The only releases on the economic calendar today are from the United States. At 3:30pm we have the release on Core Durable Goods Orders for December and at 6pm the CB Consumer Confidence for January. The coronavirus remains the biggest market mover. The death toll rose to 106 overnight. China is building 2 new hospitals at an amazing pace to accommodate the ill, the doors of which are due to open on February 5th.
One big concern is that the incubation period for the virus can last up to 14 days during which the infected person shows no symptoms. It is unclear at this time if the virus can spread during incubation.
Travel and tourism industries have been hit the hardest. Carnival Corp and Royal Caribbean Cruises Ltd. cancelled 9 trips that were scheduled to depart from China from January 25th until February 4th with promises of full refund to clients.
The Chinese financial market will remain closed until next Monday following an extension of the Lunar New Year holiday to help curb travel and consequently the spread of the virus.
EUR/USD on a Daily TF is trading right at the support target of 1.10152. The MACD bearish histogram is increasing. The MACD line and signal line are wide apart and crossing the histogram to the downside. The Parabolic SAR is pointing down along with 9 and 48 EMAs.
Resistance: R1 1.10294 R2 1.10500, R3 61.8% Fibo 1.10798,
Support: S1 1.10, S2 1.09812, S3 1.09564.
GBP/USD on a Daily TF is having a fourth consecutive bearish day although the price is still in a somewhat flat range between the 9 EMA as resistance and 48 EMA as support. Prime Minister Boris Johnson is going to make a decision today on whether to work with Tech giant Huawei by providing access to the U.K. 5G network. President Donald Trump will probably voice his displeasure especially since the United Kingdom and the United States want to start negotiating a trade deal after Brexit.
Technically, there is the beginning of a bearish histogram on the MACD and the beginning of a bearish Ichimoku Cloud, but the price is currently inside the cloud. The Parabolic SAR is pointing down. It’s better to wait for the price to exit the Ichimoku Cloud before opening trades.
Resistance: R1 50% Fibo 1.31675, R2 1.32500, R3 1.33327.
Support: S1 1.29500, 38.2% Fibo 1.28821, S3 200EMA 1.28210.
USD/JPY on a Daily TF is trading flat but slightly below the 23.6% Fibo and 200 EMA, around 108.850. The MACD bearish histogram has increased, the Parabolic SAR is pointing down along with 9 and 48 EMAs. If the virus outbreak worsens, it’s possible for USD/JPY to extend further loses.
Resistance: R1 109.250, R2 109.450, R3 109.688
Support: S1 108.607, S2 108.423, S3 38.2% Fibo 108.053.