US Stocks Post New Record High: Yellen, ECB in focus

For the S&P 500 that had hung around sheepishly around the 3800 mark for the past two weeks, the blue-chip index took another major stride towards the 3900 handle, led by stocks in the IT, communication services, and consumer discretionary sectors.

Although the futures contracts are pushing even higher at the time of writing, their 14-day relative strength index is once again teasing the 70 mark which denotes overbought conditions.

“The overall outlook for US equities this year remains conducive for further gains, considering market expectations for more incoming US fiscal stimulus and the accommodative Fed stance.”

And with a new administration at the helm, fresh policies pertaining to the US health response to the pandemic may also hasten the recovery in the world’s largest economy.

Yellen be chillin’ on the Dollar

And the Washington watch doesn’t end with yesterday’s presidential inauguration – Janet Yellen’s confirmation as the new US Treasury Secretary could happen later today.

Just earlier this week, Yellen conveyed perference to let markets decide the Greenback’s value. This is a marked shift from the weaker Dollar policies pursued by the Trump administration; neither did Yellen state a preference for the strong Dollar policies of the mid-90s.

“Yellen’s stance may have given Dollar bears the green light to push the Greenback back into its downward channel, with many traders already crowding in on the Dollar shorts.”

However, they must first wait for US yields to pare back recent gains, with the Fed’s meeting next week potentially serving as the next catalyst.

ECB to stand pat while major risks hang overhead

The European Central Bank is due to make a rate decision today, though policy settings are expected to be left untouched at this meeting as the central bank continues to digest near-term risks.

“Extended lockdowns, a slower-than-expected vaccine rollout, and political tensions out of Italy present major headwinds for the EU’s economic recovery.”

Such concerns have also weighed on the Euro, which is posting a year-to-date decline against all of its G10 peers barring the Swedish Krona. Still, the bloc currency continues to trade around its highest levels against the US Dollar since 2018, while the trade-weighted Euro is close to its record high. A weaker Euro would enable the ECB to reach its post-pandemic inflation targets faster.

Coupled with Yellen’s relatively “hands-off” approach to the Dollar, the DXY’s performance may be heavily influenced by the Euro’s performance moving forward, considering that the shared currency accounts for 57.6 percent of the Dollar index.

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AUD/USD and NZD/USD Fundamental Daily Forecast – Aussie Dollar Boosted by Strong Recovery in Jobs Market

The Australian and New Zealand Dollars are trading higher on Thursday with both commodity-linked currencies seemingly poised to resume their uptrends after a nearly three week pause. Helping to boost the Aussie and Kiwi is a weaker U.S. Dollar which is declining across the board against major peers as plans for a massive U.S. stimulus package fueled market optimism and sapped demand for safe-have currencies.

At 11:09 GMT, the AUD/USD is trading .7771, up 0.0025 or +0.32% and the NZD/USD is at .7212, up 0.0041 or +0.57%.

Many analysts expect the dollar to continue its downtrend, which saw it lose nearly 7% in 2020 amid ultra-loose U.S. monetary policy and hopes for a post-pandemic global recovery.

In economic news, the Aussie Dollar rose after a report released on Thursday showed Australia boasted another solid rise in employment in December.

Australia Unemployment Falls to 6.6% as Recovery Strengthens

On Thursday, Bloomberg reported that Australian unemployment fell in December as a big-spending government budget and a second round of central bank stimulus spurred the economy’s recovery and encouraged firms to keep hiring.

The jobless rate declined to 6.6% from 6.8% in November, beating economists’ median estimate of 6.7%, data from the statistics bureau showed Thursday in Sydney. Employment advanced by 50,000 in December, matching estimates, as did the participation rate at 66.2%.

Australia’s recovery is bolstered by the authorities’ ability to contain the virus – even accounting for recent isolated outbreaks – boosting confidence and encouraging cashed-up households to spend. That’s prompted firms to resume hiring and Australian’s to return to the labor force, tempering the impact on unemployment as participation swells, according to Bloomberg.

Among other details in today’s jobs report:

  • Monthly hours worked increased by 0.1% in December, while declining by 1.5% over the year.
  • Under-employment fell by 0.8 percentage points to 8.5% and under-utilization decreased by 1.1 percentage points to 15.1%.
  • Full-time jobs advanced 35,700 and part-time roles gained 14,300

What Bloomberg Economics Says…

“Australia’s unemployment rate may have peaked as the labor market continues to heal from the damages wrought by the pandemic. Labor force participation hit a record high in December, as employment and hours worked recovered further,” said James McIntyre, economist.

Daily Forecast

Australia’s employment data was solid news. Its economy has now recovered 90% of the number of jobs lost during the pandemic.

The focus for traders now shifts to New Zealand’s consumer inflation report, due to be released at 21:45 GMT. The report is expected to show an increase of 0.2%, down from the previously reported 0.7%.

Overall, the resumption of the rally is being driven by increased demand for risky assets, a dip in U.S. Treasury yields and a weaker U.S. Dollar.

For a look at all of today’s economic events, check out our economic calendar.

Bitcoin Consolidation Looking To Break 40K?

We are long from 37,550 and shared another idea that will be in play upon the break of 36,450. As long as the 32.5 support level continues to hold, Bitcoin is likely to squeeze higher in the coming week. Such a squeeze can lead to a test of the 40K range high and a break out should take price into the 45 to 46K area at least. This would be the follow-through of a Wave 5 of 3.

IF Bitcoin breaks the 32.5K support instead, it increases the chances of a test of the next support which is 27.5K. IF this support is compromised, Bitcoin will then most likely be in a broad Wave 4 consolidation. A good example of such a formation is a Gold chart from the August peak to the December low. It can linger for weeks.
All markets are driven by irrational forces of greed and fear. Trying to figure out “why” it is retracing will not help you make better informed decisions. Price information is the purest form of information we can gather and evaluate because it is a reflection of all the known information in the world at the moment.
Our swing trade strategy looks to capitalize on the broader trend in a market that can take days or weeks to unfold. It is rules based which minimizes the adverse effects of our opinions, and other irrational behaviors. If you want to learn more about how it works, or see first hand examples of trades that we share, visit https://bit.ly/marketsignals and register for our free membership. Each week we send out a swing trade idea for free.

