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Bitcoin rally picks up steam

Gold (XAU/USD) – Daily Candlesticks
Source: GKFX / MT4 (October 21, 2020)

Gold has broken a down-sloping trendline connecting the swing highs made since August. There is resistance near $1230 per oz but the breakout signals bullish momentum. A break back below a rising short term trendline would negate the bullishness of the breakout.  
 

TAKEAWAYS


•    Bitcoin extends upside move – takes out $12,800.
•    GBP/USD pops 200 pips as EU/UK trade talks resume
•    Tesla reports 5th quarter of consecutive profits
•    European indices have another bad day, sink nearly 2%
•    DAY AHEAD: Intel earnings, US jobless claims, US Presidential debate (late)
 

GURU WISDOM


“Gold is a treasure, and he who possesses it does all he wishes to in this world and succeeds in helping souls into paradise” – Christopher Columbus
 

MARKETS


European markets sunk again on Wednesday with the FTSE 100 among the biggest decliners- falling below 5,800 which has acted as a multi-month floor to the price. Things were more mixed in Asia as Cathay Pacific shares popped after it announced over 5000 job cuts.


Stocks on Wall Street closed tentatively higher as stimulus talks reportedly made progress but still fell short of a deal. Chances of a pre-election agreement now seem far-fetched. A bigger impact from the talks was felt in fixed income markets as 10-year Treasuries hit a 4-month high.

Post-Brexit negotiations resumed today after UK PM Boris Johnson threatened to walk away and the EU laid an ultimatum last week, helping GBP/USD jump 200 pips. 

Major currency pairs moved higher on Wednesday as the dollar index fell back to a 7-week low. The greenback has been giving back September’s gains this month. The rising belief that there will be a big new issuance of US debt to pay for a stimulus bill either before or shortly after the election is weighing on the dollar.

The dollar weakness also benefitted precious metals but crude oil swung lower with WTI falling below $40 per barrel after another weekly rise in US gasoline inventories, showing weak fuel demand from Americans.
 

Tesla’s Q3


Tesla stock will be in play at the open of trading on Wall Street after the electric vehicle-maker beat earnings and revenue estimates to reach a fifth consecutive quarter of profits. Some of the gains were baked in and there will be some concern about the cost of new factories in Texas and Germany when the demand outlook is more uncertain. Tesla traders are still shell-shocked from the rollercoaster ride higher over the summer and drop in September. These solid results should go some way to ease concerns about the business, though perhaps not about the very high valuation of the stock.
 

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