Dollar reverses February gain

TAKEAWAYS

•    EUR/USD hits highest in February, USD/JPY under 105 as US dollar slumps
•    GBP/USD breaks out to highest since May 2018
•    The Nasdaq and Russell 2000 narrowly hit fresh records
•    China’s Shanghai composite jumped 2% 
•    Bitcoin hits $48,000 after investment from Tesla
•    GameStop drops under $50 after reaching peak over $400
•    Gold gains for 3rd day, silver crosses back over $28 per oz
•    WTI crude drops after biggest weekly inventories build since April
•    US COVID-19 cases are down 36% from the average two weeks ago
•    Senate votes that Trump 2nd impeachment is constitutional 
•    US job openings rose to 6.65 million in December and are back above pre-pandemic levels
•    DAY AHEAD: China CPI, Germany CPI, US CPI
 

AUD/USD Candlesticks

 
Source: GKFX / MT4 (February 9, 2021)

AUD/USD has rallied to the top of a down-sloping channel. This channel could be part of a longer-term bull flag pattern. A break above the trendline implies an equal move to the proceeding rally before the flag formed. 

GURU WISDOM

“The first one gets the oyster, the second gets the shell.” – Andrew Carnegie

MARKETS

*Daily closing price
↗ EUR/USD    1.2116        (+0.56%)
↗ GBP/USD    1.3813        (+0.54%)
↘ USD/JPY    104.57        (-0.62%)
↘ S&P 500    3912.60    (-0.08%)
↗ Hang Seng    29,476.19    (+0.53%)
↗ Gold        1835.61    (+0.30%)
↗ Oil (Brent)    61.20        (+1.06%)
↗ Bitcoin    47,380        (+2.02%)

NEWS

Scope for as larger than-expected US fiscal stimulus package is pushing up Treasury yields but weighing on the US dollar, while stocks on Wall Street ended flat. The dollar index hit a 2-week low before ending lower by 0.6%. 

Joe Biden has conceded to a $75,000 earnings cap to the next round of $1400 stimulus checks in hopes the full $1.9 billion deal can be passed with bipartisan support. The dollar weakness has propped up precious metals with gold rising for a third day.

Speculation that more firms will join Tesla in holding Bitcoin as well as weakness in the US dollar saw BTC upwards momentum take the cryptocurrency to just shy of $50,000 for the first time. 

Stocks in China saw strong gains for a second day as investors reacted positively to news from regulators that the Shenzhen Stock Exchange will merge with the SME. Concerns are also easing about new anti-monopoly reforms that may not have an immediate impact on China’s big tech giants. 

DAY AHEAD 

*Times in GMT
01:30 – China Producer Price Index (YoY)(Jan) [0.4 % Exp vs. -0.4 % Prev]     
01:30 – China Consumer Price Index (YoY)(Jan) [0 % Exp vs. 0.2 % Prev]
07:00 – Germany Harmonized Index of Consumer Prices (YoY)(Jan) [1.6 % Exp vs. 1.6 % Prev]
13:30 – US Consumer Price Index (YoY)(Jan) [1.5 % Exp vs. 1.4 % Prev]     
17:00 - BoE's Governor Bailey speech