Market update
The coronavirus continues to drive markets, and has business activity in China near a standstill. With China’s streets, restaurants and flower markets bare, a miserable Valentine’s Day is expected on Friday.
Yesterday, the Chinese province at the center of the coronavirus outbreak reported a record rise in deaths and thousands more infections using a broader definition of ‘infected’, while Japan became the third place outside mainland China to suffer a fatality. Here is a look at some key markets.
US dollar: The $US has been trading in a steep uptrend channel. Note on the bottom of the chart the Relative Strength Index (RSI) shows the $US is getting overbought.
Euro: The Euro has been in a steep downtrend channel, taking out a number of support levels recently. Note that RSI is indicating the Euro is oversold. Most investors ignore currencies, which is a huge mistake.
Canadian dollar: The loonie is trying to gain momentum after its big decline since the start of the year.
Shanghai Market: After major sell-off once coconavirus was confirmed, the SSEC had a solid rebound after being quite oversold. Today’s news of an increase in deaths and infections pushed Chinese markets lower.
US S&P 500: In addition to the coronavirus we saw US regulators charge Huawei and two of its subsidiaries with federal racketeering and conspiracy to steal trade secrets from American companies, a significant escalation in the Trump administration’s legal fight with the Chinese telecommunications company. Concerns over the apparent spread of the coronavirus held stocks back, leaving the S&P 500 down 5.521 points. Currently trading just above its near-term uptrend channel.
Canada TSX: The Canadian market chart looks very much like the S&P 500, trading in it near-term uptrend channel. Note a bottom of chart, the RSI is getting close to being overbought, so a pull back soon would not be a surprise.
Gold: Gold has been struggling to continue its near-term uptrend channel. Its recent high at 1587 sits right on a Key Resistance level. Gold needs to break through 1600, to gain momentum.
Oil: Oil closed up slightly and is trying to form a bottom at just under 50.00. A break below that support level could see oil push much lower.
Stay tuned!