Market Wrap: Stocks, Bonds, Commodities
The Dow and S&P 500 ended a choppy session lower on Wednesday after the Federal Reserve reassured investors of its support for the economy but projected a 6.5% decline in gross domestic product this year.
The US Federal Reserve said that it would keep rates at nearly zero at least as long as the unemployment rate remains above 6.5%. It said that it will keep buying bonds to maintain low borrowing rates and support a US economy mired in a deep recession with high unemployment adding that nearly all its policymakers foresee no rate hike through 2022.
The Dow Jones Industrial Average fell 282.31 points (1.04%) to 26,989.99, the S&P 500 lost 17.04 points (0.53%) to 3,190.14 and the Nasdaq Composite added 66.59 points (0.67%) to 10,020.35.
Asian stocks were set to fall on Thursday after gloomy economic projections from the US Federal Reserve sent the greenback and most Wall Street shares lower.
MSCI’s index of Asia-Pacific stocks outside Japan slipped 1.10% to 648 levels. Australian index declines 3.10% to 5,960.40. Japan’s Nikkei plunged 2.79% to 22,480.
European stocks were lower on Wednesday, with the Stoxx Europe 50 Index fell 0.81% to 3,293.71, Germany’s DAX down 0.70% to 12,530.16 and France’s CAC lost 0.82% to 5,053.42 and U.K.’s FTSE 100 fell 0.10% to 6,329.13.
Benchmark 10-year U.S. Treasury rose as demand for safe asset grow again, today 10-year bond yield lost 4.45% to 0.715.
Oil prices fell in early trade on Thursday on worries about slow demand growth with coronavirus cases rising, US crude stockpiles hitting an all-time high and the US Federal Reserve projecting recovery from the pandemic would take years.
Spot Brent crude oil fell 3.25% to $40.45 per barrel. US West Texas Intermediate crude down 3.84% to $38.21 a barrel.
The yellow metal rose as Fed chair Powell dovish outlook on the economy and stay zero interest rate for a full year. Yesterday Gold rose more than 1.5% to $1738 per ounce.
Market Wrap: Forex
The dollar was up on Thursday, with investor sentiment down after details emerged from the U.S. Federal Reserve’s policy meeting the day before.
Today, the U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, higher 0.40% to 96.325.
The Euro US Dollar (EUR/USD) widely traded pair lost 0.15% today. This left the pairing trading around $1.13520. The pound traded 0.54% lower to 1.26770.
The Japanese yen rose against the U.S. dollar on Monday as demand for safe currency rose. Today US/JPY flat to 107.070.
Other commodity-related currency broadly edged lower against U.S dollar, AUD/USD down 0.98% to 0.69280 and NZD/USD fell 0.66% to 0.64950.
EUR/USD Intraday: Support at 1.13300
Our pivot point is at 1.13300
Preferable Price Action: Take Long positions above pivot level with targets at 1.13754 & 1.13975 in extension.
Alternative Price Action: Below pivot looks for further downside at 1.12869 & 1.12631.
Comment: Very strong support at 1.13300 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
GBP/USD Intraday: Resistance at 1.27100
Our pivot point is at 1.27100
Preferable Price Action: Short positions below pivot with targets at 1.26505 & 1.26255 in extension.
Alternative Price Action: Price above pivot would call for further upside to 1.27680 & 1.27907.
Comment: Price below 20MA & 55MA and RSI below 50 levels.
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
USD/JPY Intraday: Temporary pullback
Our pivot point is at 106.800
Preferable Price Action: Long position above pivot with the target at 107.401 and 107.705 in extension.
Alternative Price Action: The downside breakout of pivot would call for 106.295 and 106.012.
Comment: Pair above 20MA and RSI at 50 levels.
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: Bias on the downside
Our pivot point is at 0.69600
Preferable Price Action: Short positions below pivot with targets at 0.69033 & 0.68785 in extension.
Alternative Price Action: Above pivot looks for further upside with 0.70167 & 0.70420 as targets.
Comment: MACD in the negative zone and RSI at oversold levels.
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: In consolidation zone
Our pivot point is at 37.70
Preferable Price Action: Buy crude above pivot with targets at 39.00 and 39.60 in extension.
Alternative Price Action: Below pivots sell Oil with 36.39 & 35.79 as targets.
Comment: Bias on the upside for crude as trend upside.
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: Trend on upside
Our pivot point is at 1724.00
Preferable Price Action: Further upside to 1736.73 & 1742.02 level.
Alternative Price Action: If price gives downside breakout of a pivot, then price extends to 1711.25 and 1705.58.
Comment: RSI above 50 level mark 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
Dow Jones Intraday: Trend change to downside
Our pivot point is at 26750.00
Preferable Price Action: Take sell positions below pivot with targets at 26278.39 & 26000.90 in extension.
Alternative Price Action: Above 26750.00 looks for further upside to 27215.71 & 27477.78.
Comment: Price below 20MA and 55MA and MACD 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 produced7