Global stocks fall as US states start new lockdowns
European equities retreated today after the rising number of Covid cases in the United States pushed some states to implement strict lockdowns. For example, in California, the biggest state in the country, the governor said that many businesses like hotels and bars will need to close down. Other states like New Jersey and Michigan have announced similar lockdowns. This happened as the average number of new cases in the country has risen to more than 100,000, pushing the total number of infections to more than 11 million. In Europe, the DAX index, CAC 40, and FTSE 100 dropped by 0.46%, 0.40%, and 1.10%, respectively.
The Australian dollar held steady as traders reacted to the minutes by the Reserve Bank of Australia. The minutes published showed that the bank was ruling out implementing negative interest rates in the near term. Instead, the officials will prioritise asset purchases and other measures to cushion the economy from the impacts of the pandemic. In this month’s meeting, the bank lowered interest rates by 0.15% and pledged to do more. The Aussie is also steady because of the overall weaker dollar and the fact that Australia is a member of the biggest trade deal that was signed during the weekend.
The US dollar continued to decline today as hopes of a Covid vaccine pushed more traders away from safe assets. The dollar index declined to an intraday low of $92.285, which is the lowest it has been since Monday last week. The currency also reacted to the weak retail sales numbers from the United States. According to the bureau of statistics, the overall retail sales rose by 0.3% in October after rising by 1.6% in September. Core retail sales rose by 0.2% in October. In the same month, the export price index declined by an annualised rate of 1.6% while the import price index fell by 1.0%.
The EUR/USD pair rose to an intraday high of 1.1882, which was the highest it has been since October 9. As the price rose, it moved above the important resistance level at 1.1867. On the four-hour chart, the price has moved above the 15-day and 25-day exponential moving averages. It is also above the ascending trendline and the 61.8% Fibonacci retracement level. Therefore, the pair will likely continue rising as bulls eye the next resistance at 1.1920. This trend will be invalidated if the price moves below the now support at 1.1867.
The GBP/USD pair rose to an intraday high of 1.3265 as UK and EU negotiators met in Brussels to talk about Brexit. On the hourly chart, the price is along the upper line of the Bollinger Bands and is at the highest level since November 11. The price is also slightly below the important resistance level at 1.3313. The awesome oscillator and the Relative Vigour Index (RVI) are above the neutral levels. Therefore, the pair will likely continue rising as bulls target the next stop at 1.3313.
The AUD/USD pair rose to an intraday high of 0.7340, which is the highest it has been since November 11. On the four-hour chart, the price is above the 25-day moving averages. It is also above the 61.8% Fibonacci retracement level. Also, the signal and the histogram of the MACD is above the neutral level. Therefore, the price may continue rising if it moves above today’s high of 0.7340.