US futures bounce back from worst day in two years
Global stocks had their worst day in two years yesterday. This happened as market participants rushed to safety as covid-19 spread to other countries like Iran, Italy and South Korea. In the United States, the Dow Jones Industrial Average (DJIA) dropped by more than 1000 points while Nasdaq fell by 355 points. The losses continued today in the Asia-Pacific region. In China, the Shanghai composite and A50 dropped by more than 2% while in Japan, the Nikkei dropped by more than 3%. In Australia, the ASX dropped by almost 1.50%. However, US futures have rebounded, with the Dow and Nasdaq gaining by 175 and 85 points respectively. Meanwhile, 71 people died from the disease bringing the number of fatalities to 2,663.
The euro rose slightly against the USD during the Asian session. Today, we will receive the second reading of Germany’s fourth quarter GDP data. The market expects the German economy to have grown by 0.1% in the fourth quarter. On a YoY basis, they expect the economy to have grown by 0.3%. This data will come a day after the Ifo Institute released positive business expectations and climate data. Data showed that sentiment among businesses about the economy improved this month.
The US dollar index eased slightly during the Asian session. The Conference Board will release consumer confidence data today. Confidence is expected to have increased from 131.6 to 132.0. FOMC member, Robert Kaplan will deliver a speech. Other important data will be the US house price index and Redbook.
The EUR/USD pair rose to an intraday high of 1.0865, which is along the important resistance level shown in yellow below. The price is above the 14-day and 28-day exponential moving averages. The signal line of the MACD is above the centreline price on the hourly chart. The accumulation/distribution indicator has been rising. The pair may continue rising today.
The XBR/USD pair declined by more than 4% yesterday. It reached an intraday low of 55.44, which was the lowest level since December last year. The price rose slightly during the Asian session, and is now trading at 56.10. The signal line of the MACD has made a bullish crossover against the histogram. The short and medium-term moving averages appear to be making a bullish crossover also. There is a possibility that the pair will attempt to recover yesterday’s losses today.
The XAU/USD pair rose to a high of 1689.93 yesterday on coronavirus risks. This changed during the American and Asian sessions, when the pair pared back earlier gains. It is now trading at 1656.77. The price is slightly below the 14-day and 28-day exponential moving averages. The RSI has fallen from yesterday’s high of 85.35 to a low of 47. The pair may decline further if the number of infections decline today.