The U.S. stocks sank a further 4% as market sentiment was dampened by President Donald Trump's warning of "very painful two weeks" regarding deaths caused by the coronavirus. The Dow Jones Industrial Average tumbled 973 points (-4.4%) to 20,943, the S&P 500 plunged 114 points (-4.4%) to 2,470, and the Nasdaq 100 was down 327 points (-4.2%) to 7,486.
Shares in Automobiles & Components (-7.7%), Banks (-7.09%) and Insurance (-6.3%) sectors suffered significant losses. Carnival Corp. (-33.2%), Royal Caribbean Cruises (-19.9%), United Airlines (-18.7%), and Gap (-16.3%) were among the biggest losers. With the risk-off market sentiment, the demand for safe-haven assets is taking a surge.
XAU/USD - Bullions Violates Resistances
On Thursday, gold crawled lower as the greenback remains firm. Still, declines were restricted as traders prepare for U.S. jobless claims figures, which are coming out later in the day. The figures may give us clues on how much the coronavirus is hurting the world's biggest economy.
Regarding U.S. economic data, the Automatic Data Processing (ADP) jobs report showed that the economy cut 27,000 private jobs in March (-150,000 expected). The Markit's U.S. Manufacturing Purchasing Managers' Index (final reading) posted at 48.5 (48.0 expected), the Institute for Supply Management's (ISM) Manufacturing Purchasing Managers' Index slipped to 49.1 (45.0 expected).
Whereas, Construction Spending dropped 1.3% on month in February (+0.6% expected). Later today, the U.S. Labor Department will report Initial Jobless Claims for the week ended March 28 (3.50 million expected). February Factory Orders (+0.2% on month expected) and Durable Goods Orders (final reading, +1.2% on month expected), and Trade Balance (deficit of 40.0 billion dollars expected) will also be released. Consequently, the demand for dollar increased, causing a dip in the precious metal gold.
XAU/USD - Daily Technical Levels
|
Support |
Pivot Point |
Resistance |
|
1609.72 |
1618.99 |
1628.02 |
|
1600.69 |
1637.29 |
|
|
1582.39 |
1655.59 |
XAU/USD - Daily Trade Sentiment
The technical side of the market has turned bullish as we can see gold is violating an intraday resistance level of 1,602. With this, gold opens further room for buying until the next resistance area of 1,620 and 1,633. Closing of 4-hour candle over 1,602 level will confirm bullish bias in the metal. On the lower side, immediate support stays at 1,602 and 1,595 area. Both of the leading and lagging indicators, such as RSI and 50 EMA, are confirming bullish bias in gold. Let's take a buying trade over 1,602 level today.
USD/CAD - Saudia to Increase Production
The USD/CAD currency pair hit the fresh session lows and dropped below the 1.4000, mainly due to the fresh recovery rally in the oil prices, which weakens the Canadian dollar and sends the pair lower. The recent declines in the greenback are also weighing on the pair. As of writing, the USD/CAD is currently trading at 1.4108 and consolidates in the range between the 1.4079 - 1.4196.
The pair failed to continue it's on the previous day's goodish intraday positive move, rather met with some fresh supply on Thursday and was being weighed down by a combination of adverse factors, as we already mentioned.
Fresh sharp losses in the U.S. Treasury bond yields sent the greenback lower and exerted some pressure on the U.S. dollar and forced the pair to extend the overnight rejection slide from 200-hour SMA resistance near the 1.4270 regions.
At the oil front, the oil prices recently got support from the rising hopes for a truce between Saudi Arabia and Russia in their ongoing price war. As well as, the United States President Donald Trump said during its press conference on Wednesday that he expected both producers will be able to agree within the next few days. As well as, he suggested that it will not be good for both countries. So, I think they are going to make a deal soon.
However, intensifying fears regarding the economic recession from the coronavirus pandemic and a recent decline in the U.S. Treasury bond yields capped further gains in the oil prices.
USD/CAD - Daily Technical Levels
|
Support |
Pivot Point |
Resistance |
|
1.4057 |
1.412 |
1.4229 |
|
1.3948 |
1.4293 |
|
|
1.3776 |
1.4465 |
USD/CAD - Daily Trade Sentiment
The USD/CAD is trading with a strong neutral bias, having soared to a high level of 1.4215 while the next resistance lingers at 1.4295. This resistance level is a prolonged double top pattern, and it has the potential to hold the USD/CAD pair in a selling mode. While the support lingers at 1.4175, which is given by the 50 periods EMA.
On the 4 hour chart, the USD/CAD is also facing resistance at 1.4295, which is extended by the downward trendline. In the event, the USD/CAD pair crosses upward, we may experience USD/CAD heading towards next target level of 1.4530. So let's look for opening a buying position over 1.4210 today and selling below 1.4295.
AUD/USD – Choppy Session Continues
At the opening of Thursday's European session, despite the multiple risk catalysts, the AUD/USD pair stops it's 2-day losing steak and recovered from the four-day low to above 0.6100, mainly due to the uptick in the U.S. stocks futures. The AUD/USD pair is trading at 0.6093 and consolidates in the range between the 0.6063 - 0.6120.
However, Australia's PM Scott Morrisson recently said that the virus spread is showing some signs of slowing down. Even so, the national leader indicated worries about community transmission while suggesting the return of the Parliament next Wednesday.
Moreover, the global rating giant Moody's Investors Services lowered its outlook for the Australian banking sector from positive to negative, while indicating the broad and growing possibility of economic fallout and market disruption from the coronavirus outbreak.
Earlier, Australia's first quarter (Q1) 2020 National Australia Bank (NAB) Business Confidence and Business Conditions released depressive figures. The Business Confidence data fell to the lowest since the Great Financial Crisis (GFC) while testing -11 mark against revised -2 previous while the Business Conditions also decreased from 8 last to -4.
Australia and New Zealand Banking Group (ANZ) recently appeared with the Q1 Job Vacancies for Australia. The figure dropped 0.1% QoQ and 2.2% YoY against the previous +1.2% and -1.5% respectively. Hence, the Aussie is trading with a bearish bias, and we may see more selling from it.
AUD/USD - Technical Levels
|
Support |
Pivot Point |
Resistance |
|
0.6129 |
0.6153 |
0.6195 |
|
0.6088 |
0.6219 |
|
|
0.6022 |
0.6285 |
AUD/USD - Daily Trade Sentiment
On Thursday, the AUD/USD are trading bearish at 0.6020 level, and it seems like pair may break below immediate support around 0.6025 level. Closing of candles below 0.6025 can trigger further selling in the AUD/USD pair. But in case, the market manages to stay over this level, we may see AUD/USD bouncing off until the next resistance level of 0.6100 and 0.6150.
On the lower side, the next targets are likely to be found around 0.5875 today. The RSI and Stochastics are staying under 20, which are suggesting selling trends in the AUD/USD pair. Let's place a sell stop below 0.6000 level today.
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