Commodity prices rise ahead of $1.9 trillion stimulus debate
European stocks and American futures dropped ahead of key earnings and debate on US stimulus. The FTSE 100 index declined by 0.70% ahead of earnings by companies like HSBC, Standard Chartered, and BAE Systems. In Germany, the DAX index declined by more than 0.50% as the number of coronavirus cases continued to rise in Germany. Meanwhile, futures tied to the Dow Jones and S&P 500 dropped by more than 0.50%. The top pre-market mover in the Dow is Boeing, which suffered another calamity after a 777 jet owned by United experienced a major engine failure.
The euro erased some of its earlier losses as traders reacted to the relatively strong sentiment data from Germany. According to the ifo Institute, the Ifo business climate increased from 90.3 in February to 92.4 in February. Similarly, the current assessment increased from 89.2 to 90.6 while business expectations increased from 91.5 to 94.2. The three numbers were better than estimates. In its report, the institute said that companies are generally optimistic about the German economy because of the ongoing vaccination drive.
Commodity prices rose today as investors waited for the much-awaited debate of Joe Biden’s $1.9 trillion stimulus plan. Democrats are rushing the proposal before the benefits announced in the previous stimulus package are set to expire. A large stimulus package, coupled with the rising hopes of another infrastructure project, will be positive for commodities like copper and crude oil. Today, copper, oil, and silver prices rose by more than 0.50%. The price of oil rose partly because of the ongoing freeze in Texas.
The EUR/USD pair dropped to an intraday low of 1.2090 and then pared back some of those gains. It is trading at 1.2130, which is slightly above the 23.6% Fibonacci retracement level on the hourly chart. The price has also moved above the 26-day exponential moving average. It is also slightly below last Friday’s high of 1.2145 while the Relative Strength Index (RSI) has also rebounded. The pair may continue rising as bulls target the highest point on Friday.
The XBR/USD pair rose to an intraday high of 63.20 and then erased some of those gains. It is trading at 62.45. On the hourly chart, this price is slightly below the right shoulder of the head and shoulders pattern. It is also along the 23.6% Fibonacci retracement level. It has also at the same level as the envelopes indicator. Therefore, because of the bearish head and shoulders pattern, the pair may breakout below the support at 61.42.
The GBP/USD price bounced back after falling to an intraday low of 1.3980. On the four-hour chart, the price is slightly below the ascending channel shown in white. It is also slightly above the 25-day exponential moving average and the Ichimoku cloud. The pair may continue rising as bulls target last week’s high at 1.4050.