U.S. stocks encountered panic selling again despite the Federal Reserve's emergency move in slashing interest rates to near zero percent, aiming to offset the economic impact of the coronavirus pandemic.
For a third time in about a week (first time on the prior Monday), the S&P 500 fell so hard (-7%) at the session open to trigger a circuit breaker that froze trading for 15 minutes.
The Dow Jones Industrial Average crashed 2997 points (-12.9%) to 20188, the S&P 500 tumbled 324 points (-12.0%) to 2386, and the Nasdaq 100 sank 974 points (-12.2%) to 7020.
XAU/USD - Choppy Sessions In Play
On Tuesday, the precious metal gold prices inched lower, following a meltdown in precious metals last session, as investors extended to sell assets beyond markets to keep their funds in cash amid intensified panic over the coronavirus pandemic.
The U.S. President Donald Trump and his coronavirus task force issued new national guidelines to stop the spread of the virus, calling on Americans to avoid gatherings of more than ten people; avoid feeding and drinking in cafes, restaurants, and public food courts; and supporting schooling from home across the country. And Trump noted that it might take until July or August for the coronavirus to be contained.
International Monetary Fund Managing Director Kristalina Georgieva announced 20 additional nations had requested about obtaining aid as the outbreak hampers economic movement, and she called for strong, coordinated fiscal stimulus to restrict the loss.
Moreover, the Japanese business confidence plunged to decade lows in March as the spreading epidemic stoked concerns of a global recession and sent stock markets tumbling, the Reuters Tankan survey revealed.
XAU/USD - Daily Technical Levels
|
Support |
Pivot Point |
Resistance |
|
1646.71 |
1669.45 |
1696.48 |
|
1619.68 |
1719.22 |
|
|
1569.91 |
1768.99 |
XAU/USD - Daily Trade Sentiment
Gold has been one of the most prominent market movers as traders still consider that the rate reduction by the Federal Reserve isn't enough to support the economic retardation caused by a coronavirus. Anyhow, the precious metal is expected to face immediate resistance nearby 1,517 regions along with support nearby 1,485 level. Breach of this section on the lower side may present further room for selling unto 1,463 and 1,451. While the bullish breakout of 1,517 mark can drive buying unto 1,532 and 1,573.
USD/CAD - Bullish Channel Breakout
The USD/CAD advanced 1.4% to 1.4003, a fresh four-year high, amid slumping oil prices. The Canadian government announced that it would close its borders to all non-residents except for U.S. residents.
The U.S. Commerce Department will post February retail sales (+0.2% on month expected) and January business inventories (-0.1% on month expected). The Federal Reserve will release February industrial production (+0.4% on month expected) and capacity utilization (77.1% expected).
The Labor Department will report JOLTS job openings for January (6.40M expected). The National Association of Home Builders will release March Housing Market Index (74 expected). Stronger figures will drive more buying in the USD/CAD currency pair during the U.S. session.
Oil prices resumed their down-trend, although President Trump pledged on Friday to fill up the Strategic Petroleum Reserve. Nymex crude oil futures slumped 9.5% to $28.70 a barrel, and Brent shed 12.0% to $29.78. Overall a dip in crude oil prices is adding further selling pressure on the Canadian Dollar, driving the bullish trend in the USD/CAD pair.
USD/CAD- Daily Technical Levels
|
Support |
Pivot Point |
Resistance |
|
1.3884 |
1.3952 |
1.4061 |
|
1.3776 |
1.4129 |
|
|
1.36 |
1.4305 |
USD/CAD- Daily Trade Sentiment
On Tuesday, the USD/CAD's bullish bias continues to drive the pair higher at 1.4112 area. As discussed previously, the USD/CAD is still keeping the bullish bias due to support, which is mostly extended by the 50 periods EMA.
On the 4 hour chart, the USD/CAD currency pair is violating the ascending channel, which is providing resistance to commodity currency pair around 1.4118. The closing of the bullish engulfing candle above the 1.3965 level is pretty much likely to drive more buying in the pair. On the higher side, the USD/CAD may find resistance at 1.4115 and 1.4250. Let's look for buying trades over 1.3952 as the RSI is also in favor of a bullish trend.
AUD/USD – Selling Trend Dominates the Market
The AUD/USD continues to trade bearish and dropped to fresh 11-years lows near the 0.6065, mainly due to moderate pick up in the greenback. The AUD/USD is trading at 0.6087 and consolidates in the narrow range between the 0.6066 - 0.6149.
However, the currency pair witnessed some fresh selling mode on the day and continued the previous session's rejection drops from the 0.6300 round-figure marks following the Fed's aggressive move to cut interest rates to zero.
It is worth mentioning that the moderate recovery in the U.S. Treasury bond yields helped to regain some U.S. dollar demand and turned out to be one of the critical factors exerting some pressure on the pair.
Whereas, the latest RBA meeting minutes confirmed that policymakers were ready to act. Alongside, the RBA minutes also indicated a move towards the bond purchases rather than any further interest rate cut, which help to extend a bit of support for the AUD/USD pair.
Traders will keep their eyes on the U.S. economic docket highlighting the release of monthly retail sales figures – may affect the USD price dynamics and provide some meaningful trading opportunities ahead.
AUD/USD - Technical Levels
|
Support |
Pivot Point |
Resistance |
|
0.6073 |
0.6129 |
0.6179 |
|
0.6023 |
0.6235 |
|
|
0.5917 |
0.6611 |
AUD/USD - Daily Trade Sentiment
The AUD/USD is trading bearish at 0.5990, maintaining a bearish trend for seven consecutive trading days. The AUD/USD fell dramatically from 0.6100 level to place a low below 0.6000, psychological mark.
As we can see on the daily chart, the AUD/USD is testing 0.6000, which may become a double bottom pattern if the pair manages to give us closing above this level. Traders are advised to watch this level closely as the formation of Doji candle above this level can help us capture a bullish trade until 0.6200 level. However, a bearish breakout of 0.6000 level can drive further selling until 0.5839.
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