Asian stocks surged during the early trading session on Thursday, following a spike in Wall Street indices led by tech stocks on the previous day. Being the primary beneficiaries of the global shift to work- and learn-from-home models, tech stocks have been in focus amid the pandemic. Wall Street was also driven by hopes of a COVID-19 vaccine solution, with the US allocating a budget of more than $10 billion in the research and production of vaccine doses.

Japan’s Nikkei 225 climbed 1.9% this morning, while China’s Shanghai Composite Index rose 0.3% and South Korea’s Kospi gained 0.7%. All major indices in Taiwan, Singapore and Indonesia were trading in the green as well, with the Taiwan TAIEX rising 0.45%, the STI notching gains of 1.44% and JSX Composite Index adding 0.09%. Only the Hang Seng Index bucked the trend, falling 0.28%.

The impasse in the US Congress over a new stimulus bill impacted the Australian markets this morning. The ASX 200 fell by 0.7% to 6,087 points. On the data front, Australia is dealing with some worrying news, as the seasonally adjusted jobless rate in the country surged to a 22-year high in July as the coronavirus crisis forced companies to shut shop. Reserve Bank of Australia Governor Philip Lowe’s speech is in the line-up today, which might cause a flurry in the markets. The policymakers kept the cash rate unchanged at 0.25% during their last meeting earlier in August, with plans of a fresh round of bond buying. The Australian Dollar may remain under pressure today.

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Improving investor sentiment was fuelled by US President Donald Trump’s deal with Moderna for 100 million doses of the COVID-19 vaccine. The news boosted crude oil prices, which climbed more than 2%, in turn propelling Canada’s main stock index TSX.

Data to look out for in the economic calendar today include France’s unemployment rate for the second quarter, Germany’s inflation rate for July and RBA Governor’s speech.

EUR/USD

The EUR/USD has been on an uptrend this morning. It climbed 0.14% to 1.1811 early in the session, from 1.1795 in the previous session. The Euro had rallied during Wednesday’s session, despite a particularly negative candlestick formation the previous day. The EUR/USD pair is finding support from pressure on the greenback, with a decline in the US 10-year yield from 5-week highs and the stalemate over the new fiscal stimulus bill. Although the market may continue within the same range, there could be strong buying on the dips. The target level could be 1.25 level, although the pair may take a long time to reach there.

AUD/USD

The Aussie has surprisingly not been impacted much by the RBA’s dovish tone, dismal jobs report and a return to lockdown in Victoria. The AUD/USD gained 0.11% to 0.7169 this morning. The Australian Dollar remained volatile in Wednesday’s session but climbed to the 0.71 level. The greenback is now in an oversold condition, and the pair is in an area that extends support down to the 0.70 level. The 50-day EMA just sits below this 0.70 level. The AUD could remain volatile today. A surge in the greenback in the long term will impact the recently upbeat trading sentiment.

GBP/USD

The British Pound continued to see buyers even though it fell against the US Dollar on Wednesday. The GBP/USD is trading higher by 0.34% at 1.3075. The 1.30 level is in a crucial area. It is a major area of previous resistance, as well as the 50-day EMA lies just below it, which will provide support. If it breaks below this level, the price could go all the way to 1.2750.

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