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Oil dives 4%, Dow hits record

 

 

TAKEAWAYS

 


•    GBP/USD makes 2-week high after PM Johnson confirms loosening UK restrictions April 12
•    US Dollar turns soft after 3 weeks of gains despite strong US data
•    AUD/USD rises before RBA meeting
•    Oil price slumps 4% as looming higher OPEC supply weighs
•    Dow & S&P 500 close at record highs after blowout US jobs report
•    Tech stocks carry Nasdaq to within 3.3% of all-time high
•    ISM March US services PMI blows through estimates to print a record high
•    Democratic Senator Joe Manchin would not support a 28% US corporate tax rate
•    General Motors (GM) stock rose over 5% as excitement builds over EVs
•    Nikola shares drop after founder makes $58 million dollar stock sale
•    DAY AHEAD: RBA rate decision
 

BEST CHART
AUD/CAD – Daily Candlesticks

 


 
Source: GKFX / MT4 (April 6, 2021)

 

AUD/USD has formed a bullish pin-bar reversal from a support zone near the December 2020 low as well as the 61.8% Fibonacci retracement of the rally from October through February. A close back over the 200 DMA and 0.96 would suggest the longer-term uptrend is about to resume.

 


GURU WISDOM

 


“The best way to predict the future is to create it.” – Peter Drucker

 


MARKETS

 


*Daily closing price
↗ EUR/USD    1.1812        (+0.37%)
↗ GBP/USD    1.3906        (+0.55%)
↘ USD/JPY    110.16        (-0.47%)
↗ S&P 500    4077.78    (+1.44%)
↗ Hang Seng    28,938.74    (+1.97%)
↗ Gold        1728.16    (+0.00%)
↘ Oil (Brent)    62.26        (-3.70%)
↗ Bitcoin    58,880        (+1.10%)

 


NEWS

 


The big mover on the day was the price of oil, which dumped 4% in what felt like a delayed reaction to last week’s OPEC decision. The OPEC+ cartel agreed to lift production in a gradual fashion from May through July but oil markets had initially reacted positively to the news. Now reality is sinking in, alongside news of higher Iranian production and new variants of covid, which threaten the demand outlook.

 

The US dollar started the week on the backfoot, erasing the small gains made after the blowout jobs report on Friday. That allowed GBP/USD to rise to a 2-week high – helped by positive news on the UK reopening from UK PM Boris Johnson. 

 

The USD weakness was notable in the face of the strongest ISM services PMI on record for March. The survey came in hot at 63.7 instead of the 59.0 expected. When a currency weakens on very good news – that is a bearish sign and portends to possible further weakness.

 

Europe reopens after the Easter break today and will likely have to play catch-up with big gains on Wall Street that helped both the Dow Jones and S&P 500 to a fresh record high on Monday.  

 


DAY AHEAD 

 


*Times in GMT
04:30 – RBA Interest Rate Decision [0.1 % Exp vs. 0.1 % Prev]
09:00 – Eurozone Unemployment Rate (Feb) [8.1 % Exp vs. 8.1 % Prev] 
14:00 – US JOLTS Job Openings (Feb) [6.835 M Exp vs. 6.917 M Prev]

Source: TradingWriters.com