ForexLive European FX news wrap: Another dose of vaccine optimism

Author: Justin Low | Category: News

Forex news from the European trading session - 16 November 2020

Headlines:

Markets:

  • CAD leads, JPY lags on the day
  • European equities higher; S&P 500 futures up 1.1%
  • US 10-year yields up 2.6 bps to 0.923%
  • Gold down 0.8% to $1,874.83
  • WTI up 4.3% to $41.85
  • Bitcoin flat at $16,288

EOD 16-11
So, that makes its back-to-back Mondays now that we got a vaccine pop in the market. Although, this should have been telegraphed and factored in already since last week as warned at the time here and here.

Still, risk assets are getting excited as we see European stocks push gains of between 1-2% while Dow futures extended gains from 0.8% to near 2% on the news. Tech is once again the big loser as Nasdaq futures erased gains to fall into negative territory.

Elsewhere, 10-year Treasury yields climbed by about 5 bps to 0.929% and that helped to pin the yen lower in the major currencies space.

USD/JPY got a pop from 104.60 to 105.13 but gains stalled at the 100-hour moving average, seen at 105.10, before slipping back just under 105.00.

The dollar also weakened on the news but not by a whole lot as AUD/USD is now holding just above 0.7300 after having earlier tested the figure level and gains stalled.

USD/CAD though is showing signs of a possible further downside push below 1.3100 as oil rallies by over 4% and that is helping to underpin the loonie with USD/CAD falling below the confluence of its key hourly moving averages @ 1.3079-88.

EUR/USD got a mild jump from 1.1825 to 1.1840 levels but key resistance is still seen closer towards 1.1900 with near-term support seen at 1.1809.

Essentially, the market is reacting in almost similar fashion as it did with the Pfizer news last Monday but arguably with less conviction. The key question now is, with contrasting narratives still playing out, will we see a repeat of the fade exactly one week ago?

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