USD/JPY Fundamental Daily Forecast – Traders Shrug Off BOJ, Focus Remains on Treasury Yields, Risk Sentiment

The Dollar/Yen is edging lower on Thursday amid positive risk sentiment as Asian stocks followed U.S. equities in rising to new record after Joe Biden, who has laid out plans for a $1.9 trillion pandemic relief package, was sworn in as president. The Japanese Yen traded 103.335 per dollar, stronger than levels above 104.086 against the greenback seen earlier in the trading week.

In other news, the Bank of Japan kept monetary policy unchanged on Thursday while revising up its economic forecast for next fiscal year.

At 09:40 GMT, the USD/JPY is trading 103.430, down 0.117 or -0.11%.

Bank of Japan Leaves Interest Rates Unchanged Amid Gloomy Outlook

The Bank of Japan (BOJ) left its main policy unchanged after forecasting the economy will regain more lost growth than previously thought once it starts to recover from the current state of emergency.

The BOJ held its interest rate and asset buying setting intact, according to a statement from the central bank on Thursday. All economists surveyed by Bloomberg predicted no change in the bank’s main policy levers ahead of a policy review in March.

While the bank took a gloomier view of the current state of the economy as record cases of COVID-19 keep a state of emergency in place, the BOJ concluded that weaker growth at the end of the current fiscal year and a government stimulus package announced last month will result in a stronger rebound in the year starting April.

“The growth outlook, especially for fiscal 2021, has been lifted somewhat considering the impact of the government’s economic policy,” BOJ Governor Haruhiko Kuroda said at a briefing after the board met. “There is a high degree of uncertainty, though, because the outlook can change with the trajectory of the pandemic.”

Ahead of the meeting, economists had taken the view that the bank would likely hold off on any action until it completes a review of policy at its next gathering in March. By then the economic landscape and the trajectory for the pandemic should be much clearer.

Daily Forecast

Japanese Yen traders showed little reaction to the largely in-line outcome of the meeting. There primary focus is on risk demand and Treasury yields.

In this current turned around trading environment, increased demand for riskier assets tends to drive investors into the Japanese Yen and away from the safe-haven U.S. Dollar.

However, another spike higher in U.S. Treasury yields would help boost the USD/JPY.

For a look at all of today’s economic events, check out our economic calendar.

Trading Currencies: The Return of Janet Yellen

The return of the former Fed Chair Janet Yellen to the forefront of US policy; this time on the fiscal side it’s one that the FX market will probably meet with glee.

A solid communicator and an advocator for ‘strong’ policy accommodation, Janet Yellen’s upcoming appointment to Treasury Secretary will likely mean that Joe Biden’s fiscal stimulus package will be one of mammoth proportions – and a potential short-term negative for the USD.

To highlight this point, here are some extracts from her speech that she gave about her upcoming appointment.

“We lawmakers need to ‘act big’ on the next coronavirus relief package,” she complimented by adding that the benefits of the package will well and truly outweigh the costs of a higher debt burden.

“As Treasury chief my role will be to assist in the rebuilding of economy so that it creates more prosperity for more people and ensures that American workers can compete in an increasingly competitive global economy.”

“Right now, short term, I feel that we can afford what it takes to get the economy back on its feet, to get us through the pandemic.” As rates are historically low and that debt-servicing payments as a share of the economy are lower today than before the 2008 financial crisis.

These are big statements and the ones that support the trade we have seen throughout 2020. A tidal wave of USD is likely to hit the markets in the foreseeable future.

Future of the USD trend

Her comments also back what the Federal Reserve has stated – that it will back the economy with quantitative easing and record low rates until inflation averages 2% – something that is at least 2 years off. Having US fiscal and monetary policy aligned will create some form of inflation in the future that is the intended goal and that the rates will therefore rise.

Ms Yellen’s statement coupled with last week’s statements from Fed officials show that rates for the foreseeable future will remain incredibly low.

This was seen in the movement of US treasury with US 10-year yield falling from 1.12% to 1.09% on Yellen’s remarks and have continued to fall.

Time to go ‘risk-on’?

The flip side of this is the acceleration of the risk trade with textbook moves in CHF, JPY and USD easing while the like of EUR, GBP and AUD shifting higher.

EUR/USD is now back above $1.21 at $1.2145, the GBP/USD is back above $1.36 at $1.3630 while AUD/USD is now above $0.77.

Key Events to Watch in the Coming Week

  • Fed’s Monetary Policy Statement – January 28, 2021 (GMT +11)
  • USA’s Gross Domestic Product Annualized (Q4) – January 29, 2021 (GMT + 11)

This article is prepared by Lucia Han from Mitrade and is for reference only. We do not represent that the material provided here is accurate, current or complete. The article content neither takes into account your personal investment objects nor your financial situation, and therefore it should not be relied upon as such. You should seek for your own advice.

BTC/USD Breaks below Support and 35,000, ETH/USD Breaks down to 1,260 but Makes It Back above 1,325

BTC/USD

With the falling continuing, the price broke down below the local support level at 33,937between 09:00 and 10:00 UTC.

At 11:00 UTC, the pair slowed down the face of its downward price action and started finding support at around 33,450. From 12:00 to 18:00 UTC, the pair was mainly contained between 33,450 and a local technical level at 33,937, with a brief dip below 33,500 taking place between 16:00 and 17:00 UTC. But some measure of resistance was found at 33,450 between 11:00 and 17:00 UTC did not let the price break it down. At 17:00 UTC, BTC/USD attempted an upturn above the resistance level and was able to do it in the hour between 18:00 and 19:00 UTC.

The exit outside the symmetrical triangle increases the chances of further downside dynamics for BTC/USD in the near future. It means that the 2.618 Fibonacci retracement level will be the next target level for the pair. There is a local support level at 33,817, but it should not pose a serious obstacle for BTC/USD on its way to 31,000.

ETH/USD

ETH/USD opened 20th January at 1,367.9 as per the exchange rate on CEX.IO. The overall dynamics were quite reminiscent of those of BTC/USD. The trading pair took a bounce to 1,405 in the first hour of the day and dropped to 1,343 between 03:00 and 04:00 UTC. Some certain sideways trading was taking place between 04:00 and 09:00 UTC.

Between 09:00 and 10:00 UTC, ETH/USD once again dropped handsomely to 1,300. The third big drop of the day took place between 11:00 and 12:00 UTC when the pair fell below 1,260 and quickly bounced off 1,240. But further falling was retraced with countertrade volumes, and the ETH/USD cross rate continued trading mainly between 1,260 and 1,310 for the most part of the time between 12:00 and 18:00 UTC.

