Asian stocks rebound today on monetary stimulus hopes amid the coronavirus outbreak. A slump in the economic activity due to the coronavirus spread in over 50 countries around the globe has led global stocks to lose over 10% in the previous week.
Wall Street major indices entered correction territory, while crude oil price slumped as the global demand drops. Bank of Japan and Fed signalled a policy response on Friday while Italy will inject more than 3.5 billion euros in the already battered economy.
The Nikkei 225 ended 0.95% lower at 21,344. The Shanghai Composite index closed 3.15% higher at 2970. The Singapore FTSE Straits Times closed down 0.11% at 3007. Hang Seng in Hong Kong ended 0.62% higher at 26291. The ASX 200 benchmark hit the lowest level in nine months, giving up 0.77% at 6391.
European stocks started higher the week. The German DAX is 0.03% higher at 11,895. CAC40 index is 0.34% higher at 5,291, while the FTSE MIB in Milan is 2.04% lower at 21,535. In London, the FTSE 100 is 0.97% higher at 6,643.
In the commodities markets, crude oil also rebound today, the WTI crude oil is 1.70% higher at $45.52. Brent oil is 0.63% higher at $50.41 per barrel. Gold’s price also rebound today after Friday’s sell-off. The precious metal is 1.50% higher at 1609. The gold outlook is bullish, and the first resistance will be met at $1,689, the recent high, while the support stands at $1,600 the recent low. Silver price is 3.34% lower at $17.15.
Cryptocurrencies started the week in positive territory trying to stabilize after the recent correction. Bitcoin (BTCUSD) is 2.44% higher at $8,728, hitting the daily low at $8,470 and the daily high at $8,752. Bitcoin’s momentum is neutral now as the number one cryptocurrency is trapped between the 50 and 100-day moving average.
Support for Bitcoin stands now at $8,400, the low from yesterday’s trading session. On the other hand, the first resistance stands at 8752, the daily high and then at 10,495 the yearly top.
Ethereum trades 3.30% higher at 224.51 with capitalization at 24.72 billion. The initial resistance for Ethereum stands at $274.18, February high while the first support stands at $213.47 the February low. Ripple is 3.28% higher at 0.2339. Litecoin (LTCUSD) is 3.89% higher at 59.90. The crypto market capitalization stands now at $250.70 billion.
In the Lookout: The New Zealand Terms of Trade Index came in at 2.6% above expectations (0.8%) in 4Q.
Australia RBA Commodity Index SDR came in at -6.1% below the forecasts of -5.9% in February.
The South Korea Trade Balance increased from the previous $0.54B to $4.12B in February.
Trading Perspective: In the foreign exchange markets, the Aussie dollar is 0.33 higher at 0.6528 against the USD. The US dollar index is 0.45% lower at 97.59. NZDUSD trades 0.20% higher at 0.6257. The USDCHF pair is 0.68% lower at 0.9590.
GBPUSD Lower After Weaker UK Manufacturing PMI
GBPUSD is under selling pressure and trades 0.50% lower at 1.272 after the weak manufacturing PMI from the UK. The United Kingdom Manufacturing PMI came in at 51.7 below the market forecasts of 51.8 in February. The British pound is under selling pressure the last two weeks as the UK authorities keep a hard stance on trade talks with the EU, stating that they were willing to operate without an agreement if they don’t achieve one in the next four months.
On the technical side, the first support for the GBP against the USD now stands at 1.28 low which if broken, might push the pair down towards 1.27. On the upside, the first resistance for GBPUSD stands at 1.32 and then at 1.3511 recent high.
EURUSD Higher Amid Interest Rate Cut Expectations
EURUSD trades 0.73% higher at 1.1110 as investors increase bets that the Federal Reserve will proceed with an interest rate cut in the upcoming policy meeting. Euro is also getting better manufacturing PMI’s from Germany and from the European Monetary Union.
EURUSD’s technical outlook is positive now as the pair today breached above the 200-day moving average. A credible close today above the 200-day moving average will give bulls the upper hand for the short term.
On the technical side, immediate resistance for the EURUSD pair will be met at 1.1224, the yearly high. On the other side, the first support is at 1.1035 today’s low and then at 1.10.
USDJPY is trading 0.37% lower at 107.55, having hit the daily low at 107.35 and the daily high at 108.57. The USDJPY pair will meet the first support at 105.43 the low from August 2019. On the flip side, resistance for the USDJPY pair now stands at 112.18 the previous week high.
USDCAD is 0.26% lower at 1.3378 amid USD weakness across the board and an increase in crude oil price that supports the Canadian loonie. The USDCAD will meet first support at 1.30 the recent low while the next major support stands at the 1.29 mark. On the upside, strong resistance will be met at 1.3300.
