Gold and BTC have noticeably increased in price

Financial and commodity markets analytics

Market Watch review. 06.11.2020

In today's release, we’ll cover the following topics:

  • Joe Biden remains the leader. 
  • The rise in gold prices. 
  • Bitcoin is close to $16,000. 
  • Labor market reports in the USA and Canada. 
  • Analysis of a EUR / USD buy deal. 

Despite the fact that there are still no final results of voting for the US presidential election, Joe Biden only needs to win in one of the four states to get the required number of points. We see that the stock market reacts quite optimistically to this information, thereby putting pressure on the USD, which has noticeably weakened in a pair with most currencies.
I would like to draw your attention to the GBP/USD currency pair, the quotes of which came close to the target level at 1.3160. Therefore, further weakening of the USD will contribute to the growth of the quotes of this currency pair to 1.3250. Despite the fact that trading volatility remains elevated and there is still no clear certainty about who will be the next US president, a bullish scenario remains a priority.

Now let's move on to gold. Please note that this asset has not performed the function of a protective asset in its pure form for quite a long time, but only becomes more expensive when the Fed increases liquidity. Yes, Joe Biden's victory will increase the likelihood of further stimulation of the US economy, so gold and US stock indices continue to rise in price. In this case, we observe the classic model "buy on rumors and sell on facts".

I would also like to draw your attention to another tool that clearly benefits from an active printing press in the Federal Reserve – Bitcoin. Yes, Bitcoin, along with gold and the stock market, are responding positively to the injection of liquidity into the world's largest economy. Moreover, let me remind you that the Bank of England has already increased the volume of economic stimulus, and the ECB quite clearly hinted at its readiness to increase in December. Therefore, BTC still has the potential for further growth.

Shifting to the American trading session, I will note the upcoming publication of reports on the labor market in the United States and Canada. The key indicator is not the unemployment rate, but the change in the number of people employed in October. A significant decrease in these indicators may put pressure on the USD and CAD. But for the US dollar, the election remains a more important event, and for CAD, the price of oil, further growth of which will help strengthen the Canadian dollar.

I will conclude today's review with an analysis of the EUR/USD buy deal with a volume of 1 lot. After the breakdown and fixation of the pair quotes above the 1.1700 level, a buy deal was opened at 1.1720, the Take Profit order was placed at the nearest strong technical resistance level 1.1830 - the maximum since the end of October. The profit on this trade was $1100.

Closely monitor the news background and be prepared for all the surprises of the market.


Analyst

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