A break back above the 4.326 Fibonacci retracement level occurred between 19:00 and 20:00 UTC, with the price suddenly rising 1,350. ETH/USD continued trading above 1,325 until 21:00 UTC.

The ETH/USD took a substantial downswing to 1,260 but the late retracement above 1,350 fairly nullified those downside efforts, showing a continuing bullish sentiment in ETH/USD. ETH/USD remains under temporary selling pressure, but the uptrend on the 4-hour timeframe remains unbroken with new lows going consistently above the previous ones. Therefore, the closest target for ETH/USD is an upside one at 1,430.

Konstantin Anissimov, Executive Director at CEX.IO

Gold Bugs Affirm their Grip; US 10-yr Treasury Yields Pose a Threat

Gold prices, at the time this report was drafted, traded around the $1,870 per ounce price level having gained 1.7% on Wednesday.

That was the biggest single-day percentage gain sighted in the precious metal’s market in two weeks.

In the past few days, gold bugs held their grip on the precious market, as the dollar recorded significant losses in its value for about three straight trading sessions. Gold bears seem to have lost their nerves in facing Janet Yellen’s, expansive approach to fiscal policy.

Although the, US 10-yr Treasury yields were looking unchanged, news that the new U.S Secretary for Treasury will “go big” on pushing for more stimulus programs, excited gold traders in taking long positions arbitrarily.

Having announced a $1.9 trillion stimulus package plan a few days back, the new U.S President’s economic team is now strategizing on how to support two interrelated issues, which include the environment and infrastructure.

Such agenda listed above are expected to boost spending and create jobs in the world’s biggest economy coupled with increasing more liquidity in financial markets, which could see gold prices breaking the $1,900 price levels once again.

Also with the U.S Central bank and U.S Treasury going dovish, it provides an incredible support for gold bugs to remain relevant at the bullion market at least for the mid-term.

That said, futuristic gains in the precious metal could however remain elusive if the US Treasury yields rally high, putting a bid under the US dollar, the yellow metal’s biggest enemy.

For a look at all of today’s economic events, check out our economic calendar.

There’s a New Sheriff in Town

Market participants and investors are under the assumption that this new administration will aggressively continue to propose fiscal stimulus aid.

Before his inauguration, President-elect Joe Biden revealed his stimulus proposal which will add another $1.9 trillion to the national debt. The proposed relief package will concentrate on the immediate needs of the nation. In an evening speech in Wilmington Delaware, President Biden said, “Unity is not some pie-in-the-sky dream. It’s a practical step to get any of the things we have to get done as a country, get done together,”.

More importantly, this is only the first step to a much larger recovery package that will follow. The new administration will begin its term with more than one crisis stemming from the global pandemic. Healthcare and distribution of the vaccines will be first and foremost as the president will allocate a large portion of the $2 trillion expenditure to focus upon testing, production, and delivery of vaccines. The remainder of the funds from the “American rescue plan” will provide direct aid to Americans, communities, and businesses which have been directly impacted by the pandemic.

Today’s solid move in both gold and silver, as well as U.S. equities, is based upon the expectations that President Biden will announce additional fiscal stimulus actions which will be announced and detailed as one of his first acts as president of the United States.

Concurrently the Chairman of the Federal Reserve, Jerome Powell has pledged to maintain an extremely accommodative monetary policy with interest rates near zero at least through the end of 2022 and simultaneously continue to purchase $120 billion monthly adding to their assets. These purchases will be primarily mortgage-backed securities, corporate bonds, and U.S. treasuries.

There are also high expectations that the new head of the United States Treasury Department Janet Yellen will continue to allocate additional trillions of dollars in fiscal stimulus. Janet Yellen is on record saying that the United States should “act big” on the economy. Since the beginning of the pandemic, the U.S. government has allocated almost $6 trillion for fiscal aid.

It is the massive expenditures by central banks globally in unison with the United States Federal Reserve and Treasury Department that will provide the underlying support which will weaken the dollar, and take gold and silver prices higher. The European Central Bank will hold a policy meeting this week with the goal of keeping the accommodative monetary policy in place.

Gold

As of 5 PM EST, February 2021 Comex gold futures are up by $31.10 (1.70%) and fixed at $1871.50. March Silver futures gained approximately $0.60 (+2.33%) and is fixed at $25.91.

Silver

As far as the expenditures that have totaled approximately $4 trillion for aid goes according to President Biden, he believes that this allocation of capital is unfinished business and said that “I know what I just described will not come cheaply. But failure to do so will cost us dearly.”

Clearly there is a new sheriff in town, one who promises to provide the American public and businesses with the needed capital to stay afloat. As such we expect that our national debt to reach new record levels.

For more information on our service simply use this link.

Wishing you as always, good trading and good health,

Gary S. Wagner

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Daily Forecast – Australian Dollar Remains Strong

AUD/USD Video 21.01.21.

Australian Dollar Moves Higher Against U.S. Dollar

AUD/USD is currently trying to settle above the resistance at 0.7760 while the U.S. dollar remains under pressure against a broad basket of currencies.

The U.S. Dollar Index has managed to get below the support at the 20 EMA at 90.35 and is trying to develop additional downside momentum. If this attempt is successful, the U.S. Dollar Index will move closer to the 90 level which will be bullish for AUD/USD.

Australia has recently reported that Unemployment Rate declined from 6.8% in November to 6.6% in December. Analysts expected that Unemployment Rate would decline to 6.7%. Meanwhile, Employment Change report indicated that employment increased by 50,000 in December, in line with analyst forecasts.

Today, foreign exchange market traders will also focus on the employment data from the U.S. Initial Jobless Claims report is expected to show that 910,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are expected to increase from 5.3 million to 5.4 million.

Joe Biden’s stimulus plan has recently provided material support to commodity-related currencies, including Australian dollar. If traders continue to focus on the upcoming stimulus, Australian dollar may get additional support.

Technical Analysis

aud usd january 21 2021

AUD/USD managed to settle above the resistance at 0.7740 and is trying to settle above the next resistance level at 0.7760. RSI remains in the moderate territory so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If AUD/USD settles above 0.7760, it will get to another test of the next resistance level at 0.7780. A move above this level will push AUD/USD towards the resistance at 0.7800. In case AUD/USD gets above the resistance at 0.7800, it will move towards the next resistance level which is located at January highs at 0.7820.

