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Investor’s Reactions on Biden’s Victory Helped Stocks in Asia-Pacific Rise

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On Monday, stocks in Asia-Pacific edged higher as investors in several regions in Asia reacted to Joe Biden’s victory against Donald Trump. 

In Japan, the Nikkei 225 gained 1.11%. 

In Australia, the S&P/ASX200 gained 1.33%. 

MCI’s broadest index of Asia-Pacific shares outside Japan traded 0.29%. 

President Joe Biden’s victory was assured after results were projected from Pennsylvania and Nevada obtaining 270 electoral votes needed to win the election against incumbent president Donald Trump.  

However, Trump still refuses to accept defeat and claims that it is still “far from ever.” Trump is continuing his legal action to contest the result. Adding to the uncertainty is which party holds the Senate majority, with four races yet to declare winners, some investors warned that it was too early to say whether market volatility has calmed down. 

“We would caution that heightened volatility is not necessarily behind us, even though the election result is all but settled,” Commonwealth Bank of Australia currency analyst Kim Mundy said in a note. 

On the economic data front, China’s exports surged 11.4% in October as compared to a year earlier, according to official statistics released over the weekend.  

Meanwhile, on the coronavirus front, infections continue to rise in the states. There are recently reported more than 126,000 new infections for two days in a row in the United States. Globally, there are 50 million new cases confirmed, according to Reuters. 

On the commodity front, oil prices edged higher early Monday morning in the Asian trading session. Other commodities such as gold and silver seem to rise as well following the downfall of the U.S. dollar after amidst the uncertainty of post-elections. 

Technical Outlook 

 

In the daily charts of AUD/USD, the pair edged higher early Monday morning in the Sydney session. 

As what we can see in the charts, the pair broke out from the resistance level turned support at 0.72431. The Aussie dollar quickly gained back from its losses on Friday’s trading day.  

From what we can observe from the Aussie last week, it mostly gained against the dollar while taking advantage of the uncertainty brought by the U.S. Presidential elections. We can see a strong bullish momentum by the Aussies and the volatility this week may even break past the resistance level at 0.74023.  

If the price will retrace back from the support level at 0.72431, we can expect it to re-test the support level at 0.70098 once again as it is a strong support level due to the 3 re-tests it took in the previous weeks. If the price completely broke down from this support level, we can expect the AUD to fall further but seeing the bullish moment of the Aussie dollar today makes it seem unlikely to happen anytime soon.

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