Asian shares went higher on Tuesday following another strong session in the U.S. on Monday night. Global stocks are trading at a three-month high as businesses reopen around the world following coronavirus shutdowns, even with unemployment escalating. Goldman Sachs Group Inc. said the U.S. labour market is showing the earliest signs of rebounding.
The dollar continued the slide on Tuesday as the market is still cheering the risk-on sentiment although most geopolitical risks persist. While US President Trump’s refrain from levy fresh sanctions on China during Friday’s conference gained many accolades, hopes of further stimulus by major central banks and the optimism surrounding the economic restart seem also to have played their roles.
Copper prices soared to their highest in nearly three months, led by a solid recovery in China’s demand and the reopening of economies. The most-traded July copper contract on the Shanghai Futures Exchange (ShFE) rose as much as 1.2% to 44,800 yuan ($6,288.43) a tonne, its highest since March 6.
Gold tumbled lower on signs of economic recovery as more countries ease lockdown measures and prepare for the reopening of their economies. Elsewhere, the protests in the United States along with the lingering Sino-U.S. tensions and weaker dollar limits the downside of the metal.
Oil edged higher as the market looks on in anticipation to see if OPEC and allies will further extend their production cuts. With riots across the US still happening and fear of a 2nd virus wave still on the horizon, any effects on markets recovering have yet to be seen. Market observers are saying that if the oil coalition can agree on a further 3 month output cut, there would be a real chance that the market could flip from a supply glut to a supply deficit and end up pushing oil prices higher. The CAD rose in line with oil and strongly outperformed a much weaker USD.
Technical & Trade views
USDCAD (Intraday bias: bullish above 1.3512)
We turned bullish as price is bouncing from our 1st support where the 100% fibonacci extension is. Price is likely to bounce here towards our 1st resistance where the 38.2% fibonacci retracement is. Ichimoku also shows further pushdown towards 1st support is possible here.
UKOIL (Intraday bias:Bullish above 37.28)
Oil rose higher and surpassed previous resistance. With price now holding above moving average, a further push up above 1st support at 37.28 towards 1st resistance at 39.98 is expected. Bullish bias remains as long as price is above 1st support.
XAUUSD ( Intraday bias: bullish above 1725.878)
Price is approaching our first support, in line with our 100% fibonacci extension, 38.2% fibonacci retracement and horizontal overlap support where we could see a bounce above this level to our first resistance level. Ichimoku cloud is showing signs of bullish pressure in line with our bullish bias.
XCUUSD ( Intraday bias: bullish above 2.42160)
Price is facing bullish pressure from our ascending trend line and support level, in line with our 78.6% fibonacci extension and 50% fibonacci retracement, where we remain bullish above this level and could see a bounce to our first resistance level. Ichimoku cloud is showing signs of bullish pressure, in line with our bullish bias.