State of The Markets | Markets Mixed in Reaction to Vaccine and Stimulus


Markets mixed in reaction to vaccine and stimulus . US Equities were mixed Thursday as data shows decline in weekly jobless claim but decline in services sector of the economy, making investors looked ahead to Friday’s employment numbers. Dow and Nasdaq was up 0.29% and 0.23% respectively, while S&P was slightly down by 0.06%. Asian equities drift lower in early Friday trading as Pfizer raised a concern on meeting its vaccine roll-out target because of supply-chain obstacles. On that note, bonds rallied and yields fell with the 10Y benchmark closed lower by 0.013%.

Crude rallied and closed above $46.30/barrel as OPEC and Russia agreed to raise production more gradually than expected; while gold continue to be supported on every dip and closed higher, around 0.08%, than Wednesday as Dollar index continue its free fall to 90.50 before bidders emerged to support the reserve currency.

Investors are pricing in another round of stimulus as Democrat House Speaker and Republican Senate Leader signaled that they are closer to reaching agreement before year end. The primary beneficiaries were Yen, Sterling and Swiss; which indicated some levels of risk-off as major players coming to close its book in the next few weeks.


Another block orders in Sterling. Block orders in Sterling was seen again Thursday, through Euro/Pound and the pair has more than 90% negative correlation on the daily and weekly to GBP/CHF – our pick today. After the surge last month, breaking out of the 1.18 – 1.19 range, recent drop is a medium term pullback of an uptrend as evident in the convergence of short and long term sentiments. Short and medium term upside is expected as long as 1.19 handle remain intact, while immediate resistance is around 144 days MA, circa 1.2180, with monthly pivot around 1.2035. Our strategy would be buy on dip with 1.1870 stop while risk averse would prefer buy stop above 1.2 as there is a chance that the pair could dive lower to retest the 1.19 handle.

HORIZON 04122020


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The GBP/CHF chart is something I was looking for. Thank you for sharing. Will help me.

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Glad it helps…as it happened to be that the pair did dived deeper to test the 1.19 handle and indeed it went to as low as 1.17…so it always wise to wait for confirmation and use stop order…this is not to say that stop orders always work 100% of the time…as proven in this case where it was stopped out…so we must be ready with re-entry strategy if the setup is still valid…cheers…Season’s Greetings and Happy Holidays!