Global stocks were little moved today after doubts emerged about the efficacy rate of the vaccine developed by AstraZeneca and Oxford University. In their report, the two institutions said that their vaccine was 70% on average. When given half a shot, the efficacy rate jumped to 90%. In a statement yesterday, the leader of the Operation Warp Speed, which funded the study said that the dose showing the better rate was given to younger people. The new concerns mean that the company may need to conduct another trial. This will lead to delay, especially for developing countries that can’t afford the expensive vaccines by Pfizer and Moderna.
The British pound declined slightly as traders reacted to the alarming statement by Chancellor Rishi Sunak. In his speech to parliament he warned that the country’s economy will continue to struggle in the next few years. He expects the rate of unemployment and government borrowing to continue rising. Also, he failed to rule out higher taxes to finance his ambitious agenda. Analysts believe that he will need to raise about £30 billion before the next election. Some of the taxes he could raise include income taxes, value-added tax, and national insurance.
Digital currencies declined sharply today with Bitcoin falling by more than 1,978 points. Ethereum and Ripple have also fallen by more than 20% in the past 24 hours. Analysts cited the decline to profit-taking after the currencies tested multi-year highs. Also, the decision by Coinbase to abandon its margin trading service led many to lose confidence in the currencies. The company said that the decision was because of a rule by the CFTC. Also, in the UK the FCA barred companies from offering crypto derivatives to retail traders.
The FTSE 100 index declined by more than 0.50% because of the negative vaccine news. The index is trading at £6,350, which is below this week’s high of £6,475. As it dropped, it moved below the 25-day moving average and is now on the same level as the 50-day EMA. The index has also formed a twin peak pattern that is shown in red. It is also along important support shown in orange. Therefore, a move below the current support will be bearish and a signal that the index could test the support at £6,250.
The EUR/USD pair dropped to an intraday low of 1.1905 from yesterday’s high of 1.1940. On the four-hour chart, the price is still above the ascending yellow trendline while the accumulation/distribution indicator has continued rising. It is also between the two lines of the envelopes indicator while the Chaikin oscillator has moved below the neutral line. Therefore, with the volume being low today, the price is likely to remain in the current range.
The GBP/USD pair dropped to a low of 1.3350. On the four-hour chart, the pair is forming an ascending triangle pattern, with its resistance level at 1.3398. The pair is also being supported by the ascending yellow trendline and the 25-day moving average. The Relative Vigour Index (RVI) is also above the neutral line. Therefore, for today, the pair will likely remain in the current range.
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