USD Surges, S&P 500 Futures Sink as President Trump Exams Optimistic For Covid-19

US Greenback, S&P 500, President Donald Trump, Covid-19 – Speaking Factors:

• Fairness markets tumbled throughout APAC commerce as information that President Trump had examined constructive for Covid-19 sapped market sentiment.
• The US Greenback Index’s rebound might be in danger regardless of adversarial shift in market sentiment.
• S&P 500 index might lengthen its fall from the yearly excessive.

Asia-Pacific Recap

Danger urge for food evaporated through the Asian buying and selling session, as information that President Donald Trump had contracted the novel coronavirus roiled fairness markets.

S&P 500 futures tumbled and Australia’s benchmark ASX 200 index fell 1.67% whereas the haven-associated US Greenback and Japanese Yen surged towards their main counterparts.

Gold rallied 0.53% and silver spiked over 1%, as yield on US 10-year Treasuries dipped again under 66 foundation factors.

Wanting forward, Euro-area inflation knowledge headlines the financial docket forward of the volatility-inducing US non-farm payrolls report for September.

Market response chart created utilizing TradingView

Buyers Flee to Secure Havens after Trump Exams Optimistic to Covid-19

President Donald Trump’s announcement that he and First Girl Melania Trump had examined constructive for Covid-19 despatched fairness markets tumbling throughout Asia-Pacific commerce, with S&P 500 futures falling as a lot as 1.85% and the haven-associated US Greenback spiking larger towards its main counterparts.

Trump tweeted “Tonight, @Flotus and I examined constructive for Covid-19. We’ll start our quarantine and restoration course of instantly. We’ll get by this TOGETHER!”. The First Girl additionally tweeted that “@Potus and I are quarantining at house after testing constructive for COVID-19. We’re feeling good and I’ve postponed all upcoming engagements”.

Given the President has been brazenly dismissive of social distancing measures and regularly known as into query the effectiveness of mask-wearing in stopping the transmission of Covid-19, the shock analysis might swing the pendulum additional within the favour of Democratic nominee Joe Biden.

Biden leads Trump considerably within the polls, together with his lead rising markedly within the wake of the primary Presidential debate of the 2020 elections on September 30.

Furthermore, the President’s well being standing now calls into query the second debate scheduled for October 15, with the enforcement of a two-week quarantine interval suggesting that Trump would solely have the ability to emerge from the confines of the White Home on the day of the talk.

Nevertheless, given White Home doctor Scott Conley’s expectation that Trump will proceed “finishing up his duties with out disruption whereas recovering”, there’s a distinct chance that the President’s analysis can have little impact on the upcoming election schedule.

However, the President’s restoration will probably be carefully eyed within the coming days, with a notable deterioration in well being outcomes most likely exacerbating the latest shift in market sentiment and leading to a marked enhance in haven flows.

Supply – Bloomberg

US Greenback Index (DXY) Day by day Chart – March Low Capping Topside Potential

From a technical perspective, the US Greenback Index’s (DXY) rebound from the September low seems to be working out of steam, as worth fails to interrupt above key resistance on the March low (94.65) and stumbles again under the psychologically imposing 94.00 stage.

With the DXY closing again under the September 2018 low (93.81) and the RSI struggling to push again above 60 into bullish territory, additional losses might be within the offing.

Subsequently, a day by day shut under the 21-day shifting common (93.56) would most likely sign the resumption of the first downtrend, with a break under the trend-defining 50-DMA (93.26) wanted to carve a path to retest the yearly low (91.75).

Conversely, an in depth again above the 94 mark might encourage a extra sustained push to the upside and convey the March low (94.65) again into focus.

US Greenback Index day by day chart created utilizing TradingView

S&P 500 (e-Mini) Futures Day by day Chart – Rising Wedge in Play?

The US benchmark S&P 500 index seems set to increase its fall from the report excessive set in September (3587), as patrons fail to drive worth again above the February excessive (3397.50) and the RSI dips under its impartial midpoint.

Though worth seems to be carving out a bullish Rising Wedge sample, additional losses look seemingly within the coming days, with a break again under the 38.2% Fibonacci (3306) probably triggering a pullback in the direction of confluent assist on the June excessive (3231.25) and 100-DMA.

Alternatively, a day by day shut above the February excessive (3397.50) would most likely invalidate bearish potential and will sign the resumption of the first uptrend.

S&P 500 (e-Mini) futures day by day chart created utilizing TradingView

— Written by Daniel Moss, Analyst for DailyFX

Comply with me on Twitter @DanielGMoss