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Market Wrap
Market sentiment remained fragile during the US trading session as fears over rising COVID-19 cases kept the major US indices under pressure. Retail and leisure related stocks in the United States remained broadly pressured over lockdown fears and further supply chain shutdown worries.
The US dollar currency remained well-bid after US weekly jobless claims came in at 348,000, which was well below market expectations, and also the four-week average for this closely watched jobs metric.
Falling jobless claims is good news for FED hawks as it makes the case for QE tapering much easier for them to justify and thus kept the overall bid-tone in the buck which has been so prevalent since the FOMC meeting minutes.
Still, the Philadelphia FED manufacturing survey came in much softer at 19.4, and largely kept up with the recent soft economic data points coming from the US. It appears that jobs remain the only bright spot right now for the US economy.
The US dollar continued to make gains against the British pound currency, with the GBPUSD pair dropping to a new monthly trading low, close to the 1.3650 support region. The EURUSD pair fared slightly better, although it is still struggling to get above the 1.1700 resistance level.
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In terms of the US dollar index technical, the action was centred around the March high, close to the 93.40 area. This is the head of the large head and shoulders pattern and the breakout area that traders are watching.
Bitcoin has started to show a correlation with the broader market, i.e stocks and gold. Bitcoin fell back towards the $44,000 level and has largely been tracking risk moves and the S&P 500 this week, however, the top coins is starting to catch a bid and is headed back towards its 200-period moving average on the one-hour time frame.
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Closer to home, the FTSE 100, German DAX, and CAC 40 have suffered heavy losses today. The notion that China COVID-19 cases are rising, alongside taper, proved just too much and the multi-week up move in European stocks has been stopped in its tracked today.
Crude oil and Brent oil are not showing any signs of finding meaningful support, and so far today the decline has reached nearly $62.00 in Crude, and for Brent the $66.00 level has been the major low.
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