On Monday morning, the stock markets and all risky assets began to fall rapidly. This may have been a surprise for many, but it was definitely not for subscribers to our daily newsletter.
As expected, AUD/JPY pair worked best in panic conditions (chart below). Oil also declined, while gold rose.
Chart of the day AUD/JPY
Will the markets continue to fall? This is the main question that interests everyone. Now everything depends on the situation with the coronovirus. No meetings of the National Bank, which are expected soon, are no longer of interest to investors.
What should be understood? Until the growth trend of 40%-50% infected per day is broken, there are no prospects for risky assets.
The pair came close to the most important support level 1.10. Most likely, tomorrow the it will start to test this level. The bears will try to remove the stops and partially fix the profit.
At the auction on Monday, WTI oil fell for the sixth consecutive day. Of course, at any moment we can see a slight bounce. However, it will allow the bears to enter the market at a slightly better price. Fundamentally, the situation with black gold is terrible. The sharp decline in demand for air transportation is still just beginning. The situation may become avalanche-like, when tourists will refuse to fly not only to China, but to all Asian countries.
Against this negative backdrop, Bitcoin began another phase of growth. The price is only $300 below its recent highs. There is a very significant factor, which is almost not thought about yet. What happens if China’s population gets hysterical and starts transferring some of their savings into the first crypt currency? We think an answer is not even required. Therefore, it can be extremely dangerous to short BTC in this situation, without stops.
What’s waiting for us today?
08.00 Swiss trade balance for December
14.30 US Durable Goods Orders for December
16.00 Speech by ECB representative Lane
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