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DAX falls to 4-month low

Silver (XAG/USD) –Daily Candlesticks
Source: GKFX / MT4 (October 28, 2020)

XAG/USD has been rising in an upwards channel since bottoming on September 24, which is potentially part of a bearish flag pattern that would imply another steep price decline toward $18.50 per oz (the highs made in January and February). 
 

TAKEAWAYS


•    DAX tumbles back below 12,000 to lowest since June
•    Microsoft tops profit and revenue estimates
•    Bitcoin continues surge to above $13,700
•    UK testing shows antibodies falling rapidly after COVID infection
•    DAY AHEAD: Visa, MasterCard earnings, Canada rate decision
 

GURU WISDOM


When everything seems to be going against you, remember that the airplane takes off against the wind, not with it. – Henry Ford
 

MARKETS


Rising COVID cases hit sentiment across markets again on Tuesday with heavy losses in European stock markets – especially in France, Spain and Italy where new ‘semi-lockdown’ restrictions are being implemented. German stocks continued the descent led by software company SAP from Monday with the Dax index hitting a 4-month low.

Losses were present but slimmer on Wall Street ahead of a number of key US tech earnings reports. Microsoft beat top and bottom line estimates after the close but the stock was little moved in a sign that it may already have been ‘priced to perfection’. 
The US dollar dropped even after US economic data came in hotter than expectations with less demand for a haven. Durable goods orders and home prices both saw much bigger monthly gains than expected in September and August respectively. 

USD/CAD hovered near 1.32 ahead of today’s rate decision from the Bank of Canada.

Gold and silver prices edged up unconvincingly with the weaker dollar but continue to heavily underperform Bitcoin, which rose above $13,700 on Tuesday. 
 

DAX < 12k


German stock markets have taken a severe hit in the past two days, taking the DAX to below 12,000 for the first time since June- driven by disappointing earnings and the rising possibility that Germany will enter another national lockdown to contain the coronavirus spread.  It was reported that German chancellor Angela Merkel has warned colleagues that Germany is on the verge of losing control of the virus.
 

Herd immunity


Doubts have been raised about the prospect of herd immunity to COVID-19 after a UK study of over 350,000 people. The so-called ‘REACT-2’ study showed the percentage of the British population with antibodies had fallen between June and September. It implies the number of people with antibodies fell and that immunity wanes quickly. The implication could be that it will take longer – or it may not even been possible to reach herd immunity to the virus as a population.