USD falters, stocks recover from losses on Thursday
07 October 2021
The greenback traded lower today, and it looks like bulls can't sustain a solid bullish momentum.
For example, the AUDUSD and NZDUSD pairs failed to post new lows, suggesting a possible bounce could come soon (the USD weakness).
The USDJPY pair seems to struggle above 111, and the EURUSD pair is going lower but very slowly.
Later in the day, the ECB monetary policy account minutes will be released. It's a detailed record of the ECB Governing Board's most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates.
Additionally, USDCAD traders will pay attention to the BOC Governor Tiff Macklem's speech, who will speak about global financial architecture at an online event hosted by the Council on Foreign Relations.
On Wednesday, the US Senate Minority Leader Mitch McConnell offered a short-term suspension of the US debt ceiling to avert a national default until a more permanent solution can be found before the end of the year. That was great news for the markets as the default anxiety had been rising fast.
Stock markets staged an impressive recovery from their 1.5% losses yesterday and managed to close in positive territory, with the bullish wave riding today as well. At the time of writing, the DAX index was up half a percent, while the Nasdaq 100 index was nearly 1% stronger, advancing above previous lows, a possible bullish reversal.
Lastly, oil dropped below July's highs, which could be interpreted as a false bullish breakout and a possible bearish reversal. As long as the WTI benchmark remains below 76.80 USD, speculative traders could be betting on a further decline toward the support of 74 USD. However, both the medium and long-term outlooks still seem bullish.