Market Wrap: Stocks, Bonds, Commodities
The S&P 500 fell for the seventh straight day on Friday and the benchmark index suffered its biggest weekly drop since the 2008 global financial crisis on growing fears the fast-spreading coronavirus could push the economy into recession, although stocks regained some ground right at the end of a volatile session. The Dow and the Nasdaq also registered their deepest weekly percentage losses since October 2008.
The Dow Jones Industrial Average dropped 357.28 points (1.39%) to 25,409.36; the S&P 500 fell 24.54 points (0.82%) to 2,954.22; and the Nasdaq Composite flat to 8,567.37.
The rout in world stocks deepened on Monday, with investors rattled by weekend data from China that showed its fastest ever contraction in factory activity, raising fears of a global recession from the coronavirus.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 1.28% to 646.60. Japan’s Nikkei opened 1.3% lower at a six-month trough. Australian market 3% and New Zealand’s NZ50 slid 3% into correction territory.
European stocks were down on Friday, with the Stoxx Europe 50 Index slipped 3.66% to 3,329.49, Germany’s DAX dropped 3.86% to 11,890 and France’s CAC lost 3.38% to 5,309 and U.K.’s FTSE 100 declined 3.18% to 6,580.
Benchmark 10-year U.S. Treasury yields declined to a record low level on Monday, today lower 2.78% to 1.095.
Yellow metal tumbled more than 3% on Friday, joining the carnage in Oil and on Wall Street, where the S&P 500 headed for its worst weekly slump since the financial crisis of 2008.
Oil prices pared losses after earlier hitting multi-year lows on Monday as hopes that a bigger than expected production cut from OPEC and stimulus from central banks could offset economic gloom from the coronavirus outbreak.
Brent crude advanced 3.22% at $51.27 per barrel, while US West Texas Intermediate (WTI) crude rose 2.90% to $46 per barrel.
Market Wrap: Forex
Today, The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies flat to 98.000.
Traders now imply a full 50 basis point cut by the Fed in March while Australian markets are pricing in a quarter-point cut at the RBA’s Tuesday meeting
Other Commodity-linked currencies were broadly higher against the greenback. AUD/USD advanced +0.46% to 0.65730 and NZD/USD gain +0.45% to 0.66220.
The yen and the euro were on the front foot against the dollar on Monday as traders raised their bets of an interest rate cut by the U.S. Federal Reserve this month to shield the economy from the rapid spread of the coronavirus.
EUR/USD Intraday: Trend upside continues
Our pivot point is at 1.10265
Preferable Price Action: Take long positions above pivot level with targets at 1.10692 & 1.10879 in extension.
Alternative Price Action: Below pivot looks for further downside at 1.09881 & 1.096117
Comment: MACD in positive territory and pair above its 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
GBP/USD Intraday: Bias Remain Bullish
Our pivot point is at 1.28185
Preferable Price Action: Long positions above pivot with targets at 1.28768 & 1.29071 in extension.
Alternative Price Action: Price below pivot would call for further downside to 1.27783 and 1.27508.
Comment: The RSI indicator above 50 level mark and pair below 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
JPY/USD Intraday: May Trend Reverse
Our pivot point is at 108
Preferable Price Action: Long position above 108 with the target at 108.610 and 109.106 in extension.
Alternative Price Action: The downside breakout of pivot would call for 107.513 and 107.182
Comment: Pair above its 20MA and below its 55MA and RSI above 50 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
AUD/USD Intraday: Near Resistance level
Our pivot point is at 0.65470
Preferable Price Action: Short positions below pivot with targets at 0.65116 & 0.64932 in extension.
Alternative Price Action: Above pivot looks for further upside with 0.65773 & 0.65945 as targets.
Comment: pair above its 55MA & 20MA and MACD 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: Made low 43.60
Our pivot point is at 45.61
Preferable Price Action: Buy above pivot with targets at 44.17 and 47.93 in extension.
Alternative Price Action: Below pivots sell Oil with 44.50 & 43.84 as targets.
Comment: Pair above its 55MA & 20MA and MACD 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
XAU/USD Intraday: Under Pressure
Our pivot point is at 1609.30
Preferable Price Action: Further downside to 1587.19 & 1577.87 level
Alternative Price Action: If price gives upside breakout of a pivot, then price extends to 1627.92 and 1640.52.
Comment: MACD in negative territory and pair below its 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
Dow jones Intraday: Bounce back from Friday low
Our pivot point is at 25,315
Preferable Price Action: Take long positions above pivot with targets at 25,960 & 26,306 in extension.
Alternative Price Action: Below 25,315 looks for further down to 24,754 & 24,455.
Comment: Pair is trading above its 55MA and MACD in positive territory and RSI above 50 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