On the support side, the previous resistance at 0.7740 will likely serve as the first support level for AUD/USD. A move below this level will push AUD/USD towards the support at 0.7725. If AUD/USD declines below 0.7725, it will move towards the 20 EMA at 0.7705.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – U.S. Dollar Is Losing Ground Against Euro

EUR/USD Video 21.01.21.

Euro Gains Some Ground Against U.S. Dollar

EUR/USD is currently trying to get back above the resistance at 1.2130 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index declined below the support at the 20 EMA at 90.35 and is slowly moving towards the 90 level. If the U.S. Dollar Index gets to the test of this level, EUR/USD will get additional support.

Yesterday, EU reported that Euro Area Inflation Rate decreased by 0.3% year-over-year in December while Core Inflation Rate grew by 0.2%. Both reports were in line with analyst expectations.

Prices remain weak in the Euro Area due to the negative impact of the strong second wave of coronavirus. It looks like Europe’s significant problems on the virus front put some pressure on the euro in recent weeks.

Today, foreign exchange market traders will focus on the European Central Bank Interest Rate Decision and the subsequent commentary. The rate is expected to stay unchanged, and traders will pay attention to ECB evaluation of the current economic situation.

Technical Analysis

eur usd january 21 2021

Yesterday, EUR/USD made an attempt to settle above the resistance at 1.2155 but failed to develop sufficient upside momentum and pulled back. However, EUR/USD received strong support near 1.2080 and is trying to settle back above the resistance at 1.2130.

If this attempt is successful, EUR/USD will get to another test of the next resistance level which is located at the 20 EMA at 1.2155. A move above this level will open the way to the test of the resistance at 1.2175. In case EUR/USD settles above 1.2175, it will head towards the next resistance at 1.2220.

On the support side, the nearest material support level for EUR/USD is located at the 50 EMA at 1.2115. If EUR/USD manages to settle below this level, it will head towards the next support at 1.2080. A successful test of this level will push EUR/USD towards the next support level which is located at 1.2060.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – Test Of Resistance At 1.3710

GBP/USD Video 21.01.21.

British Pound Continues To Gain Ground Against U.S. Dollar

GBP/USD is trying to settle above the resistance at 1.3710 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to get below the 20 EMA at 90.35 and is moving towards the 90 level as foreign exchange market traders focus on Biden’s stimulus plans. If the U.S. Dollar Index manages to get to the test of the 90 level, GBP/USD will get additional support.

Yesterday, UK reported that Inflation Rate increased by 0.3% month-over-month in December compared to analyst consensus which called for growth of 0.2%. On a year-over-year basis, Inflation Rate grew by 0.6%. Meanwhile, Core Inflation Rate increased by 1.4% compared to analyst consensus of 1.3%.

At this point, it is too early to tell whether inflation is moving higher in the UK. The country continues its battle against a new, more infectious strain of the virus, and the recent data suggests that UK made little progress on this front. Most likely, UK will have to keep current virus containment measures in place for more weeks than originally planned which may have a negative impact on consumer optimism and put pressure on prices.

Technical Analysis

gbp usd january 21 2021

GBP/USD is currently testing the nearest resistance level at 1.3710. Yesterday, GBP/USD made an attempt to settle above this level but failed to develop sufficient upside momentum. However, the current momentum looks strong, and GBP/USD has good chances to get above 1.3710.

If GBP/USD manages to settle above the resistance at 1.3710, it will head towards the next resistance level at 1.3755. A move above the resistance at 1.3755 will push GBP/USD towards the next resistance at 1.3785.

On the support side, the previous resistance level at 1.3665 will likely serve as the first support level for GBP/USD. If GBP/USD declines below this level, it will move towards the next support at 1.3625. A successful test of this support level will open the way to the test of the next support which is located at the 20 EMA at 1.3600.

For a look at all of today’s economic events, check out our economic calendar.

United Airlines Shares Slump on Deep Quarterly Loss; Lost $7.1 Billion in 2020

United Airlines reported worse-than-expected earnings in the fourth quarter with net loss ballooning to $1.9 billion and to $7.1 billion for the full-year 2020 as the COVID-19 pandemic restrictions hammered air travel demand, sending its shares down about 3% in extended trading on Wednesday.

Chicago, Illinois-based airline reported fourth-quarter adjusted net loss of $2.1 billion, or a loss of $7 per share. That missed Wall Street’s estimates for a loss of $6.56 per share. The airlines’ reported loss of $7.7 billion for the full-year 2020 and total operating revenue declined 69% to $3.4 billion from the same quarter in 2019.

“Domestic remained the relative source of strength for the airline, as revenues fell 72% compared to international down 83%. The one source of relative strength on the international side was Latin America, which saw revenues decline by just 65% y-o-y as leisure demand to the region has remained strong. Cargo revenue was another source of strength, increasing 77% y-o-y, with other operating revenue declining by 31% y-o-y,” wrote Sheila Kahyaoglu, equity analyst at Jefferies.

The airline which operates a large domestic and international route network spanning cities large and small across the United States and all six continents said over the last three quarters, the company has identified $1.4 billion of annual cost savings and has a path to achieve at least $2.0 billion in structural reductions moving forward.

United Airlines forecasts the first quarter 2021 total operating revenue to be down 65-70% versus the first quarter of 2019. Accelerated distribution of the COVID-19 vaccine may lead to faster improvement, however, the company is not including this potential improvement in its first-quarter 2021 revenue outlook. The airline forecast first-quarter 2021 capacity to be down at least 51%.

United Airlines shares slumped about 3% to $43.97 in extended trading on Wednesday; the stock plunged 50% in 2020.

Analyst Comments

“United reported 4Q20 adjusted EPS slightly below our and Street expectations. Near term revenue trends are slightly worse than expected, but likely not a major focus for investors. Management targeted +$2 Bn in annual costs savings that should allow them to exceed2019 EBITDA margins by 2023. Many will look for comments on summer bookings as a snapback in 2H21 travel is expected,” said Helane Becker, equity analyst at Cowen and company.

“Trading activity will likely hinge on management comments about summer bookings and if they’ve seen any increased activity to support the idea of pent-up demand. The idea of a strong 2H21 will be dictated by vaccine distribution, something the Biden administration should push aggressively early in his administration.”

