Last Week’s Market Overview
Gold price has slumped to the lowest level since mid-July amid the optimism on rollout of different kinds of COVID-19 vaccines in the near future, and the surge on stock market and industrial materials.
The 1850.00 is a critical level which has withstood the challenge twice within a month, but the price finally broke the level and started to plummet on last Tuesday, straight falling to next significant support level at 1770.00 on the rest of week.
All in all, the hope on potential rapid economic recovery weighed on the gold price, and the emotion might continue in coming few days or even few weeks as more trial results on vaccines from other drug developers would release.
NZD continued to perform well last week and extended the uptrend begun in early November, refreshing a new high since June 2018.
The Finance PM Robertson said that the government had to review policies related to the housing market on last Tuesday. He also encouraged the central bank to cooperate for stabilizing the property prices. Therefore, the market reinforced the expectation that there would be no further rate cut from RBNZ and it then pushed the exchange rate of NZD higher.
As a commodity currency, New Zealand dollar will also be hugely benefited from vaccine progress and positive outlook of medium-term world economics. The investors therefore should pay attention to the updates on vaccine trial results and vaccination outcome.
Market Change Last Week
Market Focus This Week
US Official Employment Report
Federal Reserve chair Powell said he was worried about the ongoing pandemics would resist the recovery of economic activities, and he also called on Congress and the president for more economic stimulus. However, it is nearly impossible to introduce a stimulus package before Biden move into the White House.
Although the COVID-19 vaccine shot will start soon, it may take several months to a year for reaching the entire population. Therefore, it is crucial for the US to stabilize its infection rate and avoid another round of downturn in coming few months.
We have to eye on some important economic statistics, such as nonfarm payrolls which reflects the employment status. If the readings can keep positive in the near future, employment and economic activities would return to pre-pandemic level faster in post-vaccine period.
Light Crude Oil (H4)
The crude oil kept outstanding performance since November and it is now trading slightly above 44.90.
Last Wednesday, the price broke the strong resistance at 43.70 which has been tested for many times in June. Although the two-line MA shows a death cross today, the uptrend is not likely to reverse soon. There is more likely to have a pullback to around 43.70 for gaining more bullish momentums.
If the OPEC alliance can reach a consensus and agree to delay its output hike in this week’s meeting, the oil price would definitely be advantaged and begin to rally again.
Support: 92.15, 91.75
Resistance: 93.20, 94.20, 94.75
S&P 500 Index (H4)
S&P 500 was trading around the historic high but still failed to take a breakout last week. The price currently keeps testing its high point.
Both two-line MA and RSI show bullish signal and support for continuation of the uptrend, but it is hard to anticipate the time for breakout. If the optimistic sentiment enhances due to further positive news on vaccines or economics, breakout would occur soon. If the market digests the good news of last two weeks and calms down, the index might keep fluctuating around 3515 to 3645 for longer time.
Support: 3585.00, 3515.00
Australian dollar experienced a good week just like other two commodity currencies, CAD and NZD and it surged to near the highest point set in previous three months.
Even though both two-line MA and RSI also show a continuation of the uptrend on the pair, the breakout cannot be confirmed by now. It is highly possible to hover near the resistance at 0.7415 for a whole week if the market positive sentiment getting weakening.
Support: 0.7245, 0.7160
Resistance: 0.7415, 0.7755
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