Market Wrap: Stocks, Bonds, Commodities
Global equity markets slid on Tuesday and the yield on 10-year US Treasuries fell below 1% for the first time after the Federal Reserve cut interest rates to protect the US economy from the effect of the fast-spreading coronavirus.
The Dow Jones Industrial Average lost 786 points (2.95%) to 25,917, the S&P 500 dropped 86.86 points (2.80%) to 3,003 and the Nasdaq Composite fell 268 points (3.00%) to 8,684.
The US Federal Reserve cut interest rates on Tuesday in an emergency move designed to protect the world’s largest economy from the effect of the coronavirus. In a statement, the central bank said it was cutting rates by a half percentage point to a target range of 1.00 percent to 1.25 percent.
Asian stock indices edged higher on Wednesday, as an urgent rate cut from the US Federal Reserve did little to soothe investor fears over the coronavirus’s widening fallout.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.64% to 652 level after easing hopes drove gains on Tuesday. Australia’s S&P/ASX 200 index dropped 1.8% and Japan’s Nikkei was flat and trading in a narrow range.
European stocks were down on Monday, with the Stoxx Europe 50 Index rose 0.99% to 3,371.97, Germany’s DAX advanced 1.08% to 11,985 and France’s CAC higher 1.12% to 5,393 and U.K.’s FTSE 100 rose 0.95% to 6,718.
Benchmark 10-year U.S. Treasury yields down as demand for a safe asset on Wednesday, today down 3.85% to 0.978.
Yellow metal returned to $1,650 levels on Tuesday as an emergency rate cut by the Federal Reserve and worry that U.S. cases of the coronavirus was surpassed the triple-digit mark drove demand for the safe haven.
Crude Oil prices gained on Wednesday as OPEC+ recommended deeper output cut to combat the slowing demand due to the virus outbreak. Today’s rebound in prices also came after the Federal Reserve cut the key lending rate cuts.
Brent crude up 1.18% at $52.44 per barrel, while US West Texas Intermediate (WTI) crude advanced 1.25% to $47.85 per barrel.
Market Wrap: Forex
The U.S. dollar edged higher on Wednesday after the U.S. Federal Reserve cut interest rates by half a percentage point.
Today, the U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose 0.20% to 97.300.
The safe-haven Japanese yen gained on Tuesday, as investor hopes for monetary easing were tempered by concern over how much it could do to combat the economic damage from the coronavirus outbreak.
Other Commodity-linked currencies were broadly higher against the greenback. AUD/USD advanced 0.28% to 0.66000 and NZD/USD rose 0.16% to 0.62840.
EUR/USD Intraday: Trend upside continues
Our pivot point is at 1.11280
Preferable Price Action: Take long positions above pivot level with targets at 1.11901 & 1.12151 in extension.
Alternative Price Action: Below pivot looks for further downside at 1.10821 & 1.10466
Comment: MACD in positive territory and pair below its 55MA & 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
GBP/USD Intraday: Under Pressure
Our pivot point is at 1.28310
Preferable Price Action: Short positions below pivot with targets at 1.27850 & 1.27645 in extension.
Alternative Price Action: Price above pivot would call for further upside to 1.28567 and 1.28794.
Comment: The RSI indicator near 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: Downtrend Continues
Our pivot point is at 107.195
Preferable Price Action: Long position above 107.195 with the target at 108.057 and 108.533 in extension.
Alternative Price Action: The downside breakout of pivot would call for 106.566 and 106.205.
Comment: Pair above its 20MA & 55MA 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 produced
AUD/USD Intraday: Intraday Support at 0.65795
Our pivot point is at 0.65795
Preferable Price Action: Long positions above pivot with targets at 0.66263 & 0.66465 in extension.
Alternative Price Action: Below pivot looks for further downside with 0.65412 & 0.65134 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: Trend change to the upside
Our pivot point is at 47.03
Preferable Price Action: Buy above pivot with targets at 48.57 and 49.27 in extension.
Alternative Price Action: Below pivots sell Oil with 45.63 & 44.91 as targets.
Comment: Pair above its 55MA & 20MA 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
XAU/USD Intraday: Bias Remain Bullish
Our pivot point is at 1613.40
Preferable Price Action: Further upside to 1642.29 & 1653.29 level.
Alternative Price Action: If price gives downside breakout of a pivot, then price extends to 1587.66 and 1570.38.
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
Dow jones Intraday: Down 3% on Tuesday
Our pivot point is at 26,062
Preferable Price Action: Take long positions above pivot with targets at 26,616 & 26,888 in extension.
Alternative Price Action: Below 26,062 looks for further downside to 25,654 & 25,413.
Comment: Pair is trading above its 20MA and MACD in positive territory 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 produced