Trade Idea (2020-11-06) Risk-on USD selling

Trade Idea

Good morning.

US stocks continued to rise yesterday, with DJIA temporarily rising 647.

The US presidential election is likely to reach a majority by Mr. Biden, but the risk of a legal battle is increasing. Majority of The House of Representatives is likely to become a Democratic Party and majority of Senate is a Republican as “Divided parliament,” and it is well-received that the scenario of “financial deterioration and rising interest rates due to triple blue” will collapse. If majority of Senate is Republican, there are also expectations that the Democratic Party’s alleged aggressive introduction of regulations on giant IT companies will be less likely. FOMC had no policy changes, as most expected, and market reaction was limited.

The foreign exchange market has taken a risk-on USD selling. EURUSD temporarily rose to 1.1860, surpassing the 20 daily MA line and ending at 1.182. JPY is appreciating to around 103.5.

We have employment statistics of US today.

EURUSD H1 (Please click the chart to enlarge.)

Market Environment

Yesterday’s currency strength

US market yesterday

DJIA: 28,390.18 (+542.52, +1.95%)
NASDAQ: 11,890.93 (+300.15, +2.59%)
S&P 500: 3,510.45 (+67.01, +1.95%)
GOLD: 1,941 (-5.8)
OIL: 38.12 (-0.67)
US 10-YR: 0.778 (UNCH)
VIX: 27.58 (-1.99)

Asian market today

Nikkei: 24,341~ (+236)
CME Dow future: 28,221~(-171 Dow)

Economic indicators today

Counting of US presidential election
GMT 13:30 (US) NFP, Unemployment rate