Market Wrap: Stocks, Bonds, Commodities
US stocks tumbled on Tuesday as concerns about the cost of infrastructure spending and potential tax hikes to pay for President Joe Biden’s $1.9 trillion relief bill weighed on investors who also fear further downside in the market.
The Dow Jones Industrial Average fell 308.05 points (0.94%) to 32,423.15 and the S&P 500 lost 30.07 points (0.76%) to 3,910.52. The Nasdaq Composite dropped 149.85 points (1.12%) to 13,227.70.
Asian shares hit a two-week low on Wednesday, oil weakened further and the dollar neared four-month highs as coronavirus lockdowns in Europe and potential U.S. tax hikes hit risk appetite, leading to a flight to safety.
MSCI’s index of Asia-Pacific stocks outside Japan fell 1.41% to 860.20 levels. Australian index gained 0.50% to 6,778.80. Japanese Nikkei traded slumped 2.05% to 28,405.52.
European stocks were lower on Wednesday, with the Stoxx Europe 50 Index lost 0.78% to 3,803.75, Germany’s DAX down 0.85% to 14,535.35 and France’s CAC lower 0.88% to 5,893.30 and U.K.’s FTSE 100 fell 0.56% to 6,660.85.
Benchmark 10-year U.S. Treasury down as demand for risky asset grow again, today 10-year bond yield down 1.91% to 1.607.
Oil prices edged higher on Wednesday as investors looked for bargains following the previous day’s plunge, but gains were capped as pandemic lockdowns in Europe and a build in U.S. crude stocks curbed risk appetite and raised oversupply fears.
Spot Brent crude oil rose 1.23% to $58.47 per barrel. US West Texas Intermediate crude gained 1.17% to $61.50 a barrel.
The yellow metal traded higher 0.12% to 1728.40 dollars per ounce.
Market Wrap: Forex
The safe-haven U.S. dollar approached a four-month high on Wednesday as concerns over a third COVID-19 wave in Europe, potential U.S. tax hikes and escalating tensions between the West and China sapped risk appetite.
Today, the U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, gained 0.28% to 92.608.
The Euro US Dollar (EUR/USD) widely traded pair slipped 0.28%today. This left the pairing trading around $1.18150.
The Japanese yen rose against the U.S. dollar on Wednesday as stock pushes higher. Today US/JPY up 0.05% to 108.600 level.
Other commodity-related currency lower against the U.S dollar, AUD/USD fell 0.35% to 0.75950 and NZD/USD slipped 0.47% to 0.69680.
EUR/USD Intraday: Strong Trend downside
Our pivot point is at 1.18380
Preferable Price Action: Take Short positions below pivot level with targets at 1.17950 & 1.17700 in extension.
Alternative Price Action: Above pivot looks for further upside to 1.18820 & 1.19070.
Comment: Pair below its 55MA & 20MA 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
GBP/USD Intraday: Trend downside
Our pivot point is at 1.37290
Preferable Price Action: Sell positions below pivot with targets at 1.36650 & 1.36350 in extension.
Alternative Price Action: The price above pivot would call for further upside to 1.37950 & 1.38250.
Comment: Price is below its 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: Bias on the upside
Our pivot point is at 108.520
Preferable Price Action: Buy position above with the target at 108.870 and 109.050 in extension.
Alternative Price Action: The downside breakout of pivot would call for 108.180 and 108.000.
Comment: price above 20MA & 50MA 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
AUD/USD Intraday: Trend downside
Our pivot point is at 0.76380
Preferable Price Action: Sell Positions below pivot with targets at 0.75850 & 0.75600 in extension.
Alternative Price Action: Above pivot looks for further upside with 0.76900 & 0.77150 as targets.
Comment: Pair below its 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
CRUDEOIL Intraday: Trend may reverse
Our pivot point is at 58.10
Preferable Price Action: Above pivots buy Oil with 59.50 & 60.30 as targets.
Alternative Price Action: Sell crude below pivot with targets at 56.70 and 55.90 in extension.
Comment: Crude above its 20MA & 55MA 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: In the consolidation area
Our pivot point is at 1736.70
Preferable Price Action: Further downside to 1725.70 & 1720.00.
Alternative Price Action: If the price gives an upside breakout of a pivot, then the price extends to 1747.30 and 1753.00.
Comment: MACD in negative territory and price below 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
Dow Jones Intraday: Support at 32,390.00
Our pivot point is 32,390.00
Preferable Price Action: Take buy positions above pivot with targets at 32,630.00 & 32,770.00.
Alternative Price Action: Below 32,390.00 looks for further downside to 32,150.00 & 32,000.00.
Comment: Price above its 20MA and RSI above 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 produced7