Asian stocks saw modest gains on Thursday after S&P 500 rose for the third day and the Nasdaq Composite jumped to a record on Wednesday night. Pfizer and German biotechnology company BioNTech said they had developed a Covid-19 vaccine whose first trial showed it was safe, which has brought back the risk-on sentiment to the market.
USD is on a decline as the risk-on sentiment is dominating the market. But at the same time, the US and China continue to remain at loggerheads with the Trump administration progressing sanctions on China due to its Hong Kong security law. The geopolitical risks could be the tailwinds for USD if the tensions escalate.
Copper prices traded sideways as the bullish pressure from the supply disruption in Chile was countered by the bearish pressure as demand for the metal outside of China remains weak. In line with the fundamentals, the upside in prices could be capped as price is near our resistance level.
Gold prices slipped, retreating from its 8 year high driven by strong US data performance along with optimism as the developments of the Covid-19 vaccine showed that it was well tolerated in early-stage human trials, boosting investors’ risk appetite. Looking ahead, we maintain our bullish view on Gold in this uncertain environment, keeping in mind that we do not have the pandemic under control with the National Institute of Allergy in Infectious Diseases in the US warning that it could reach 100k cases per day.
Oil prices steadied as oil traded sideways. This is most likely due to more US states re-imposing anti-virus measures in multiple areas within the US. However the fears of the virus countermeasures were offset by a bigger than expected cut in American crude stockpiles coupled with the production cuts from OPEC+. In line with oil price, the CAD traded within a range against the USD as well.
Technical & Trade views
USDCAD (Intraday bias: bullish above 1.3618)
We turned bullish if price could break above the upside confirmation where the horizontal pullback resistance is. Price is likely to bounce further from there towards 1st resistance where the horizontal swing high is.
UKOIL (Intraday bias: Bearish below 42.22)
Oil whipsawed taking out previous resistances and support. With stochastics holding below resistance shows further bearish momentum. A break below downside confirmation would strengthen bearish bias and see price drop towards 1st support. As long as price holds below 1st resistance, bearish bias is intact.
XAUUSD ( Intraday bias: Bullish above 1765.15) 
Price is testing our first support in line with our 61.8% retracement, horizontal overlap support and 78.6% fibonacci extension, where we could see a bounce above this level to our first resistance level. Ichimoku cloud is showing signs of bullish pressure in line with our bullish bias.
XCUUSD ( Intraday bias: bearish below 2.76608)
Price is facing bearish pressure from our first resistance where we remain bearish below this level and could see a further drop to our first support level, in line with our horizontal pullback support, 38.2% fibonacci retracement and 61.8% fibonacci extension. Stochastic is facing bearish pressure from our resistance as well.
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Desmond Leong runs an award-winning research firm (The Technical Analyst finalists 2018/19/20 for Best FX and Equity Research) advising banks, brokers and hedge funds. Backed by a team of CFA, CMT, CFTe accredited traders, he takes on the market daily using a combination of technical and fundamental analysis.