Chinese Cues

Asian and Chinese Stocks Rebound on PBOC Stimulus

Asian stocks managed to rebound today after sharp losses the previous sessions. The sharp correction in Chinese and Asian stocks came after the coronavirus outbreak.

Yesterday the PBOC announced measures to ease the impact of the epidemic adding liquidity in the stock markets. The central bank of China cut the reverse repo rates by 10 basis points and injected $173.8 billion of liquidity. The Nikkei 225 finished 0.49% higher at 23,084.

The Hang Seng index closed up 1.21% at 26675. The Singapore FTSE Straits Times Index ended 1.29% higher at 3156. In Australia the ASX 200 ended with a gain of 0.30% at 6948.  

European stock indices started higher the session. The DAX index is 1.09% higher at 13,188. CAC40 is 1.26 higher at 5,905, while the FTSE MIB in Milan is 1.49% higher at 23,810. In London, the FTSE 100 is 1.22% higher at 7,415. 

XAUUSD Daily Chart

In the commodities markets, the crude price is 1.38% higher at $50.80 amid a slowdown in global fuel demand. Brent oil is 0.59% higher at $54.77 per barrel. Gold price is 0.44% lower at 1,570. The gold technical outlook is positive as the gold price has created a strong base at $1560. The first hurdle stands at 1,611 the recent high, while the support stands at 1,447 the recent low.       

Cryptocurrencies market retreat today, BTCUSD is 1.96% lower at $9,118 hitting the daily low at $9,059 and the daily high at $9,332. BTCUSD momentum is still bullish as the BTCUSD pair trading above the 50 and 100-day MA. Support for BTCUSD stands now at $8,000 while the next support level stands at 7,500. On the upside, first resistance will be met at 9,925 high and then at 10,000 round figure. Ethereum (ETHUSD) trades 2.32% lower at 185.24 with capitalization now at 20.34 billion.

On the upside resistance for ETHUSD stands at $200 recent high while the support stands at $117.09 the two-week lows. XRPUSD is 1.65% lower at 0.2501. Litecoin (LTCUSD) is trading 3.65% lower at 67.01. The crypto market capitalization is $254.81 billion.

In the Lookout: Japan Monetary Base (YoY) came in at 2.9%, below forecasts of 3.1% in January. 

New Zealand Building Permits s.a. (MoM) came in at 9.9%, topping expectations of -0.3% in December. 

The People’s Bank of China has set the Yuan reference rate at 6.9779 versus the previous settlement at 6.9249. 

Trading Perspective: In the fx market, the US dollar index (DXY) trades 0.13 per cent higher at 97.94, the EURUSD is 0.15% lower at 1.1043. The AUDUSD pair is 0.45% higher at 0.6721 after the RBA kept interest rates unchanged. NZDUSD trades 0.01% higher at 0.6461. USDCHF pair is 0.36% higher at 0.9692.

AUDUSD Daily Chart

GBPUSD trades 0.15% higher at 1.3009 on renewed hard Brexit fears after PM Boris Johnson set out tough terms for European Union talks. Last week the Bank of England kept interest rates unchanged. The first support for the British pound against the US dollar now stands at 1.2578 low which if broken, might push the GBPUSD pair further down towards 1.20. On the upside, first resistance stands at 1.3511 recent high.

EURUSD trades 0.14% lower at 1.1044 as the pair’s momentum has turned now neutral. The EURUSD breaks below the 100-day moving average and now buyers are in control. First resistance for the EURUSD stands at 1.1224 recent high. On the other hand, support is at 1.1058 today’s low and then at 1.10.

USDJPY is trading 0.42% higher at 109.12, having hit the daily low at 108.54 and the daily high at 109.13. USDJPY will meet support at 105.43 the August low. On the upside, initial resistance for the USDJPY now stands at 110.28 January high.

USDCAD trades 0.04% lower at 1.3279, after the Bank of Canada last week kept interest rates unchanged. The USDCAD pair will meet first support at 1.2950 the recent low while the next support level stands at 1.29 round figure. On the flip side, resistance will be met at the 1.3066 the high from December 31st