Keynote:

Trudeau Wins Federal Elections

The Canadian dollar rose against a basket of G10 currencies

Gold prices follow Wednesday's Federal Open Market Committee

Technology Outlook

The Canadian dollar appreciated.

His Liberal Party is expected to have a third minority term. In Tuesday's Asian trading, the Canadian dollar rose against the US dollar, partly due to the expected victory of the Trudeau Liberal Party in the election, which assured investors that economic support would continue.

Currencies linked to commodities have also been boosted by rising commodity market prices, with crude oil continuing to speculate yesterday about a solution between a complete collapse or a Chinese government bailout. For markets worried about the spread of the epidemic, the degree of management collapse will be a focus. The coupon payment for Evergrande bonds will expire on Thursday.

The election results for commodity currencies show that current Prime Minister Justin Trudeau has gained some support as risk sensitive assets have taken a breather from yesterday's massacre. The slight increase in crude oil helped the Canadian dollar offset the previous day's decline, and the election results also increased the gains.

The technical outlook for the Canadian dollar against the US dollar is that yesterday's selling of the Canadian dollar and yen may fall below the support level of 84.96. As the market rejects to compensate for some gains, the region has proven to be even stronger. With the shift in sentiment and the rebound in energy prices, the Canadian dollar quickly recovered, but we have returned to a sluggish state. This is not only related to today's Canadian election, but also to overall risk sentiment and global growth concerns. The oil price is also hovering around $70, while the Delta low is $62. If the Canadian dollar manages to break through 85.97 against the Japanese yen, we may see further gains.

Gold Price

The Federal Open Market Committee meeting on Wednesday will control the gold market as traders will contact Federal Reserve Chairman Jerome Powell to have a clearer understanding of when the central bank will cut its monthly bond purchase plan of $120 billion. The US dollar has accepted this proposal in the past few weeks, as Chairman Powell is expected to provide at least some hints of interest rate cuts. However, as this seems to be completely priced, any restrictive disappointment could lead to a sell-off in the US dollar and push up gold prices. However, any upward movement can be short-lived, as contraction is a question of whether the US dollar will rise in the coming months.

Technical Outlook Gold Quantity

Gold prices fell to the $1758 range during the reversal period and have now entered the positive range for the third consecutive day. The US dollar continued to hit its highest level of retreat since August 23 in the previous trading day and maintained a defensive momentum in the first half of Tuesday's trading session. On the contrary, this is seen as a key factor in moderately boosting US dollar denominated commodities, including gold. However, the combination of multiple factors has suppressed any significant upward trend, and caution is needed before preparing for any further appreciation trend.

Further upward movement may see prices appear to test the level of $1832. If the support level is exceeded, the opposite situation may occur, as prices may fall to the low point in March 2021.

Lulama Msongwa

Research and Market Analyst