Markets have had no end of good news over the last few sessions – from another vaccine with better distribution potential and better PMI data to Janet Yellen being mooted as the next US Treasury Secretary and all the implications her dovish appointment may bring. Read: BIG ON STIMULUS (and a safe pair of hands which Republicans may get behind too!)

Global stocks are also rallying after President Trump said his administration would co-operate with Joe Biden’s transition team and ‘do what needs to be done with regard to initial protocols’. This removes a lingering source of uncertainty around a smooth transition of power and comes some twenty days after the election.

The bid for risk assets is strong with many approaching or making new multi-month highs. Oil has touched levels not seen since March, Gold has broken down and is off close to 2% today, while Bitcoin is approaching its all-time high set in December 2017. With US bond yields pushing northwards, King Dollar has again pushed against strong support in the low 92 area. The data calendar picks up tomorrow ahead of Thanksgiving with GDP, Durable Goods and weekly jobless claims figures.

USD to break or hold?

Will Wednesday’s data dump finally push the Dollar through the broader range which has been in place since August? Many of the 2021 Previews already released by the great and the good on Wall street are proclaiming falls of up to 20% for the greenback next year.

If the reflation trade continues full steam ahead, then AUD/USD is the main major to play on this theme and is very much likely to push higher having traded in a narrow range for two weeks. That move looked to be taking place earlier today with a break of the November high at 0.7340, but prices have pulled back. Any close above this level should see a swift move to the September highs at 0.7413.

Oil Bulls Jumping with Vaccine Joy

Oil is another risk asset firmly in the driver’s seat and is hitting multi-month highs. Positive vaccine news has marched the commodity up for five consecutive days, surging nearly 20% since the Pfizer news, though prices are still well below the near $70 they traded before the pandemic. A pivotal OPEC+ meeting takes place next week with expectations high that the group will extend the duration of their production cuts.

With the Summer highs now acting as support around $46.50, momentum is strongly bullish with the next level being the psychological $50 barrier. This also coincides with a major Fibonacci level from the January high to the low in April.

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