United Airlines Stock Price Forecast

Thirteen analysts who offered stock ratings for United Airlines in the last three months forecast the average price in 12 months at $48.91 with a high forecast of $62.00 and a low forecast of $32.00.

The average price target represents an 8.26% increase from the last price of $45.18. From those 13 analysts, four rated “Buy”, five rated “Hold” and four rated “Sell”, according to Tipranks.

Morgan Stanley gave a base target price of $37 with a high of $79 under a bull scenario and $21 under the worst-case scenario. The firm currently has an “Underweight” rating on the airline holding company’s stock.

“Why Underweight? We believe United Airlines (UAL) has the most challenged network of any airline in our coverage based on our path for a COVID-19 recovery and a levered balance sheet, which could limit rebound opportunities. In addition, UAL’s new CEO Scott Kirby (former COO) is very well regarded by investors but investors may wait to see evidence that UAL is indeed focused on cost improvement rather than aggressive growth (at the cost of PRASM) before giving the stock credit,” said Ravi Shanker, equity analyst at Morgan Stanley.

Several other analysts have also recently commented on the stock. Stifel raised the target price to $47 from $33. Cowen and company upped to outperform from market perform, raising the price objective to $53 from $34. BNP Paribas issued an “underperform” rating and a $32 target price for the company. Citigroup reduced their price target to $43 from $47 and set a “buy” rating.

In addition, Zacks Investment Research downgraded to a “sell” rating from a “hold” and set a $38 price target. Jefferies Financial Group issued a “hold” rating and a $45 price target. At last, Exane BNP Paribas issued an “underperform” rating and a $32 price target for the company.

Check out FX Empire’s earnings calendar

EOS, Stellar’s Lumen, and Tron’s TRX – Daily Analysis – January 21st, 2021

EOS

EOS fell by 0.20% on Wednesday. Following on from a 1.02% decline on Tuesday, EOS ended the day at $2.7830.

A mixed start to the day saw EOS rise to an early morning intraday high $2.8350 before hitting reverse.

Falling short of the first major resistance level at $2.9461, EOS slid to a late afternoon intraday low $2.6319.

EOS fell through the first major support level at $2.6436 before revisiting $2.80 levels.

A bearish end to the day, however, saw EOS fall back to sub-$2.788 levels and into the red.

At the time of writing, EOS was down by 1.11% to $2.7522. A mixed start to the day saw EOS rise to an early morning high $2.7891 before falling to a low $2.7451.

EOS left the major support and resistance levels untested early on.

EOSUSD 210121 Daily Chart

For the day ahead

EOS would need to avoid a fall back through the $2.7500 pivot level to support a run at the first major resistance level at $2.8680.

Support from the broader market would be needed, however, for EOS to break out from Wednesday’s high $2.8350.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

In the event of an extended rally, EOS could test resistance at $3.00 before any pullback. The second major resistance level sits at $2.9531.

Failure to avoid a fall back through the pivot level at $2.7500 would bring the first major support level at $2.6649 into play.

Barring an extended sell-off, however, EOS should steer of sub-$2.60 levels. The second major support level sits at $2.5469.

Looking at the Technical Indicators

First Major Support Level: $2.6649

First Major resistance Level: $2.8680

23.6% FIB Retracement Level: $6.52

38% FIB Retracement Level: $9.68

62% FIB Retracement Level: $14.77

Stellar’s Lumen

Stellar’s Lumen fell by 1.44% on Wednesday. Following on from a 2.20% decline on Tuesday, Stellar’s Lumen ended the day at $0.2938.

A mixed start to the day saw Stellar’s Lumen rise to an early morning intraday high $0.3019 before hitting reverse.

Falling short of the first major resistance level at $0.3141, Stellar’s Lumen slid to a late afternoon intraday low $0.2750.

The reversal saw Stellar’s Lumen fall through the first major support level at $0.2879 and the 38.2% FIB of $0.2823.

Finding support at the second major support level at $0.2776, Stellar’s Lumen revisited $0.295 levels before easing back.

The partial recovery saw Stellar’s Lumen break back through the 38.2% FIB and the first major support level to end the day at $0.293 levels.

At the time of writing, Stellar’s Lumen was down by 1.01% to $0.2908. A mixed start to the day saw Stellar’s Lumen rise to an early morning high $0.2947 before falling to a low $0.2904.

Stellar’s Lumen left the major support and resistance levels untested early on.

XLMUSD 210121 Daily Chart

For the day ahead

Stellar’s Lumen would need to avoid a fall through the $0.2902 pivot to bring the first major resistance level at $0.3055 into play.

Support from the broader market would be needed, however, for Stellar’s Lumen to break back through to $0.30 levels.

Barring an extended crypto rally, the first major resistance level and Wednesday’s high $0.3019 would likely cap any upside.

In the event of an extended rally, Stellar’s Lumen could test the second major resistance level at $0.3171.

Failure to avoid a fall through the $0.2902 pivot would bring the 38.2% FIB of $0.2823 and the first major support level at $0.2786 into play.

Barring another extended crypto sell-off, however, Stellar’s Lumen should steer clear of sub-$0.027 levels. The second major support level sits at $0.2633.

Looking at the Technical Indicators

First Major Support Level: $0.2786

First Major Resistance Level: $0.3055

23.6% FIB Retracement Level: $0.3187

38% FIB Retracement Level: $0.2823

62% FIB Retracement Level: $0.1850

Tron’s TRX

Tron’s TRX fell by 2.24% on Wednesday. Following on from a 3.17% slide on Tuesday, Tron’s TRX ended the day at $0.03017.

A mixed start to the day saw Tron’s TRX rise to an early morning intraday high $0.03143 before hitting reverse.

Falling short of the first major resistance level at $0.03229, Tron’s TRX slid to a late afternoon intraday low $0.02872.

Tron’s TRX fell through the first major support level at $0.02989 and the second major support level at $0.02889.

More significantly, Tron’s TRX also fell through the 23.6% FIB of $0.0291 before revisiting $0.031 levels in the final hour.

A bearish end to the day, however, saw Tron’s TRX fall back to sub-$0.031 levels and into the red.

In spite of the late pullback, Tron’s TRX avoided a fall back through the first major support level and the 23.6% FIB.

At the time of writing, Tron’s TRX was down by 0.86% to $0.03044. A mixed start to the day saw rise to an early morning high $0.03099 before falling to a low $0.02990.

