It has been an eventful week defined by COVID-19, vaccine optimism and volatility not only in the commodity arena but cryptocurrency space!
Straight across the Atlantic, roughly a quarter of all U.S. coronavirus cases since the start of the pandemic was reported in November. However, equity bulls were clearly unconcerned by this shocking revelation with stock markets hovering near record highs on Monday.
Buying sentiment towards the British Pound brightened during the early parts of the week amid signs that the UK and European Union were close to a trade deal……
The GBPUSD rallied as high as $1.3397 before sinking back towards the $1.3300 support level. Given how Boris Johnson and the EU have warned of large disagreements between them, fears are set to mount over the UK crashing out of the EU with no Brexit deal. Will this be enough to pull the GBPUSD back below1.3000? Time will tell.
On Tuesday we discussed how Black Friday would impact various US retailers. In regards to the stock of the week, Macy’s was in the spotlight after reporting a better-than-expected Q3 performance last week.
After being trapped within a wide range for many weeks, Gold finally broke below the stubborn $1850 support level on Tuesday.
Gold futures are poised to register the biggest weekly slide since late September, as the metals prices have been hammered by upbeat news on coronavirus vaccine and improving clarity over the political situation in the U.S.
Looking at the metal from a technical perspective, the metal has shed roughly 5% in value this month. A solid weekly close below $1800 may open the doors towards $1760.
Risk-on was the name of the game mid-week as investors digested all the good news. The mood across markets was so positive that global equities were on course for their best month on record with the Dow Jones Industrial Average conquering 30,000 for the first time.
We covered some key levels on the Dollar Index after prices broke below the psychological 92.00 level.
Interestingly, the global rally started to cool near the end of the week thanks to surging coronavirus cases in Europe and the United States. While investors continued pinning their hopes on a rapid rollout of vaccines, the logistical challenges remain rife and this was reflected in global risk sentiment.
In other news, Bitcoin plunged as much as 13% on Thursday after hitting an all-time record high of $19,510 on Wednesday. An increasing number of institutional investors have been accumulating and backing the asset this year, especially as an alternative inflation hedge to gold. With cryptocurrency extending losses towards the $16,000 support, could this be profit taking or the start of a bear trend?
Risk sentiment was shaky on Friday amid concerns over the efficacy of AstraZeneca’s Covid-19 vaccine. Given how markets have become highly sensitive to vaccine developments, the week ahead could wild if similar reports are published.
Speaking of the week ahead, all eyes will be on the crucial OPEC+ meeting which may influence Oil’s performance over the next few weeks. Talking technicals, WTI Crude is turning bullish on the daily charts. A solid breakout above $46.50 may open the doors towards $50.00.
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