US election uncertainty sparks major market moves
Financial markets experienced a strong bout of volatility this week, as the United States election result proved much closer than early polling had suggested. The US dollar index started to strengthen as the election race tightened but later gave background as the Biden Campaign started to gain ground. Global equity markets also incurred significant volatility with the S&P 500 index moving in 300 point trading range. US equity markets eventually rally higher as stocks cheered a potential Biden victory. Gold and silver also started to rally as market participants started to price in the increased possibility of large US stimulus packages and fiscal spending from the Democrat Party.
- The S&P 500 is only bullish while trading above the 3,395 level, key resistance is found at the 3,540 and 3,600 levels.
- The S&P 500 is only bearish while trading below the 3,395 level, key support is located at the 3,000 and 2,700 levels.
Bitcoin hit a yet another new 2020 trading high this week, as the breakout rally in the pioneer cryptocurrency continued towards the psychological $15,000 level. Bitcoin vastly outperforms other altcoins and asset classes, as the fundamentals surrounding the cryptocurrency remained extremely bullish. On-chain data showed a record number of new Bitcoin addresses being added this week, while transactions on the cryptocurrencies blockchain continued to surge. Bullish comments from the CEO of PayPal towards cryptos and record open interest in the futures market continued to propel Bitcoin higher.
- The BTCUSD pair is only bearish while trading below the $13,300 level, key support is found at the $12,500 and $11,800 levels.
- The BTCUSD pair is only bullish while trading above the $13,300 level, buyers may test towards the $15,100 and $16,000 resistance levels.
The Reserve Bank of Australia cut interest rate to 0.10 percent this week, as the central bank remained concerned over the strengthening Australian dollar and weak domestic economy. The Australian dollar initially moved lower against the US dollar after the rate decision, however, the AUDUSD pair soon recovered as the greenback started to lose ground over the uncertain US election result. The Australia dollar also appeared to benefit from a relief rally in commodities, as some analysts had previously been predicting that an uncertain US election result could cause stocks and oil price to turn sharply lower.
- The AUDUSD pair is only bearish while trading below the 0.7100 level, key support is found at the 0.7000 and 0.6900 levels.
- The AUDUSD pair is only bullish while trading above the 0.7100 level, buyers may test towards the 0.7300 and 0.7400 resistance levels.
The British pound received a boost this week as the Bank of England injected £150 billion into the United Kingdom economy. The central bank warned that A resurgence of the COVID-19 virus in the United Kingdom would lead to more weak economic growth. Sterling also benefitted as the Bank of England failed to cut the UK interest rates this week as some traders and investors had previously feared. The Bank of England’s latest economic projections for 2020 revealed that wages in the United Kingdom are set to shrink by over ten percent.
- 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 1.3160 and 1.3300 resistance levels.