Tron’s TRX left the major support and resistance levels untested early on.

TRXUSD 210121 Daily Chart

For the Day Ahead

Tron’s TRX need to avoid a back fall through the $0.0.03011 pivot to bring the first major resistance level at $0.03149 into play.

Support from the broader market would be needed, however, for Tron’s TRX to breakout from Wednesday’s high $0.03143.

Barring an extended crypto rally, the first major resistance level and resistance at $0.032 would likely cap any upside.

In the event of an extended rally Tron’s TRX could resistance at $0.033 before any pullback. The second major resistance level sits at $0.03282.

Failure to avoid a fall back through the $0.03011 pivot would bring the 23.6% FIB of $0.0291 and the first major support level at $0.2878 into play.

Barring another extended sell-off on the day, Tron’s TRX should steer clear of sub-$0.028 levels. The second major support level at sits at $0.02740.

Looking at the Technical Indicators

First Major Support Level: $0.02878

First Major Resistance Level: $0.03149

23.6% FIB Retracement Level: $0.03211

38.2% FIB Retracement Level: $0.0428

62% FIB Retracement Level: $0.0648

Please let us know what you think in the comments below

Thanks, Bob

Ethereum, Litecoin, and Ripple’s XRP – Daily Tech Analysis – January 21st, 2021

Ethereum

Ethereum rose by 0.67% on Wednesday. Following an 8.70% rally from Tuesday, Ethereum ended the day at $1,376.88.

A mixed start to the day saw Ethereum rise to an early morning intraday high $1,408.50 before hitting reverse.

Falling well short of the first major resistance level at $1,455, Ethereum slid to a mid-day intraday low $1,234.01.

Ethereum fell through the first major support level at $1,267 before a late recovery to $1,376 levels.

At the time of writing, Ethereum was down by 0.36% to $1,371.99. A mixed start to the day saw Ethereum rise to an early morning high $1,390.00 before falling to a low $1,364.08.

Ethereum left the major support and resistance levels untested early on.

ETHUSD 210121 Hourly Chart

For the day ahead

Ethereum would need to avoid a fall through the pivot level at $1,340 to support a run at the first major resistance level at $1,446.

Support from the broader market would be needed, however, for Ethereum to break out from Wednesday’s high $1,408.50.

Barring an extended crypto rally, Wednesday’s high and the first major resistance level would likely cap any upside.

In the event of another extended crypto rally, Ethereum could test resistance at $1,600 before any pullback. The second major resistance level sits at $1,514.

Failure to avoid a fall through the $1,340 pivot would bring the first major support level at $1,271 into play.

Barring another extended sell-off, however, Ethereum should continue to steer clear of sub-$1,200 levels. The second major support level sits at $1,165.

Looking at the Technical Indicators

First Major Support Level: $1,271

Pivot Level: $1,340

First Major Resistance Level: $1,446

23.6% FIB Retracement Level: $1,119

38.2% FIB Retracement Level: $921

62% FIB Retracement Level: $600

Litecoin

Litecoin fell by 1.40% on Wednesday. Reversing a 0.06% decline from Tuesday, Litecoin ended the day at $149.77.

A mixed start to the day saw Litecoin rise to an early morning intraday high $156.30 before hitting reverse.

Falling short of the first major resistance level at $162.02, Litecoin slid to a late afternoon intraday low $138.53.

Litecoin fell through the first major support level at $145.98 and the second major support level at $140.05.

More significantly, Litecoin also fell through the 23.6% FIB of $148 before finding support.

Steering clear of sub-$130 levels, Litecoin revisited $150 levels late in the day before easing back.

The partial recovery saw Litecoin break back through the major support levels and the 23.6% FIB of $148.

At the time of writing, Litecoin was down by 0.43% to $149.12. A mixed start to the day saw Litecoin rise to an early morning high $150.35 before falling to a low $148.61.

Litecoin left the major support and resistance levels untested early on.

LTCUSD 210121 Hourly Chart

For the day ahead

Litecoin would need to avoid a fall through the $148.20 pivot level and the 23.6% FIB of $148 to support a run at the first major resistance level at $157.87.

Support from the broader market would be needed, however, for Litecoin to break out from $155 levels.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

In the event of an extended breakout, Litecoin could test resistance at $170. The second major resistance level sits at $165.97.

Failure to avoid a fall through the $148.20 pivot level and the 23.6% FIB of $148 would bring the first major support level at $140.10 into play.

Barring another extended sell-off, Litecoin should steer clear of the second major support level at $130.43.

Looking at the Technical Indicators

First Major Support Level: $140.10

Pivot Level: $148.20

First Major Resistance Level: $157.87

23.6% FIB Retracement Level: $148

38.2% FIB Retracement Level: $125

62% FIB Retracement Level: $87

Ripple’s XRP

Ripple’s XRP rose by 0.40% on Wednesday. Following a 2.87% gain from Tuesday, Ripple’s XRP ended the day at $0.29534.

A mixed start to the day saw Ripple’s XRP fall to an early morning low $0.28235 before making a move.

Steering clear of the major support levels, Ripple’s XRP jumped to a mid-morning intraday high $0.31200.

Falling well short of the first major resistance level at $0.3212, Ripple’s XRP slid to a late morning intraday low $0.28021.

Steering clear of the first major support level at $0.2757, Ripple’s XRP moved back through to $0.295 levels and into the green.

At the time of writing, Ripple’s XRP up by 0.09% to $0.29560. A mixed start to the day saw Ripple’s XRP rise to an early morning high $0.29715 before falling to a low $0.29499.

Ripple’s XRP left the major support and resistance levels untested early on.

XRPUSD 210121 Hourly Chart

For the day ahead

Ripple’s XRP will need to avoid a fall back through the $0.2959 pivot level to bring the first major resistance level at $0.3115 into play.

Support from the broader market would be needed, however, for Ripple’s XRP to break back through to $0.30 levels.

Barring an extended crypto rally, the first major resistance and Wednesday’s high $0.31200 would likely cap any upside.

In the event of another extended rally, Ripple’s XRP could test resistance at $0.33 levels. The second major resistance sits at $0.3276. Ripple’s XRP would need support to breakout from the 23.6% FIB of $0.3172, however.

Failure to move through the $0.2959 pivot would bring the first major support level at $0.2797 into play.

