Oil price plunge triggers the next round of market selling
Oil price crash
The price of crude oil crashed lower by over thirty percent this week after Saudi Arabia and Russia failed to come to an agreement over oil output. WTI oil plunged towards $30.00 per barrel as a major rift opened up between key OPEC members Saudi Arabia and Russia. The sudden drop in oil prices caused a wave of panic amongst investors, with global indices dropping sharply on the weekly price open. Oil prices and stock markets around the globe failed to recover earlier losses as the World Health Organization declared that the coronavirus was now a global pandemic.
- The USDJPY pair is only bullish while trading above the 106.50 level, key resistance is found at the 107.40 and 108.10 levels.
- If the USDJPY pair trades below the 106.50 level, key support is located at the 103.50 and 101.80 levels.
Crypto bear market
Bitcoin tumbled by over fifty percent this week as the entire cryptocurrency market turned bearish for the first time since January this year. Risk-off trading sentiment and large bearish bets from crypto whales caused the BTCUBTCUSDSD pair to drop towards the $5,500 level. The broader cryptocurrency market also suffered heavily, with over $100 billion wiped-off the total market capitalization of the cryptocurrency market since late-February. Ethereum and Litecoin both suffered huge double-digit losses on the week as altcoins plunged and turned negative on a year-to-date basis.
- The pair is only bullish while trading above the $6,500 level, key resistance is found at the $8,000 and $8,500 levels.
- The BTCUSD pair is only bearish while trading below the $7,500 level, key support is located at the $4,000 and $3,000 levels.
The Bank of England cut interest rates by 50 basis points this week, with the central bank bringing UK rates down to just 0.25 basis points. The British pound fell sharply against the US dollar and the euro currency on the news, as the BOE attempted to aid the UK businesses amidst the coronavirus outbreak. The UK economy is heavily reliant on the services sector, with the spread of the coronavirus likely to effect the tourism, travel, leisure, and hospitality industries. The EURGBP pair rose to a fresh 2020 trading high as the Bank of England announced the emergency rate cut.
- The GBPUSD pair is only bearish while trading below the 1.2960 level, key support is found at the 1.2500 and 1.2350 levels.
- If the GBPUSD pair trades above the 1.2960 level, buyers may test towards the 1.3100 and 1.3280 resistance levels.
The euro currency incurred extreme volatility this week as the pair traded in a wide price range as a series of events unfolded in financial markets. The EURUSD pair traded towards the 1.1500 level as the greenback come under pressure due to the sell-off in oil markets. The euro then gave back its weekly gains as the European Central Bank announced policy assistance and measures to combat the slow down in the EU economy. The euro currency also suffered as the Italian government put the country on lockdown down due the rapid spread of the coronavirus through Northern Italy.
- The EURUSD pair is only bearish while trading below the 1.1090 level, key support is found at the 1.1000 and 1.0900 levels.
- If the EURUSD pair trades above the 1.1090 level, buyers may test towards the 1.1350 and 1.1510 resistance levels.