Daily Market Outlook, 6 February, 2020

Market Wrap: Stocks, Bonds, Commodities

 US Wall Street’s major stock indices jumped on Wednesday, the benchmark S&P 500 posted a record closing high as US stocks rallied for a third straight day on better than expected US economic data and fading fears of the financial fallout from the coronavirus in China.

The Dow Jones Industrial gained 483.22 points (1.68%) to 29,290.85, the S&P 500 index advanced 37.1 points (1.13%) to 3,334.69 and the Nasdaq Composite rose 40.71 points (0.43%) to 9,508.68.

Regarding the U.S. economic data, ISM non-manufacturing data for January showed an uptick to 55.5, better than expectation of 55. On the labour market front, private payroll grew by 291,000 last month, a sharp increase from the 199,000 in December that beat the economists forecast of 156,000.

Asian stocks higher on Thursday, a day after S&P 500 index hit a record high followed by encouraging economic data, while investors keep an eye on the impact of the coronavirus outbreak.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.66% to 684.30 while Japan’s Nikkei rose 2.50%.

European stocks were rose on Wednesday, with the Stoxx Europe 50 Index advanced 1.22% to 3,777.84, Germany’s DAX gained 1.48% to 13,478.33 and France’s CAC added 0.85% to 5,985.40 and the U.K.’s FTSE 100 advanced 0.57% to 7,482.48.

U.S. government-bond prices down as demand for risky assets grow. The benchmark U.S. 10-year Treasury yield rose 1.69% to 1.677.

Gold at two-week lows on Wednesday before rebounding as investors continued to monitor China’s coronavirus crisis closely after the World Health Organization downplayed media reports about vaccine breakthroughs, which initially got markets excited. Today spot Gold traded 0.35% down to $1553.70 per ounce.

Oil rose for a second straight day on optimism OPEC+ will be agreed on large cuts in response to virus-led demand destruction, countering a further increase in U.S. crude stockpiles yesterday.

Brent crude up 1.14% at $56.90 per barrel, while US West Texas Intermediate (WTI) crude rose 1.54% to $52.05 per barrel.

Market Wrap: Forex

The dollar climbed on Wednesday as good services and private labour market data suggesting the underlying American economy remained on solid footing.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, advanced 0.05% to 98.185.

The safe-haven yen stepped back to 109.950 level, compared with a three-week high of 108.305 hits on Friday.

Moves in the widely traded EUR/USD pair were mixed, with the Euro and British pound flat to $1.09977 and $1.29825 sequentially.

EUR/USD Intraday : Intraday Resistance at 1.10025

Our pivot point is at 1.10025

Preferable Price Action: Take short positions below 1.10025 with targets at 1.09925 & 1.09840 in extension.

Alternative Price Action: Above pivot looks for further upside at 1.10154 & 1.10247

Comment: The RSI indicator below 50 and MACD on the 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 bearish

Our pivot point is at 1.30085

Preferable Price Action: Short positions below pivot with targets at 1.29641 & 1.29447 in extension.

Alternative Price Action: Price above pivot would call for further upside to 1.30528 and 1.30715

Comment: The RSI indicator below the 50-level mark and pair below its 20 MA and 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

JPY/USD Intraday:  Upside moment continues

Our pivot point is at 109.810

Preferable Price Action: Long position above 109.810 with the target at 110.068 and 110.226 in extension

Alternative Price Action: The downside breakout of 109.810 would call for 109.570 and 108.416

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 reverse

Our pivot point is at 0.67450

Preferable Price Action: Long positions above pivot with targets at 0.67696 & 0.67797 in extension.

Alternative Price Action: Below pivot looks for further downside with 0.67272 & 0.67154 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: take support at 50 level

Our pivot point is at 52.24

Preferable Price Action: Buy above 52.24 with targets at 52.85 and 53.33 in extension.

Alternative Price Action: Below pivots sell Oil with 51.62 & 51.23 as targets.

Comment: MACD indicator in positive territory and pair above its 55MA and 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:  May Take Support 1550.

Our pivot point is at 1552.64

Preferable Price Action: Further upside to 1562.38 & 1567.70

Alternative Price Action: If price gives downside breakout of pivot, then price extends to 1546.54 and 1542.66

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 29,375

Preferable Price Action: Take long positions above pivot with targets at 29,587 & 29,702 in extension.

Alternative Price Action: Below 29,375 looks for further downside to 29,209 & 29,056.

Comment: The RSI indicator at 70 marks and MACD positive territory. 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