Barring another extended crypto sell-off, Ripple’s XRP should steer clear of sub-$0.27 levels. The second major support level sits at $0.2641.

Looking at the Technical Indicators

First Major Support Level: $0.2797

Pivot Level: $0.2959

First Major Resistance Level: $0.3115

23.6% FIB Retracement Level: $0.6274

38.2% FIB Retracement Level: $0.5285

62% FIB Retracement Level: $0.3687

Please let us know what you think in the comments below.

Thanks, Bob

European Equities: Economic Data from the Eurozone and the U.S and the ECB in Focus

Economic Calendar:

Thursday, 21st January

ECB Interest Rate Decision (Jan)

ECB Press Conference

Eurozone Consumer Confidence (Jan) Prelim

Friday, 22nd January

French Manufacturing PMI (Jan) Prelim

French Services PMI (Jan) Prelim

German Manufacturing PMI (Jan) Prelim

German Services PMI (Jan) Prelim

Eurozone Manufacturing PMI (Jan) Prelim

Eurozone Markit Composite PMI (Jan) Prelim

Eurozone Services PMI (Jan) Prelim

The Majors

It was a bullish day for the European majors on Wednesday, with the DAX30 rising by 0.77% to lead the way. The EuroStoxx600 and CAC40 ended the day with gains of 0.72% and 0.53% respectively.

Economic data was on the lighter side, leaving the majors in the hands of corporate earnings and Inauguration Day.

With Joe Biden sworn in as U.S President, the markets are expecting plenty of fiscal stimulus to drive a U.S economic recovery.

Coupled with a planned drive to ramp up vaccination rates, the markets bet on a more rapid economic recovery.

Demand for riskier assets was broad-based as a result, also leading to a pullback in the U.S Dollar.

The Stats

It was a busier day on the economic calendar. Economic data included finalized inflation figures for the Eurozone and wholesale inflation figures from Germany.

In December, Germany’s producer price index rose by 0.8%, month-on-month, following a 0.2% increase in November. Economists had forecast a 0.7% rise.

According to Destatis,

  • The producer prices of industrial products were 0.2% higher in December 2020 than in December 2019.
  • Energy prices, however, were on average 0.1% lower than in December 2019.
  • Excluding energy, producer prices were 0.3% higher than in December 2019.

For the Eurozone, consumer prices rose by 0.3% in December, reversing a 0.3% decline from November.

While the annual core rate of inflation held steady at 0.2%, consumer prices fell by a further 0.3%, year-on-year, in December.

According to Eurostat,

  • Annual inflation was stable at -0.3% for a 4th consecutive month in December.
  • A year earlier, the annual rate of inflation had stood at 1.3%.
  • Greece (-2.4%), Slovenia (-1.2%), and Ireland (-1.0%) registered the lowest annual rates.
  • The highest contribution to the annual euro areas inflation came from services (+0.30 percentage points).
  • Food, alcohol & tobacco contributed +0.25 pp.

From the U.S

There was no economic data from the U.S to provide the European majors with direction late in the session.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Wednesday. Daimler rallied by 3.51%, with BMW and Volkswagen ending the day up by 3.01% and by 3.13% respectively. Continental rose by a more modest 1.82% on the day.

Daimler led the way mid-week as the markets responded to the unveiling of  the latest Mercedes-Benz’s electric compact SUV.

It was a mixed day for the banks, however. Deutsche Bank fell by 0.99%, while Commerzbank rose by 0.93%.

From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen gained 0.70% and 0.59% respectively, with Credit Agricole rising by 1.54%.

It was a mixed day for the French auto sector. Peugeot ended the day flat, while Renault gained 1.86% on the day.

Air France-KLM bucked the general trend, falling by 0.86%, while Airbus SE ended the day up by 1.22%.

On the VIX Index

It was a 2nd consecutive day in the red for the VIX on Wednesday, marking the 8th daily loss of the year. Following a 4.52% fall on Tuesday, the VIX slid by 7.14% to end the day at 21.58.

The NASDAQ and the S&P500 rallied by 1.97% and by 1.39% respectively, with the Dow gaining by 0.83%.

A lack of economic data left the markets in the hands of corporate earnings and hopes of sizeable fiscal support from the new U.S administration.

Fresh record highs came as President Joe Biden was sworn in as the 46th U.S President.

On the corporate earnings front, Netflix was a front runner off the back of its earnings release, surging by 16.85%.

VIX 210121 Daily Chart

The Day Ahead

It’s a quiet day ahead on the economic calendar. Eurozone consumer confidence figures are due out late in the session to provide the European majors with direction.

Ahead of the stats, the ECB is in action this afternoon. With the markets expecting the ECB to stand pat on policy, the press conference will be the key driver.

From the U.S, the weekly jobless claims figures will also influence, though expect a delayed response with the release coinciding with the ECB press conference.

Away from the economic calendar, COVID-19 news, together with updates from Capitol Hill will also influence.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 18.5 points.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Forex Technical Analysis – Trend Changes to Down on Trade Through 1.2054

The Euro moved lower against the U.S. Dollar on Wednesday as the risk of extended lockdowns in Europe to combat the spread of COVID-19 and worries about the pace the rollout of vaccines weighed on the common currency.

European countries are struggling to contain the contagion of the coronavirus amid worries that a new variant of the virus could lead to more stringent lockdowns and more economic pain.

At 21:30 GMT, the EUR/USD is trading 1.2107, down 0.0022 or -0.18%.

The move is taking place ahead of Thursday’s European Central Bank meeting, which, after the broad easing of monetary policy last month, is unlikely to produce any major change.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.2054 will change the main trend to down. A move through 1.2349 will signal a resumption of the uptrend.

The main range is 1.1800 to 1.2349. Its 50% level at 1.2074 provided support on Tuesday and Wednesday. It is controlling the near-term direction of the EUR/USD.

The short-term range is 1.2349 to 1.2054. Its retracement zone at 1.2202 to 1.2236 is the primary upside target. Sellers could come in on a test of this level. They will be trying to form a secondary lower top.

Short-Term Outlook

The price action on Monday through Wednesday indicates the direction of the EUR/USD the rest of the week will likely be determined by trader reaction to 1.2074.

Bullish Scenario

A sustained move over 1.2074 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible surge into 1.2202 to 1.2236 over the short-run.

