Asian shares and stock markets around the world remain under pressure as investors panic about the deadly coronavirus spreading in Shanghai China and will impact global growth. China reported 1,272 new COVID-19 cases during the past 24 hours, While on Tuesday, the Chinese share slightly recovered after Shanghai started easing its lockdown in some areas. The recent strong bearish momentum is also driven by a bigger-than-expected inflation figure from China added to concerns over the country’s ongoing battle against Covid-19.
US futures trade near the weekly lows ahead of March US inflation data. The CPI is expected to report an 8.4% annual increase, which is all set to mark the highest inflation in the US in decades. Wall Street closed sharply lower on Monday; technology companies led a broad slide in stocks Monday on Wall Street.
Crude oil futures rebounded from the previous session's losses, but the overall momentum remains bearish hurt by continued demand worries amid lockdowns in China. During the previous session, the oil prices ended lower as investors awaited details on further EU sanctions on Russian oil.
In the currency market, the EURO plunged to a fresh weekly low, the currency pair affected by Eurozone growth concerns. Meanwhile, the US dollar index extended gains and the greenback may gain more bullish momentum in case of a positive CPI report during the US session today.
The safe-haven metal trade flat on Tuesday as traders took a cautious stance ahead of the release of US inflation results. On Monday, the metal rose to a fresh monthly high of $1968 driven by geopolitical tensions and the prevailing concerns over rising inflation.
On the data front, the UK's gross domestic product inched up 0.1% in February following a 0.8% growth in January, the Office for National Statistics said. UK Manufacturing production fell 0.4% in February, compared to market expectations of a 0.3 percent increase.
Moving ahead today, the important events to watch:
Germany – Zew economic sentiment: GMT – 09.00
US – CPI: GMT – 12.30
Worldwide, more than 499 million people have been confirmed infected and more than 6.18 million have died. The United States has confirmed over 80 million cases and has had more than 985,000 deaths from COVID-19, the highest total in the world.
Technical Outlook and Review
EURUSD: The currency pair trades below 1.0870. In the short-term, if the bearish momentum continues the next downside levels to watch 1.0840 and 1.0810. On the flip side, the immediate resistance is at 1.0900 and then 1.0940.
The important levels to watch for today: Support- 1.0840 and 1.0810 Resistance- 1.0900 and 1.0940.
GOLD: For today, the first resistance is located around $1965, a break above this level will confirm a possible move to $1970/80. On the downside, any meaningful pullback now seems to find some support near the $1945 zones, below which the slide could further get extended towards the $1930/26 region.
The important levels to watch for today: Support- 1945 and 1930 Resistance- 1965 and 1974.
Quote of the day - “Only enter a trade after the action of the market confirms your opinion and then enter promptly” - Jesse Livermore.
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