Asian stocks edged higher as the market started to price-in a global recovery and more countries reopen their economies. In China, the A50 index rose by 95 basis points while the Hang Seng jumped by more than 2%. In Australia and Japan, the ASX 200 and the Nikkei rose by 1.20% and 1.60% respectively. Still, market participants are worried about a new wave of coronavirus infections in South Korea, Germany, and China. In South Korea, the number of new infections rose by 34 while the number of new cases in Germany rose slightly.
The British pound rose slightly against the US dollar even as the number of shorts in the currency increased. Data released by the CFTC on Friday showed that more speculators in the futures market had increased their bearish exposure to 12,000 in the previous week. This was the highest number this year and it signals that more hedge funds and “non-commercial” participants are worried about the UK economy. The number of new cases and deaths has continued to increase in the country and the June 30th deadline on Brexit is fast approaching.
The price of crude oil declined slightly even as the US continued to slash its rig counts. According to Baker Hughes, US rig counts fell for the ninth straight week as oil producers continued to suffer from low oil prices. The rig count declined by 34 to a record low of 374 in the week to May 8. Just last year, the number of active rigs was above 800. According to Baker Hughes, US drillers have slashed an average of 52 rigs per week. As oil prices remain low, analysts expect the rig counts to remain at historic lows as drillers wait and see.
EUR/USD
The EUR/USD pair rose slightly to a high of 1.0850. On the hourly chart, the price is slightly above the 38.2% Fibonacci retracement level and slightly above the 50-day and 25-day exponential moving average. The pair has also formed a head and shoulders pattern, with the head being at Friday’s high of 1.0875 and the current price being the right shoulder. The pair may attempt to retest Friday’s high and the 50% Fibonacci retracement level of 1.0875.
XBR/USD
The XBR/USD pair declined slightly as the market continued to worry about demand as a new wave of coronavirus started in several countries. On the hourly chart, the price is slightly above the 61.8% Fibonacci retracement level. It is also above the short- and longer-term moving averages while the overall trend has been bullish. The pair may continue rising today as bulls attempt to move above last week’s high of 32.00.
GBP/USD
The GBP/USD pair rallied today to a high of 1.2436. On the hourly chart, the price is between the 50% and 38.2% Fibonacci retracement level. It is also along a strong upward trend that started on Thursday last week. The price is also above the 50-day and 25-day moving averages while the RSI is still below the overbought zone of 70. The pair may attempt to rise as bulls attempt to test the 1.2500 resistance level.
