Market sentiment shifted towards risk on following yesterday’s news the FBI will not prosecute Hillary Clinton as US stock markets broke 9 consecutive days of falls. The S&P erased most of last week’s decline finishing at 2131 having opened 2110 as the Dow Jones surged more than 350 points in its best day since March. Final polls suggest Clinton is ahead by over 3 points as sentiment drove commodities higher with Oil, Copper, and Iron all up by over 2%. Gold fell $24 over 1.8% as risk premium faded as USD strengthened with the US Dollar Index (DXY) up 0.7%.
USD/JPY traded up 1.3% throughout NY to trade at 104.500 finding resistance at 105.000 with neutral technical setup. With the pair at a cross road the election is sure to change the dynamics and a Trump victory could see the pair begin to trade around the 97.000 mark whilst a Clinton victory would urge it up to 107.00 areas.
The Australian Dollar, boosted by strong commodity prices, climbed to 0.77255 vs USD throughout the NY session finding resistance at highs from 20th October. Strength vs GBP, EUR, and JPY have all come under pressure this early Asian session as markets are likely to flatten out on the eve of the election. AUD/NZD has rebounded strongly from Fridays strong support at 1.0450 as risk on momentum looks to squeeze shorts with initial target of 1.05750.
