Overnight Headlines

*US stocks suffer another day of losses, futures flat for today’s session

*USD steadied amid geopolitical concerns but improving European vaccine outlook

*Gold pushing higher aiming for $1790

US equities sustained back-to-back losses as renewed worries about rising Covid-19 cases across the globe and more lockdowns put the brakes on the reflation story. Netflix slumped 10% after hours with subscriber additions significantly below forecasts.

USD rebounded amid a mix of gains and losses versus its major peers after touching a seven-week low in Asia. Interest rates in the US moved in a tight range while the things looked better on the vaccine front in Europe. The mid-March low around 91.30 on USDX is resistance above.

Market Thoughts – Two steps forward, one step back

We highlighted some major technical and psychological levels yesterday in the majors (1.20 in EUR, 1.40 in GBP, 108 in JPY) as well as seeing trend channels tested on a number of pairs. Inevitably, it is levels like these which are the hardest to break and so the dollar demise has been halted but just perhaps delayed for the time being.

The numerous factors to induce more selling in the greenback are pretty well-known, but it is the renewed concerns about the global recovery which is weighing on markets and commodity currencies that have been flying recently. Record infections and death, notably in India and Brazil, are tough to take and it may be some time before this gets under control. Russian activity with Ukraine is also worth taking note of, as the build-up of troops by Putin gathers pace. But the global economy is bouncing back so some of those reopening sectors and the indices in general may offer potential buying opportunities.

Trade of the Day – Bitcoin holding its ground

After suffering a traumatic weekend and falling over $10k at one point on Sunday, Bitcoin has manged to claw back around half those losses this week in relatively quiet trade. While the euphoria of the Coinbase IPO seems an age ago, regulation fears continue to cast a shadow over more gains with the weekend stories about the US Treasury Department set to crack down on the digital asset space for its role in money laundering not going away.

Bitcoin has been pivoting around $55k over the past few trading sessions in a relatively narrow range compared to some of the other coins that are finding it hard to find decent support levels. Consolidation is no bad thing after recent volatility and the non-stop rise in prices. We are currently just below the 50-day SMA in BTC which has acted as decent support this year so could be significant going forward. The rejection of the Sunday lows at $51,300 is notable and if buyers can push above the 50-day SMA and back to the 20-day SMA, then the upward trend can resume. Those spike lows from the weekend are a line in the sand for the bulls, which coincides with a long-term trendline.