Investors were encouraged by an emergency authorization on Sunday by President Donald Trump to use convalescent plasma to treat Covid-19 patients. Trump was formally nominated on Monday for a second term in the White House in the Republican National Convention. The FDA determined that it is reasonable to believe that COVID-19 convalescent plasma may be effective in lessening the severity or shortening the length of COVID-19 illness in some hospitalized patients.
A Mayo Clinic–led trial that is collecting data for the National Convalescent Plasma Study of more than 35,000 patients from 2,800 hospitals who received convalescent plasma through the FDA’s expanded use program showed that people who were transfused with convalescent plasma within three days of their diagnosis had lower mortality rates after 30 days compared with those who received the plasma later, and that people transfused with plasma containing higher levels of antibodies also enjoyed lower mortality rates one month later compared with those receiving plasma with lower concentrations of antibodies.
The defensive immune cells in plasma are an attractive target not only for doctors who are desperate for anything to treat their sickest patients, but also for researchers who are eager to mine them for possible drug treatments against COVID-19. Even beyond exploring how plasma from recovered patients can be transfused into sick patients to help them, researchers are also aggressively analyzing this convalescent plasma to isolate the most potent and efficient antibodies and potentially turn them into a treatment that can not only control the disease but maybe even prevent it if given to patients at the right time after their infection.
👉 US stocks extended the rally on positive virus vaccine and treatment headlines. S&P 500 and Nasdaq closed at new record highs after adding 1% and 0.6%, with energy and financial leading the charge. Dow +1.35%. European and Asian benchmarks ended higher.
👉 EUR declined to 1.1787 ahead of the German IFO report and Q2 GDP revisions, with France, Germany and Italy recording the highest daily virus cases since April. GBP extended the losses to 1.3063.
👉 EUR/USD was broadly flat at 1.1793. Later today, the German IFO Business Climate Index (92.2 expected) and Expectations Index (98.0 expected) for August will be released. GBP/USD fell 0.2% to 1.3068. USD/JPY gained 0.2% to 105.97.
👉 AUD was steady at 0.7161 and NZD fell to 0.6526 after New Zealand extended the lockdown in Auckland. USDCAD surged above 1.32. CNH strengthened to 6.9116 alongside the China equity market (CN50). NZD/USD slipped 0.2% to 0.6525. New Zealand Prime Minister Jacinda Ardern said Auckland’s lockdown, which was re-imposed on August 12, will be extended by four days until August 30.
👉 Gold dipped to $1928.94 amid improving sentiment and the USD recovery, sitting just above the 23.6% retracement level of the March-August rally. But the long-term outlook remains supportive due to the lower for longer interest rate stance from global central banks. Silver edged lower to $26.60. WTI crude (XTIUSD) climbed above $42 as Gulf Coast oil production was heavily impacted due to the storms.
👉 Markets will focus on the Jackson Hole Symposium later this week. Keep an eye on that one.
INTRADAY MARKET INSIGHTS
Rebound continues. The pair keeps trading on the upside while being supported by the ascending 20-perod moving average. Upward momentum is also evidenced by the relative strength index, which is well directed close to 70. Upon reaching the overhead resistance at 106.05, the pair should then target 106.20 on the upside. Only a return to the key support at 105.80 would bring about a bearish reversal.
Downside prevails. The pair stays on the downside after retreating from a high of 1.1849 seen yesterday. In fact, it is capped by the descending 20-period moving average, which has crossed below the 50-period one. A break below 1.1775 would trigger a further decline toward 1.1755 on the downside. Key resistance is located at 1.1820.
Under pressure. The pair retreated and broke below both 20-period and 50-period moving averages. In addition, the 20-period moving averages crossed below the 50-period one. To conclude, unless the resistance level at 0.7180 is violated, the pair should return to 0.7150 and even to 0.7135 in extension. On the other hand, a break above 0.7180 would trigger a rebound with 0.7200 and 0.7215 as targets.
Downside prevails. The pair is under pressure below both 20-period and 50-period moving averages. The relative strength index is locating at the selling zone between 30 and 50, indicating a bearish outlook. To conclude, as long as 0.6548 is not surpassed, expect a drop with targets at 0.6499 and 0.6486 in extension. On the other hand, crossing above 0.6548 would bring a bounce with 0.6570 as a target.
Under pressure. Although the pair posted a rebound from 1.3050, it is still capped by a 50-period moving average. Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited by the resistance level at 1.3090. Therefore, as long as this key level holds on the upside, intraday bearish bias remains with down targets at 1.3050 and 1.3025 in extension. Alternatively, a break above 1.3090 would bring a bounce with 1.3115 and 1.3145 as targets.
Turning up. The pair posted a rebound from 0.9075 and crossed above both 20-period and 50-period moving averages. The relative strength index also broke above the neutrality level at 50. To conclude, as long as the support level at 0.9100 is not broken, expect a further rise with targets at 0.9135 and 0.9160 in extension. In an alternative scenario, a break below 0.9100 would trigger a drop with 0.9075 and 0.9055 as targets.
Bullish bias remains. The pair has rebounded after reaching the day-low of August 19. Currently, support is provided by the 50-period moving average, and the relative strength index stands above the neutrality level of 50, indicating a bullish bias. As long as the key support at 1.3190 holds, the pair should advance to 1.3240 and 1.3255. Alternatively, below 1.3190, expect a pull-back to 1.3165.
Target 124.33. The pair is capped by a bearish trend line drawn from August 17. In fact, it has broken below both the 20-period and 50-period moving averages, while the relative strength index has dropped to the 40s, suggesting a bearish bias. Below the key resistance at 125.22, expect a decline to 124.52 and 124.33. Alternatively, a break above 125.22 would open a path to 125.53 on the upside.
Towards 0.8982. The pair remains on the downside as it has formed a lower-high. Currently, it has dropped to levels below the 20-period moving average, which is skewing downward. The relative strength index has broken below the neutrality level of 50, signaling a bearish bias. Unless the key resistance at 0.9045 is surpassed, the pair should proceed to 0.8994 and 0.8982 on the downside. Alternatively, above 0.9045, expect a rebound to 0.9066.