Global equity bulls were injected with a renewed sense of inspiration on Tuesday after the Federal Reserve deployed measures to soothe markets and support businesses hit by the coronavirus pandemic.
Although this move may revive investor confidence and even lift global sentiment, the resurgence of coronavirus cases in China and parts of the United States will most likely dampen the positive mood. With risk aversion likely to make an unwelcome return on coronavirus fears and global growth concerns, safe-haven assets such as the Japanese Yen, Dollar and Gold are set to shine through the chaos.
USDJPY remains in a 100 pip range
A lack of appetite for the Japanese Yen has sent the USDJPY punching above 107.60 this morning.
However, the currency pair remains in a wide range on the daily charts with support at 107.00 and resistance at 108.00. A solid daily close above 108.00 may inspire an incline towards 109.40. Alternatively, if 108.00 proves to be a reliable resistance level, the USDJPY may sink back towards 107.00 and 105.90.
Dollar Index eyes 96.00…
As the market mood improves on the Federal Reserves’ support, appetite for safe-haven assets such as the Dollar may wane.
The Dollar Index is under pressure on the daily charts with prices trading around 96.25 of writing. A breakdown below 96.00 may open a path towards 95.00 in the short to medium term. Alternatively, a breakout above 97.15 may trigger an incline towards 97.80.
Commodity spotlight – Gold
Gold remains in a very wide range on the daily charts with support at $1670 and resistance at $1765.
Expect the precious metal to remain rangebound until a fresh directional catalyst is brought into the picture. If prices are able to keep above $1715, Gold could push towards $1765. Alternatively, a breakdown below $1715 could drag the precious metal towards $1670.