Gold At Seven-Year Highs, Stocks Retreat Further

Nikolas Papas

Nikolas has been involved in the finance industry for over fifteen years spanning across Europe and USA with a depth of knowledge and experience within many aspects of the financial markets. Nikolas gained several years experience with some of the Europe’s leading Brokers, as equity analyst, and trader managing accounts for both Private and Corporate Investors. He enjoys both the fundamental and technical aspects of trading focusing on stock markets and all FX majors. Currently Nikolas provides analysis and comments to online financial publications. Educational background in Economics (BSc), and Finance (MSc).

Gold Bar

Gold At Seven-Year Highs, Stocks Retreat

February 22, 2020

Asian stocks finished lower as coronavirus fears resurfaced after South Korea report 52 new cases. Gold at seven-year highs as signs that the coronavirus outbreak might be under control in China and liquidity injections from PBOC improved investors sentiment.

People’s Bank of China cut the one-year loan prime rate by 10 bps to 4.05% from 4.15% and the five-year rate by 5 bps to 4.75% from 4.80%. China has confirmed over 75,000 cases, with the death toll rising to 2,236. Monetary and fiscal stimulus from central banks and governments has continued to drive stock prices higher. 

The Nikkei 225 index finished 0.39% lower at 23385. The Hang Seng ended 1.07% lower at 27312. The Singapore FTSE Straits Times is 0.10% lower at 3194. The Shanghai Composite index closed up 0.31% at 3039. The ASX 200 index in Australia ended 0.33% lower at 7139. 

European stocks trading lower in early trading. The German DAX is 0.13% lower at 13,773. CAC40 index is 0.17% lower at 6,099, while the FTSE MIB in Milan is 0.47% lower at 25,357. In London, the FTSE 100 is 0.01% higher at 7,457.  

Seven-Year Highs
XAUUSD Daily Chart

In the commodities markets, crude oil trades lower today amid the coronavirus fears. WTI crude is 0.97% lower at $53.53. Brent oil is 0.58% lower at $58.70 per barrel. Gold price makes fresh seven-year highs, at 1,634. The gold outlook is bullish as the gold trades above all crucial daily moving averages. Immediate resistance will be met at $1,635 the recent high, while the support stands at $1,600 the recent low. Silver is 1.01% higher at $18.53.    

Cryptocurrencies managed to rebound in Asian trading session. BTCUSD is 0.05% higher at $9,600 hitting the daily low at $9,457 and the daily high at $9,725. Bitcoin momentum is positive, as bitcoin is trading above all significant daily moving averages. Support for BTCUSD stands now at $9,457 while the next major support stands at 9,000. On the upside, resistance stands at 10,495 yearly top and then at 10,800 round mark.

Ethereum trades 0.29% lower at 257.82 with capitalization at 28.43 billion. On the upside, immediate resistance for ETHUSD stands at $274.18 recent high while the first support stands at $213.47 the February low. XRPUSD is 1.43% lower at 0.2708. Litecoin (LTCUSD) is 0.69% lower at 70.18. The crypto market cap capitalization is now at $279.08 billion.

In the Lookout: Australia Manufacturing PMI came in at 49.8 topping forecasts of 48.9 in February. The Australia Services PMI came in at 48.4, below the forecasts of 52.4. The Composite PMI came in at 48.3 in February from previous 50.2. 

Trading Perspective: In the forex market, the US dollar index is 0.18% lower at 99.70. The AUDUSD is 0.28 lower at 0.6595 pressured by weak economic data. NZDUSD trades 0.32% lower at 0.6310. USDCHF pair is 0.21% lower at 0.9821.

Seven-Year Highs
AUDUSD Daily Chart

GBPUSD trades 0.45% higher at 1.2940. The initial support for the GBP against the USD now stands at 1.28 low which if broken, might push the GBPUSD pair down towards 1.25. On the upside, initial resistance for GBPUSD stands at 1.32 and then at 1.3511 recent high.

EURUSD trades 0.16% higher at 1.0801 as the pair’s outlook is bearish. EURUSD broke below the 100-day MA and now sellers are in control. Immediate resistance for the EURUSD pair will be met at 1.1224 the yearly high. On the other hand, the first support is at 1.0782 today’s low and then at 1.0750.

USDJPY is trading 0.23% higher at 111.82, having hit the daily low at 111.48 and the daily high at 112.18. The USDJPY will meet first support at 105.43 the August low. On the upside, resistance for the USDJPY now stands at 112.18 the daily high.

USDCAD is 0.03% higher at 1.3260. The USDCAD will meet first support at 1.30 the recent low while the next major support level stands at 1.29 round figure. On the other side, resistance will be met at 1.3300. 

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