Oil price is back above $65 on improved sentiment. U.S. equities made a new all-time high as the Pfizer-BioNTech COVID-19 vaccine gained full FDA approval.
Oil price bounced strongly from its recent lows on the back of a sharp move higher in equities. The improved sentiment led to the main indices in the United States to reach new all-time highs and to the price of oil to rise in an almost vertical line.
There was no economic data to push markets higher. Instead, markets liked the fact that the FDA in the United States gave its full regulatory approval to the Pfizer-BioNTech COVID-19 vaccine. The move higher in equities led to a risk-on wave – the U.S. dollar declined against the euro and the Australian dollar, the British pound and the New Zealand dollar.
In Europe, the main equity indices opened higher for the second day in a row. Travel stocks have risen the most, fueled by yesterday’s news from the United States. In Germany, better than expected economic growth has led to the Dax index pushing against 15,900.
Gold regained the $1,800 level after it climbed back from below $1,680 a week ago. The improved sentiment led to investors selling the U.S. dollar against literally any other asset – so the price of gold regained the lost ground.
Economic Events to Consider Today
The German Final GDP surprised markets by coming out at 1.6% on expectations of 1.5%. The strong data support the equity markets and investors already position for the main event of the year in Europe – the German election scheduled for the end of September.
New Home Sales in the United States are expected at 698,000 in the previous month, up from 676,000 a month earlier. However, the day is light from an economic calendar point of view, as investors await Fed Chair Powell’s speech at the Jackson Hole Symposium scheduled for next Friday.
Today’s Markets to Watch
Today’s markets to watch are oil, MicroStrategy, and JD.com.
Oil is back testing resistance, and a daily close above the falling trendline opens the gates for a jump to $70. On the flip side, the inability of the price of oil to hold above $70 in the upcoming weeks may signal more downside. In the medium term, the $60 and $70 round levels are pivotal for the price of oil, offering support, respectively resistance.
Bitcoin’s recent strength has supported MicroStrategy’s share price. The stock doubled since the June lows just as Bitcoin bounced from $30,000. From a technical perspective, MicroStrategy remains bullish while above the rising trendline, with bulls eyeing a move above $900 that should trigger even more strength. On the flip side, a daily close below $500 is bearish.
JD.com is a Chinese e-commerce company that has recently been under pressure – just like the entire Chinese tech sector. The price bounced from the lows but remains bearish while below the falling trendline. A drop below $60 should trigger more downside, while a daily close above $72 is bullish.
Winners and Losers
U.S. equities and oil are the main winners of the trading week so far; the U.S. dollar remains offered.