European stocks fall on worries of a second coronavirus wave
European stocks turned lower as concerns over a new wave of the coronavirus grew. In Germany, the DAX index declined by about 75 points while in France, the CAC index fell by 56 points. In the UK, the FTSE 100 index fell by 45 points. The biggest worry is that of a new wave of infections as countries rush to reopen their economies. Over the weekend, South Korea reported several infections while in China, officials reported a new cluster of patients at Wuhan. These cases mean that countries could remain in shutdown for a longer period than investors were expecting. Indeed, travel and energy stocks were among the worst-performing companies in the UK.
The British pound declined today as the market anticipated a deadlock as the third round of Brexit talks resumed. In a statement yesterday, officials from the European Union said that they were wary of the UK’s tactics during the negotiations. A few disagreements have emerged. For example, the European Union has insisted that the UK must operate within its rules and regulations to ensure fair competition. The UK has said that it will prefer regulating its own industries. Fisheries are also contentious. The UK has insisted that it will seek control of its waters while the EU has insisted that it must be given access to UK fishing waters. Other key issues are about the European Court of Justice (ECJ) and enforcement.
The price of Bitcoin was relatively volatile today as market enthusiasts waited for the big halving event. In halving, the blocks that are rewarded to miners will be slashed into half, in a process that happens every four years. The goal of halving is to reduce the amount of Bitcoin in circulation and possibly boost its prices. Over the weekend, the price dropped to a low of $8,000 after moving above $10,000 in the previous week. The current price action is possible because investors who bought the currency because of halving have started to take profits.
The EUR/USD pair dropped today as the market grew concerned about a new wave of COVID-19. The price is trading at 1.0817, which is lower than the open of 1.0850. On the hourly chart, this price is slightly below the 28-day and 50-day exponential moving averages. The price is also between the 23.6% and 38.2% Fibonacci retracement level. The pair has also formed a head and shoulders pattern, and is now at the neckline. Therefore, the pair may continue falling as bears attempt to test the 23.6% retracement level at 1.0795.
The GBP/USD dropped to an intraday low of 1.2300 as the market continued to worry about Brexit. On the hourly chart, the price is below the 28-day and 56-day exponential moving averages while the RSI has moved below the oversold zone of 30. Therefore, the pair may continue falling as the bears attempt to test the previous low of 1.2267.
The BTC/USD pair was relatively volatile today as the market waited for the halving event. The pair moved to an intraday low of 8,470, which was the lowest level since April 29. On the four-hour chart, the pair has formed a significant gap and an island reversal pattern. This means that the pair may attempt to fill the gap and possibly test the 28-day EMA at 9,300. Still, the pair will likely be very volatile ahead of halving.