Trade Idea (2020-11-10) Stock surge, rising interest rate, and USD buyback

Trade Idea

Good morning.

Yesterday’s DJIA surged over $1,600 shortly after market opened, hitting a temporary high during trading hours. It was well received that Pfizer reported good results in the interim results of clinical trials of vaccines for COVID-19. Buybacks have increased in the airline and travel leisure sectors, which are heavily affected by the pandemic. On the other hand, NASDAQ has fallen.

I was surprised at USDJPY yesterday. USDJPY temporarily rose to the latter half of 105 due to the rise in risk-on stock prices, rising US interest rates (bonds were sold), and the flow of JPY selling and USD repurchases, following good reports of the vaccine clinical trial effect.

EURUSD temporarily rose to 109.2 due to high stock prices and risk-on USD selling, and then USD repurchase became dominant due to the rise in US interest rates, and it fell by more than 100 pips to 1.18 and ended at 1.181.

EURUSD H1 (Please click the chart to enlarge.)

USDJPY H1 (Please click the chart to enlarge.)

Market Environment

Yesterday’s currency strength

US market yesterday

DJIA 29,157.97 (+834.57, +2.95%)
NASDAQ 11,713.78 (-181.45, -1.53%)
S&P 500 3,550.5 (+41.06, +1.17%)
GOLD 1,869.4 (+15)
OIL 39.77 (-0.52)
US 10-YR 0.915 (-0.043)
VIX 25.75 (+0.89)

Asian market today

Nikkei: 25,096~ (+256)
CME Dow future: 29,037~(-120 Dow)

Economic indicators today

GMT 09:00 (GE) ZEW business climate