Euro & industrials lead rebound

Adam Button AshrafLaidi.com

A new record daily increase in the number of Covid19 inflections and resurfacing political US-China tensions did not stop US indices from rebounding with the exception of NASDAQ, which is the only loser of the main 3 indices after Facebook and other info tech firms lost advertizers. (More market levels below). The weight of growing coronavirus cases sparked risk aversion on Friday and it's tough to envision anything changing in the near-term. DOW30 leads with 1.4% higher vs NASDAQs -0.4%. EUR is the strongest currency of the day and GBP is the weakest. CFTC FX positioning showed more bets on the yen (more below).

US virus cases rose another 1.7% on Sunday, above the 1.5% average. But it's a few hotspots that are concerning the market. Florida, Texas, Arizona and California all hit records in the past week and high frequency data is increasingly showing fewer restaurant visits and hours worked in those states, which collectively represent almost one-third of US GDP. Formally, governors re-closed bars in Florida and Texas and cut restaurant capacity.

The mood on Friday slowly soured and that resulted in a 2.4% decline in the S&P 500 with a close below the 200-dma.

Today, DAX attempts to regain its 200-DMA of 12152, DOW30 manages to protect the 24070 base support (backed by 248300 confluence of 55 and 100 DMA) and XAUUSD remains underpinned at 1754, eyeing 1790.

In the FX market, the reaction has been uneven. Risk trades in commodity currencies are playing out more clearly but elsewhere quarter and month-end flows are a factor. GBP is also suffering on the risk trade but Brexit news and a potential COVID-lockdown in Leicester are compounding worries.

Note that China was on holiday late last week but is back to start the new week.

CFTC Commitments of Traders

Speculative net futures trader positions as of the close on Tuesday. Net short denoted by - long by +.

EUR +118K vs +117K prior

GBP -19K vs -16K prior

JPY +27K vs +22K prior

CHF +1K vs +2K prior

CAD -21K vs -25K prior

AUD -5K vs -7K prior

NZD 0K vs -2K prior

After big moves into AUD and EUR last week, the shifts were much smaller in the last data. The lone notable shift was into JPY.

Author

Adam Button

AshrafLaidi.com

Adam Button has been a currency analyst at Intermarket Strategy since 2012. He is also the CEO and a currency analyst at ForexLive.

EUR/USD holds firm near 1.1850 amid USD weakness

EUR/USD remains strongly bid around 1.1850 in European trading on Monday. The USD/JPY slide-led broad US Dollar weakness helps the pair build on Friday's recovery ahead of the Eurozone Sentix Investor Confidence data for February.

GBP/USD holds medium-term bullish bias above 1.3600

The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback.

Gold remains supported by China's buying and USD weakness as traders eye US data

Gold struggles to capitalize on its intraday move up and remains below the $5,100 mark heading into the European session amid mixed cues. Data released over the weekend showed that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Fed expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.

Cardano steadies as whale selling caps recovery

Cardano (ADA) steadies at $0.27 at the time of writing on Monday after slipping more than 5% in the previous week. On-chain data indicate a bearish trend, with certain whales offloading ADA. However, the technical outlook suggests bearish momentum is weakening, raising the possibility of a short-term relief rebound if buying interest picks up.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.