Daily update on the Coronavirus: ailment continues to spread, there are 5,974 infected cases in China and at least 132 deaths. The number of infected cases has beat the number of SARS cases which were 5,327 in 2002-2003. There are about 60 cases reported outside of China. About 60 million people are on travel lockdown in the central province of China.
The HSI Hang Seng Index opened with a gap down by -2.82% from Friday January 24th close. The index is at its lowest level since November 2019.
Gold is trading slightly lower at 1571.50 per troy ounce. Gold is at the highest levels since 2013 and the price is currently at a strong level of resistance which acted as support in 2011-2013. When the financial market is unstable and uncertainty and panic grapples investors, Gold is the safest of havens and Gold certainly has potential to rise towards 1611 and higher.
Brent oil is showing a slight recovery and trading back within its comfortable range around $60 per barrel. Over the course of 5 days from January 20th till January 27th Brent lost -9.52%. The markets are fearing a slowing in demand. We need to see if China is able to start its normal operating on Monday February 3rd following a week’s extension in New Year holidays to help contain the spread of the virus.
EUR/USD on a Daily TF reached our support target at 1.10, where the price is currently trading. Yesterday’s U.S. CB consumer confidence for January was reported above forecast at 131.6 above 128.0 forecast. Durable Goods Orders were mixed, with Core Durable Goods Orders for December slightly below forecast at -0.1%, below 0.2% forecast. The previous fact was revised down from -0.1 to -0.4%. Durable Goods Orders on the other hand came in at 2.4% well above the 0.4% forecast and -3.1% previous fact, also revised down from -2.1%.
This morning, the Gfk German Consumer Climate Index was released at 7am GMT. The release was above forecast at 9.9, but as the European trading session opened the United States dollar experienced bullish momentum, the Dollar index is making another attempt at breaking above 98.00 resistance, currently trading around 98.11.
Polish GDP YoY has dropped to 4.0% from 5.1% previously.
Today’s main agenda is the Federal Reserve meeting, to take place this evening at 7pm GMT. We’re not expecting any changes to monetary policy at this time and most policy makers forecast no changes in 2020. The problem now is that there is no full understanding of the full impact the Coronavirus is going to have on the financial markets. We advise paying close attention to the FOMC Press Conference that will follow at 7:30pm GMT. The press is likely to ask important question including, if there have been any changes to U.S. economic outlook and how will the Coronavirus influence their forecasts.
Technically: MACD is bearish, Parabolic SAR bearish. RSI is nearing the oversold area, currently at 33.50.
Resistance: R1 1.10150, R2 1.10300, R3 1.10500
Support: S1 1.09812, S2 1.09643, S3 1.09403
GBP/USD on a Daily TF continues to trade bearish. Like we mentioned yesterday, the United States were not happy to hear that the United Kingdom is giving Huawei access to their 5G network. Prime Minister Johnson says that with this deal the United Kingdom can have the best of both worlds – access to cutting edge technologies while safeguarding privacy.
Technically: The price is still being supported by 48EMA. MACD bearish histogram has increased. Parabolic SAR is pointing down.
Resistance: R1 50% Fibo 1.31675, R2 1.32500, R3 1.33327.
Support: S1 1.29500, 38.2% Fibo 1.28821, S3 200EMA 1.28231.
USD/JPY on a Daily TF is showing some recovery, driven by USD strength and waiting for further information on the Coronavirus.
Technically: The price could not remain below 200EMA that coincides with 23.6% Fibo. The price reached our first resistance target at 109.250 and currently trading slightly below the 48 EMA at 109.098. MACD bearish histogram is increasing and Parabolic SAR pointing down.
Resistance: R1 109.270, R2 109.490, R3 109.650.
Support: S1 108.912, S2 108.607, S3 38.2% Fibo 108.423.