Round-up
To start the new week, Asian markets have a calmer reaction to the attempted assassination of former President Donald Trump, while US futures drifted higher, as market participants assessed the overall impact to be limited. If anything, the event has further boosted the chances of Donald Trump’s re-election, as shown by online prediction market PredictIt.
The direct impact could be a firmer US dollar, as higher odds of a Trump’s presidency suggest that his inflationary policies in terms of stricter immigration, tougher trade ties and increased spending could potentially be set to pass. Safe-haven flows could be more limited, given the subdued moves around gold prices and a more calm showing in global markets. Markets may start to look beyond the incident this week, with attention refocused back on the US earnings season.
US dollar still struggling to cross back above upward trendline
The US dollar is attempting to find support from its 103.40 level, where previous reaction to this level in June this year was met with a near-term bounce. However, more assurances are still needed for the bulls, given that its daily relative strength index (RSI) has broken below the key mid-line at the start of the month, while its daily moving average convergence/divergence (MACD) has crossed into negative territory for the first time in two months. Both pointed to sellers in control for now, with bearish momentum in place.
Failure to defend its 103.40 level ahead may open the door for the US dollar to retest the 102.00 level next, where the next line of horizontal support stands. On the upside, buyers may have to reclaim the upward trendline to signal greater control.
