. Hence we see a downside to 1.2875. Above 1.295 to open 1.2985.


USDJPY Chart (Two-week)


Strategy: Support at 109.74 for 110.24
Short-term view: USD/JPY support comes in at 109.74, MACD crossover suggests a bullish bias and RSI is above 50. Hence we see an upside to 110.06. Below 109.74 to open 109.6.


AUDUSD Chart (Two-week)


Strategy: Support at 0.6687 for 0.6749
Short-term view: AUD/USD support comes in at 0.6687, MACD crossover suggests a bullish bias and RSI is above 50. Hence we see an upside to 0.6749. Below 0.6687 to open 0.6666

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