Daily Market Outlook, 5 February, 2020

Market Wrap: Stocks, Bonds, Commodities

US Wall Street’s major stock indices jumped on Tuesday, Nasdaq index touched a record high and the S&P 500 posted its biggest one-day gain in last six months as worried of a heavy economic impact from the coronavirus waned after China’s central bank intervened.

The Dow Jones Industrial Average rose 407.82 points (1.44%) to 28,807.63, the S&P 500 gained 48.67 points (1.50%) to 3,297.59 and the Nasdaq Composite added 194.57 points (2.1%) to 9,467.97. Information technology (2.60%), Industrials (1.84%), Consumer Discretionary (1.76%), Consumer Discretionary (1.74%), %), Health Care (1.70%) were the most gainer sectors.

Regarding the U.S. economic data, Factory goods orders rose 1.8% in December, better than economists’ forecasts for a 1.2% rise, later today economist expect ISM Non-Manufacturing PMI m/m rise to 55.1 from 55 earlier.

Asian stocks indices advanced on Wednesday on hopes of additional Chinese stimulus to reduce the economic impact on china, but risks remain there as the illness continues to spread and the death toll neared 500.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.50% to 673.55. Australian index was up 0.45%, while Japan’s Nikkei stock index rose 1.60%.

European stocks were rose on Tuesday, with the Stoxx Europe 50 Index advanced 1.94% to 3,732.28, Germany’s DAX gained 1.81% to 13,281.74 and France’s CAC added 1.76% to 5935.05 and the U.K.’s FTSE 100 advanced 1.55% to 7,439.82.

U.S. government-bond prices down as demand for risky assets grow. The benchmark U.S. 10-year Treasury yield flat to 1.593.

The yellow metal down 1.55% on Tuesday before sliding on a stronger dollar index and profit-booking and rebound on Wall Street. Today spot Gold traded 0.40% higher to $1559 per ounce.

Oil recovered from a one-year low to trade above $50 per barrel as Saudi Arabia ran into Russian resistance in its push for further production cuts to combat a virus-driven demand hit.

Brent crude up 1.10% at $55.05 per barrel, while US West Texas Intermediate (WTI) crude rose 0.90% to $50.05 per barrel.

Market Wrap: Forex

The dollar index increased gains on Tuesday, as stronger-than-expected U.S. economic data and strong rise against the yen on fading safe-haven demand as coronavirus fears eased.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, advanced 0.05% to 97.860.

Moves in the widely traded EUR/USD pair were mixed, with the Euro and British pound flat to $1.10370 and $1.30180 sequentially.

EUR/USD Intraday: Intraday Support at 1.10335

Our pivot point is at 1.10335

Preferable Price Action: Take long positions above 1.10335 with targets at 1.10465 & 1.10540 in extension.

Alternative Price Action: Below pivot looks for further downside at 1.10240 & 1.10170

Comment: The RSI indicator below 50 and MACD in negative side. Moreover, the pair is trading below its 20MA & 55 MA.

Green Lines Indicate Resistance Levels  – Red Lines Indicates Support Levels  
– Light Blue is a Pivot Point   – Black represents the price when the report was produced

GBP/USD Intraday:  The bias remains bullish

Our pivot point is at 1.30080

Preferable Price Action: Long positions above pivot with targets at 1.30355 & 1.30565 in extension.

Alternative Price Action: Price below pivot would call for further downside to 1.29765 and 1.29455

Comment: The RSI indicator NEAR the 50-level mark and MACD near-zero level.

Green Lines Indicate Resistance Levels  – Red Lines Indicates Support Levels  
– Light Blue is a Pivot Point   – Black represents the price when the report was produced

JPY/USD Intraday: upside moment continous

Our pivot point is at 109.290

Preferable Price Action: Long position above 109.290 with the target at 109.555 and 109.730 in extension

Alternative Price Action: The downside breakout of 109.290 would call for 109.080 and 108.290

Comment: Pair above its 20MA and 55MA and MACD also in positive territory.

Green Lines Indicate Resistance Levels  – Red Lines Indicates Support Levels  
– Light Blue is a Pivot Point   – Black represents the price when the report was produced

AUD/USD Intraday:  Trend may reverse

Our pivot point is at 0.67235

Preferable Price Action: Long positions above pivot with targets at 0.67445 & 0.67555 in extension.

Alternative Price Action: Below pivot looks for further downside with 0.67095 & 0.66995 as targets.

Comment: The RSI indicator above 50 levels and price above their 55MA and 20MA and MACD also in positive territory.

Green Lines Indicate Resistance Levels  – Red Lines Indicates Support Levels  
– Light Blue is a Pivot Point   – Black represents the price when the report was produced

CRUDEOIL Intraday: May take support at 50 level

Our pivot point is at 49.69

Preferable Price Action: Buy above 49.69 with targets at 50.37 and 50.76 in extension.

Alternative Price Action: Below pivots sell Oil with 49.11 & 48.69 as targets.

Comment: MACD indicator in negative territory and pair below its 55MA and above its 20MA.

Green Lines Indicate Resistance Levels  – Red Lines Indicates Support Levels  
– Light Blue is a Pivot Point   – Black represents the price when the report was produced

XAU/USD Intraday: 

Our pivot point is at 1553.89

Preferable Price Action: Further upside to 1563.72 & 1569.11

Alternative Price Action: If price gives downside breakout of pivot, then price extends to 1547.18 and 1542.73

Comment: The RSI indicator above 50 marks and MACD also in negative territory.

Green Lines Indicate Resistance Levels  – Red Lines Indicates Support Levels  
– Light Blue is a Pivot Point   – Black represents the price when the report was produced

Dow jones Intraday:   Upside continues

Our pivot point is at 28,745

Preferable Price Action: Take long positions above pivot with targets at 28,907 & 28,993 in extension.

Alternative Price Action: Below 28,745 looks for further downside to 28,600 & 28,497.

Comment: The RSI indicator near 50 marks and MACD near zero level. Moreover, the pair is trading above 20MA & 55MA.

Green Lines Indicate Resistance Levels  – Red Lines Indicates Support Levels  
– Light Blue is a Pivot Point   – Black represents the price when the report was produced