Brent crude forms bearish flag on vaccine rollout challenges
Global stocks were mixed today as investors eyed the bond market and the ongoing challenges facing the European coronavirus roll-out. In Europe, the DAX index and the FTSE MIB rose slightly while the FTSE 100 and CAC 40 indices declined slightly. In the United States, the Dow Jones and Nasdaq 100 futures declined modestly. The 10-year US Treasury bond yield dropped to 1.68%, which is lower than last week’s high of 1.74%. In Europe, the 10-year GILTs declined to 0.81%.
European equities also wavered because of the rising tensions between the EU and UK on the vaccine roll-out. This happened as the EU threatened to block vaccines manufactured by AstraZeneca to the UK in light of the vaccine shortage on the continent. The bloc’s leaders will meet on Thursday to deliberate on whether to implement the ban. Meanwhile, in the US, the government announced that AstraZeneca was safe and that the country will likely include it in the ongoing vaccination drive.
The US dollar declined against key currencies ahead of the latest US existing-home sales numbers. Analysts expect the data to show that sales declined by 3% to 6.5 million in February. The currency also gained in reaction to the bond market and investors waited for a speech by Jerome Powell that is scheduled for later today. He will also testify before Congressional committees on Tuesday and Wednesday. The currency also fell ahead of US bond auctions scheduled for later this week.
The EUR/USD price bounced back after dropping to a multi-week low of 1.1866 during the Asian session. It is trading at 1.1910, which is slightly above the upper line of the descending channel on the hourly chart. It is also slightly above the 25-day exponential moving average (EMA) while the DeMarker indicator has moved above the oversold level. Therefore, the pair may keep rising with the next key target being at 1.1950.
The XBR/USD pair bounced back during the European session after the positive data on AstraZeneca’s vaccine. It rose to an intraday high of 64.53, which is substantially higher than last week’s low of 61.25. On the hourly chart, the price seems to be forming a bearish flag pattern that is shown in yellow. It is also between the upper and middle lines of the Bollinger Bands. Therefore, the pair may continue dropping as bears target the next key support level at 61.50.
The GBP/USD pair was little changed as investors waited for the important UK employment numbers scheduled for tomorrow. On the four-hour chart, the price is slightly below the 15-day moving average. It is also between the white channel whose support and resistance levels are at 1.3778 and 1.4000, respectively. The Relative Strength Index (RSI) is at the neutral level of 43. Therefore, the pair will likely remain in the current range ahead of the UK jobs data.