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ZFX: Traders turn to be cautious amid correction markets
These days, positive news of coronavirus vaccine development and the political certainty in the US have led to the optimism in global markets. However, after the recent surge of the stock markets due to the “hopes”, the momentum has slowed down. On Wednesday, Asian and European stocks were overall mixed, and the Wall Street was under correction.
With the US Thanksgiving holiday coming, it may be kind of a risk management or profit taking before such a long weekend, that traders need to adjust their portfolio.
ZFX analyst Jacob Leung said that, so far bullish sentiment is still maintained, as we all can see that positive news is dominated , hurting traditional safe-haven like gold. However, we need to be aware that it may be another choppy day as the liquidity may be lower throughout the holiday.
Oil market should be one of the focus recently. The coronavirus vaccine effectiveness, a weaker dollar, and the better economic figures are all driving such risk-on rally in oil prices. On the other hand, gold price tested $1800 level in previous sessions. Even gold price bounced back a bit on Wednesday, traders were still cautious. ZFX analyst Jacob Leung said that, there is obviously a resistance near $1820 level, triggering a fast retreat on Wednesday.
Today, stocks in Asia-Pacific were still mixed in early session. The minutes of the FOMC showed that the Fed members discussed ways to further support the US economy through the monetary policy. However, the news has no change to the current momentum.
Overall, traders believe that the dollar will still be under pressure as the Fed will keep the rates near the historical low for years. With more positive expectations coming next year, riskier currencies may be boosted by risk-on sentiment.