US political uncertainty continues to drive financial markets

Late stimulus

Financial markets came under pressure this week, following the unexpected news that Speaker Pelosi and Treasury Secretary Mnuchin failed to agree on terms for a second US coronavirus stimulus package. US President Trump announced that the Republican party was pulling away from negotiations until after the upcoming US election result. The market reaction to the bearish news saw a major sell-off in US equity markets, precious metals, cryptocurrencies, and risk-sensitive currencies. The S&P 500 index later recovered its losses and traded to a five-week high, as traders and investor still hoped that Republicans and Democrats could reach a deal before the elections.

• The S&P 500 is only bullish while trading above the 3,380 level, key resistance is found at the 3,450 and 3,500 levels.
• The S&P 500 is only bearish while trading below the 3,380 level, key support is located at the 3,360 and 3,330 levels.

Bitcoin ranges

Bitcoin traded between the $10,500 to $10,900 price range this week, despite more bearish fundamental news and record negative sentiment towards the pioneer cryptocurrency. The BTCUSD pair held firm despite the bearish news surrounding the delay of the new US coronavirus stimulus package, and FCA banning the United Kingdom from cryptocurrency derivative trading. Data also showed that traders sentiment towards Bitcoin on Twitter fell to a three-year trading low. Investors decided to focus on other positive developments, such as bullish on-chain data, new Bitcoin users hitting a record high, and the cryptocurrency setting a record for the most amount of days spent above the $10,000 level.

• The BTCUSD pair is only bearish while trading below the $10,550 level, key support is found at the $10,200 and $9,800 levels.
• The BTCUSD pair is only bullish while trading above the $10,550 level, buyers may test towards the $11,100 and $11,700 resistance levels.

Brexit concerns

The British pound incurred wild fluctuations against the US dollar currency this week as Brexit news continued to be the main driver for short-term volatility. The GBPUSD pair traded between the 1.3000 to 1.2800 price range as news continued to be released from negotiations between United Kingdom and EU negotiators. The GBPUSD pair started to firm over early-week reports that British PM Boris Johnson had agreed to extend Brexit talks by four-weeks. Sterling then took a major hit on the bearish news that the United Kingdom was willing to pull away from Brexit negotiations as soon as next week if a clear Brexit deal is not put in place shortly.

• The GBPUSD  pair is only bearish while trading below the 1.2900 level, key support is found at the 1.2800 and 1.2660 levels.
• If the GBPUSD pair trades above the 1.2900 level, buyers may test towards the 1.3000 and 1.3140 resistance levels.

Euro mixed

The euro had a week of mixed fortunes, as the single currency gained and then lost ground against the US dollar, British pound, and Japanese yen. The EURUSD pair moved higher on optimism over a new US stimulus package, and then abruptly moved lower on the news that the deal was being delayed. Market sentiment started to weaken as a rise in coronavirus infections in the United States and Europe caused traders to move back into the safe-haven currencies. The EURUSD pair also remained technically weak, and repeatedly fail to advance past the 1.1800 resistance level.

• The EURUSD pair is only bearish while trading below the 1.1790 level, key support is found at the 1.1690 and 1.1550 levels.
• The EURUSD pair is only bullish while trading above the 1.1790 level, buyers may test towards the 1.1840 and 1.1900 resistance levels.