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This oversold market looks for a tech rebound

This oversold market looks for a tech rebound

Dollar slid against the EUR and CHF this morning against the backdrop of rising fears of a pandemic to happen in America.

In Asia, the Korean Won jumped on the Bank of Korea’s (BoK) decision to hold its rate unchanged, despite a widely-forecasted interest rate cut. Malaysian ringgit and Thai baht are riskier currencies due to recent political turbulence and the impact of Covid-19 respectively, rebounded from their recent lows, suggesting a pick-up in risk sentiment across Asia.

As most risk assets have been heavily oversold this week, the market may start to position for a technical rebound as panic recedes. US equity indices closed mixed overnight, stopping a two-day meltdown after falling more than 6%. Information technology (+0.40%) was doing the heavy lifting whereas energy (-2.97%), utilities (-0.97%) and real estate (-0.87%) were lagging.

President Trump came out to reassure the market that ‘whatever happens we’re totally prepared’, and he appointed Vice President Mike Pence to lead the government’s response to combat the coronavirus outbreak. Meanwhile, the CDC announced the first Covid-19 case of unknown origin, suggesting human-to-human transmission has probably started in the US.

Brent Crude oil price has fallen for a fifth consecutive day to US$ 53.6 area, a key support level that has been tested in early February. Technically, its trend has shown signs of oversold as RSI crosses below 30%, and DMI comes to an overstretched level.  Breaking down below US$ 54.1 will open room for more downside towards the US$ 51.2 area (200% Fibonacci Extension).

Gold price climbed for a second day to US$ 1,647 area, continuing its upward trajectory as virus uncertainty and easing monetary policy both in favour of precious metals. Technically, US$ 1,677 (100% Fibonacci Extension) is an immediate resistance level for gold, and significant selling pressure may occur if price attempts to challenge US$ 1,700.

US SPX 500 - Cash

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