Bearish Scenario

A sustained move under 1.2074 will signal the presence of sellers. Taking out 1.2054 will change the main trend to down. This move could trigger a further break into 1.2025. This price is a potential trigger point for an acceleration to the downside with the next major target the November 23 main bottom at 1.1800.

For a look at all of today’s economic events, check out our economic calendar.

US Stock Market Overview – Stock Rally as Biden is Inaugurated

U.S. stocks rallied on Wednesday as Joe Biden was sworn in as the 46th U.S. President. Former President Donald Trump left the White House in the morning and did not attend President Biden’s inauguration. Most sectors in the S&P 500 index were higher, led by Communication and Real-Estate, Energy bucked the trend. Morgan Stanley reported better than expected earnings ahead of the bell driven by gains in trading. Last night after the closing bell, Netflix reported stellar earnings, which lifted its shares by 17.5%. Solid gains in other large cap tech shares helped lift the Nasdaq by more than 2%.

Biden Signs Executive Orders

Joe Biden will unwind several of the Trump executive orders on his first day in office. This will include implementing a national mask mandate on federal property, revoking a permit for the Keystone XL oil pipeline and reversing a travel ban from several Muslim and African countries.

Morgan Stanely reports Better than Expected Results

Morgan Stanely reported better than expected top line and bottom-line financial results. The company announced profits of $3.39 billion, or $1.81 a share. Revenue increased 26% to $13.64 billion. Both beat the consensus estimates of $1.30 on revenue of $11.58 billion. Trading revenue at Morgan Stanley rose 32% to $4.22 billion, a bigger jump than any other bank. Investment-banking fees increased 46% to $2.30 billion mostly due to $1 billion in revenue Morgan Stanley generated for underwriting initial public offerings and other stock offerings.

Yellen Takes Agreeable Tone

During here meeting for confirmation to the Treasury Secretary, Janet Yellen agree with all of her questioners but pushed back on fiscal policy, saying there was a need for another large fiscal package.  The fiscal support is shaping up to be a key test for the Biden administration.

Natural Gas Price Prediction – Prices Rebound but Momentum has Turned Negative

 

Natural gas prices were nearly unchanged on Wednesday after testing lower levels early in the trading session. According to the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal throughout the mid-west for the next 6-10 and 8-14 days. Supply fell in the latest week due to declines in dry natural gas production.

Technical Analysis

Natural gas prices rebounded from session lows and closing the session nearly unchanged. Resistance is seen near the 10-day moving average at 2.69. Support is seen near the December lows at 2.26. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line. Short-term omentum has also turned negative as the fast stochastic generated a crossover sell signal.

Supply Declined

Supply fell because of declines in dry natural gas production. According to data from the EIA, the average total supply of natural gas fell by 0.8% compared with the previous report week. Dry natural gas production decreased by 0.9% compared with the previous report week. Average net imports from Canada increased by 2.0% from last week.

Gold Price Prediction – Prices Rise in Tight Range as Momentum Turns Positive

 

Gold prices moved higher on Wednesday, as the dollar consolidated and U.S. yields remained stable. Gold volatility is also trading sideways, hovering near the 23% range. On Wednesday, the U.S. inaugurated a new President. Riskier assets moved higher, which helped buoy gold prices. Additionally, the commentary from likely Treasury secretary Janet Yellen shows that stimulus will be added and weigh on the dollar.

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Technical analysis

Gold prices rallied on Wednesday bouncing from an upward sloping trend line that comes in near 1,825. Resistance is seen near an upward sloping trend line that comes in near 1,939. While the trend is more of a consolidating, the 10-day moving average crossed below the 50-day moving average which means that a short-term downtrend is in place. Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 21, up from 18 and above the oversold trigger level. Medium-term negative momentum has decelerated as the MACD (moving average convergence divergence) histogram is printing in the red with a rising trajectory, which points to consolidation.

Yellen Takes Agreeable Tone

During here meeting for confirmation to the Treasury Secretary, Janet Yellen agree with all of her questioners but pushed back on fiscal policy, saying there was a need for another large fiscal package.  The fiscal support is shaping up to be a key test for the Biden administration.

Price of Gold Fundamental Daily Forecast – Start of a Rally or Knee-jerk Reaction to Biden’s Inauguration?

Gold futures are trading higher shortly after the mid-session on Wednesday as traders continued to react positively to comments from U.S. Treasury Secretary nominee Janet Yellen the previous day. Yellen essentially bolstered bets for another stimulus package under President Joe Biden that could pressure the U.S. Dollar, while driving up foreign demand for the dollar-denominated asset.

At 18:35 GMT, April Comex gold is trading $1872.30, up $28.30 or +1.53%.

Focus Shifts Toward Biden Administration

Gold traders started to form a support base last week with the release of President Joe Biden’s stimulus package proposal. Biden outlined a $1.9 trillion coronavirus relief package, saying bold investment was needed to jump-start the economy and accelerate the distribution of vaccines to bring the coronavirus under control.

Biden campaigned last year on a promise to take the pandemic more seriously than President Donald Trump, and the package aims to put that pledge into action with an influx of resources for the COVID-19 response and economic recovery.

The aid package includes $415 billion to bolster the response to the virus and the rollout of COVID-19 vaccines, some $1 trillion in direct relief to households, and roughly $440 billion for small businesses and communities particularly hard hit by the pandemic.

Biden’s plan is meant to kick off his time in office with a large bill that sets his short-term agenda into motion quickly.

Transition officials said Biden’s plan will be a rescue package that will be followed up with another recovery package in the coming weeks.

Janet Yellen, U.S. President Joe Biden’s nominee for Treasury Secretary, sparked an even bigger response from the market than Biden when she urged lawmakers on Tuesday to “act big” on coronavirus relief spending, arguing that the economic benefits far outweigh the risks of a higher debt burden.

Yellen also said that the value of the dollar should be determined by markets, a break from departing President Donald Trump’s desire for a weaker U.S. currency.

“The United States does not seek a weaker currency to gain competitive advantage and we should oppose attempts by other countries to do so,” she said.

Short-Term Outlook

The huge rally on Wednesday is impressive, but it may be just a reaction to the inauguration of President Biden.

Biden’s relief package looks bullish on paper, but it still has to be paid for and that could mean higher Treasury yields, which ultimately dictate the direction of gold prices.

The gold rally could be short-lived if Treasury yields continue rise.

For a look at all of today’s economic events, check out our economic calendar.