Global equity markets roared higher on Monday after the drug companies Pfizer and BioNTech announced that their coronavirus vaccine was 90% effective in tests!
This highly encouraging development has injected investors with a sense of hope that economies around the world could soon return to normal. It must be kept in mind that stock markets had already been on a tear in response to Saturday’s news of Joe Biden defeating Donald Trump to claiming the White House. The positive vaccine news is the icing on the pudding and has offered markets an incredibly sense of relief at a time where coronavirus cases are surging across Europe, North Africa and the United States.
There were some interesting movements across equity, currency and commodity markets today as investors digested Biden’s presidential win and renewed vaccine hopes.
S&P 500 hits all time high!
For those looking for action, just take a look at the S&P 500. The Index has jumped as much as 3.9% to a fresh record above 3645.
The technicals are heavily bullish with prices trading above the 50 & 100 SMA. With risk-on the name of the game, the index may extend gains to the upside.
Yen crumbles across the board
It has not been a great day for the Japanese Yen.
The currency has weakened against every single G10 currency and declined almost 2% against the dollar thanks to the exceedingly optimistic mood across markets.
Talking technicals, the USDJPY has punched above the 105.25 level. A daily close above this point could signal an incline towards 106.00.
Gold tumbles on risk-on sentiment
Gold collapsed like a house of cards on Monday, tumbling more than 4.5% amid the risk-on mood. A huge spike in US Treasury bond yields further drove flows away from the non-yielding metal, with prices trading around $1858 as of writing. It looks like bears have returned to the scene with a solid close below $1845 opening the doors to levels not seen since July 2020 around $1800.
Dollar Index pressured below 92.70
The dollar stabilised against a basket of currencies having touched a 10-week low of 92.12.
However, the DXY remains under pressure below the 92.70 resistance while lagging indicators favour the downside. Should prices fail to break above 92.70, the index may decline back towards 92.12 and 92.00, respectively.
EURUSD still within range
It’s the same old story with the EURUSD. Prices remain within a very wide range on the daily charts with support around 1.1650 and resistance below 1.2000.
The daily close above 1.1825 could open the doors towards 1.1965 and 1.2000. If prices back below 1.1825, the next points of interest may be found around 1.1750 and 1.1650.
AUDUSD eyes 0.7350
A picture is worth 1000 words. Bulls remain in the driving seat with the first checkpoint around 0.7350. A breakout above this level could swing open the doors towards 0.7400.
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