Global equities fall, dollar rises after chaotic Biden-Trump debate

The US dollar rose while global equities dropped as investors reflected on the first debate between Donald Trump and Joe Biden. The dollar index rose by 0.10% while futures tied to the Dow Jones and Nasdaq 100 dropped by more than 0.90%. In Europe, the DAX index and Stoxx 50 declined by 0.30%. Similarly, in Asia, the main indices closed in the red. In the debate, the two sides attacked each other on policies. For example, Donald Trump touted his tough stance on China and the renegotiated USMCA deal. On the other hand, Biden talked about the state of the economy during the Obama administration.

The British pound declined slightly against the dollar as investors continued to wait for the outcome of the ongoing Brexit negotiations in Brussels. While the two sides have significant differences, including the Internal Market Bill, analysts are optimistic that they will reach an agreement before the October 15 deadline. The pound also declined even after the better-than-expected GDP and house price index (HPI) data. Numbers from the Office of National Statistics (ONS) showed that the economy contracted by 19.8% from the second quarter and by 21.5% on a year-on-year basis. The HPI increased by 5% in September.

The euro declined against the dollar mostly because of the overall dollar strength. Data from Europe showed that the unemployment rate dropped to 6.3% in September from the previous month’s 6.4%. In total, the country has more than 2.9 million people of working age who are out of the labour market. Other data from France showed that preliminary CPI dropped by 0.5% in September while the harmonised inflation fell to -0.6%. Separately, data from the United States showed that the economy contracted by 31.4% in the second quarter. Another data from ADP showed that private employers added more than 749k jobs in September.

EUR/USD

The EUR/USD pair declined to an intraday low of 1.1695, which is along the 25-day exponential moving average. The four-hour chart shows that the pair managed to hit the important support of 1.1750, which was the neckline of the head and shoulders pattern. It is also between the middle and upper line of the Bollinger bands. Therefore, even with the current decline, the pair is likely to continue rising since it seems to be forming the handle part of the cup and handle pattern.

XAU/USD

Gold price dropped today as traders reacted to the Trump and Biden debate. The pair reached an intraday low of 1881. On the four-hour chart, the price is between the 50-day and 25-day exponential moving average. It is also slightly below the triangle pattern shown in green and the double bottom pattern shown in yellow. Therefore, the price is likely to continue falling as bears attempt to test the double bottom at 1847. 

XBR/USD

The XBR/USD pair dropped sharply yesterday as traders reacted to high inventory data from the United States. The four-hour chart shows that the pair managed to move below the previous ascending channel. Also, the pair is forming a new bearish flag pattern. This means that the price will likely continue falling as bears attempt to push it below 40.0