Trade Idea (2020-11-09) Risk-on USD selling continue

Trade Idea

Good morning.

DJIA fell slightly last Friday, while Nasdaq closed slightly positive. DJIA has risen by more than $1,800 in the four days before and after the US presidential election.

After passing the US presidential election, the stock market is raising expectations for an upside, and bargain purchases are also aggressive at the downside. In the US presidential election, candidate Biden declared victory over the weekend.

In the parliamentary elections, the House of Representatives is almost certain to secure a majority of Democrats, but the Senate is close, but the Republicans are likely to maintain a majority, and there seems to be no “triple blue” scenario. The market is pleased with this situation, and it seems that if it becomes “divided parliament”, it is expected that the low interest rate policy will continue and the possibility of regulation on giant IT companies claimed by Democratic Party will be weakened.

USD continued to weaken in the foreign exchange market, and USDJPY fell to 103.18. At the FOMC the day before, there was no change in the view that the Fed’s low interest rate policy is prolonged, risk-on is inducing a weakening of USD, and it is pointed out that USDJPY may fall to the 101 level. EURUSD was also bought and temporarily rose to 1.189. It may try 1.20, which is an important psychological milestone, again. However, USD has been depreciating, and EUR has not strengthened.

EURUSD H1 (Please click the chart to enlarge.)

Market Environment

Yesterday’s currency strength

US market yesterday

DJIA 28,323.4 (-66.78, -0.24%)
NASDAQ 11,895.23 (+4.3, +0.04%)
S&P 500 3,509.44 (-1.01, -0.03%)
GOLD 1,951.5 (+4.7)
OIL 37.49 (-1.3)
US 10-YR 0.82 (+0.042)
VIX 24.86 (-2.72)

Asian market today

Nikkei: 24,822~ (+497)
CME Dow future: 28,548~(+225 Dow)

Economic indicators today

Today we have no important economic indicators.