US stocks had a rough day yesterday as traders focused on the disease that is spreading in China and other countries. The Dow Jones Industrial Average and the S&P500 indices declined by 453 and 52 points respectively. Energy and technology stocks were the worst-performing sectors in the index. Transport stocks also had a tough day because the disease is likely to slow leisure and business travelling. This is after the CDC urged travellers to avoid nonessential trips to China. The disease has so far killed more than 100 people, mostly in China. It has infected more than 3,000 people. More than 100 people in the United States are being evaluated for infection.
Futures tied to US stocks have risen ahead of a busy earnings day. Dow and S&P500 futures have risen by 90 and 10 points respectively. The market will receive financial reports from companies like Autoliv, Alaska Air, Xerox, PolyOne, United Technologies, PulteGroup, Lockheed Martin, 3M, Apple, eBay, Pfizer, and Xilinx. On Apple, traders will watch the growth of iPhone sales and the number of paying Apple TV+ subscribers. On Xerox, they will watch the progress of its acquisition of HP. PulteGroup will be watched because of its role in home building. Just yesterday, data from the US showed that new home sales eased in December. New home sales declined to 694k from the previous 697k.
The price of crude oil declined as the market continued to react to the Coronavirus disease. According to Financial Times, OPEC members and its allies have become so concerned that they are planning to cut production again. This is because the price of oil has eased by almost 17% after hitting a high of $70 early this month. OPEC+ has been cutting production since 2016.
XBR/USD
The XBR/USD pair dropped to a low of 57.69 after reaching a high of 70.66 early this month. The price is now at the lowest level since October last year. It is trading below the 14-day and 28-day exponential moving averages. The RSI has dropped to the oversold low of 16 while the signal line and histogram of the MACD have been dropping. The dots of the Parabolic SAR are above the price, which is a bearish sign. The pair may continue to drop as it attempts to test the support of 55.00.
EUR/USD
The EUR/USD pair dropped to an intraday low of 1.1000, which is an important support. The pair has dropped by more than 2% from its January high of 1.1240. The price is below the 14-day and 28-day exponential moving averages. The signal line of the MACD has been dropping. The signal and main line of the Relative Vigor Index are below the neutral line. The main scenario is where the pair stays near the current level, which provides important support.
AUD/USD
The AUD/USD pair has been falling after reaching a high of 0.7030 on January 2. The pair reached an intraday low of 0.6745, which was the lowest level since October 17. The price is below the 14-day and 28-day exponential moving averages. It is also along the lower line of Bollinger Bands, which is a sign of the strength of the downward momentum. The RSI is below the oversold level of 30. The pair may continue moving lower as the coronavirus disease spreads.
