Risk sentiment remains steady despite virus-related confusion. US macro data to provide short term trading cues.
Summary: Major indices and equities in the global market are seeing positive price action in the global market today albeit several indices continuing to trade in red as investors hope for government officials to take appropriate measures for the coronavirus outbreak.
While positive price rally in the global market took a pause yesterday over the news of escalating death toll, traders continue to displ+ay stable risk appetite in the last trading session of the week as the fresh victim count for virus outbreak seems to be very low.
Following positive activity in Asian markets, European markets also opened on a positive note but gains were capped as Euro area preliminary GDP showed signs of economic activity slowing down in line with expectations. However, major indices still traded near record levels as support from better than expected employment data and broad-based risk sentiment kept market bulls underpinned.
In the forex market, USD remained firm supported by cautious tone in the market and update from NY Fed stating that it will cut the volume of its open market operations slightly ahead of schedule which signaled scenario where liquidity tightens in US funding markets. Amid mixed investor sentiment and firm USD major global currency pairs traded with slight dovish bias.
Precious Metals: Rare metals traded well within familiar price levels today with positive bias prevalent across the day on lingering caution tone in the global market. But firm USD in the global market and healthy risk sentiment kept gains of rare metals in check.
Crude Oil: Crude oil price is seeing positive activity in the global market today as broad-based risk sentiment and positive economic growth outlook provides some level of support for crude oil bulls. The possibility of deeper supply cuts from OPEC also provided Crude oil price with fundamental support.
AUD/USD: The pair is trading flat post easing up early gains as cues from dovish Chinese GDP data took the wind out of AUD bulls underpinned by broad-based risk appetite. Firm USD in the global market also weighs down the pair but strong support around 0.6700 handle keeps further declines in check.
On The Lookout: As the last trading session for the week comes into play, traders focus on local headlines and data updates for short term profit opportunities. Confusion surrounding virus outbreak death toll and victim count keeps some level of caution underplay. But broad-based risk sentiment remains firm as traders hope the government to take appropriate measures to ensure virus outbreak remains contained.
Later in the day in US market hours, traders await the release of US retail sales data and earnings report from Pacific Gas & Electric, PPL & NetEase for short term profit opportunities and directional bias.
Trading Perspective: US Stock futures trading in the international market saw positive activity as cues from better than expected Nvidia earnings and positive investor sentiment underpinned market bulls. Positive forecasts for retail sales data also suggest positive fundamentals hinting at an upbeat opening in Wall Street today. However, weekend profit booking activity could skim off intra-day gains while major indices close on a positive note for the week.
EUR/USD: The pair continues to trade with dovish bias as price tests 2020 lows and trades in a loop around 1.0830-20 price levels. Further declines are capped on better than expected employment data in the EU area while firm USD also adds to EURO’s weakness. Traders await US retail sales data for short term profit opportunities.
GBP/USD: The pair continues to trade positive as GBP bulls remain supported by momentum from the replacement of Chancellor of the Exchequer. Broad-based risk sentiment also underpins GBP bulls but firm USD caps gains. Traders now await US retail sales data for short term profit opportunities.
USD/CAD: The pair continues to decline despite firm USD in the global market as CAD remains underpinned by multiple factors. Risk on sentiment and positive crude oil price in the global market outweigh safe-haven demand fuelled USD providing CAD with the strength to maintain rally in its favor. Traders now await US retail sales data for short term profit opportunities.
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