How Much Did the US Economy Grow in Q2?
What will happen? The US Q2 Gross Domestic Product will be announced at 15:30 MT time (GMT+3) on Thursday, July 29…
The sell-off across the markets
The week has started with a cautious note, as the news surrounding coronavirus combined with the attack of the US embassy in Baghdad increased the risk-off sentiment in the markets.
Coronavirus is spreading
What is a coronavirus and how it affects the markets? You can read more about it in our recent article. Long story short, it is a deadly pneumonia-like disease that started in the food markets of middle China. China has already reported more than 2,700 cases of coronavirus. The country even extended the Lunar New year holiday after the reports of 80 confirmed deaths. And while the doctors are looking for a cure, the spread of the virus continues.
The attack of the US embassy
Five rockets crashed near the US embassy in Iraq amid the wide protests in the country. The demonstrators have been demanding the removal of the ruling elite and an end to foreign interference in Iraqi politics.
The market reaction
The risk-weighted assets reacted immediately to the news. Of course, the initial reaction has been visible on the USD/CNH chart. The pair gapped up towards the crossover of the 200- and 50- day SMA at 6.9795. At the moment, bulls are targeting the next key resistance at 7.014. The key level on the downside will be placed at 6.9525. The next one is 6.92.
Against the USD, the Australian dollar gapped down towards the 0.6770 level on the daily chart. Strong bearish pressure may pull the pair lower to the 0.6750 level. The upside momentum will be limited by the 0.6820 and 0.6855 levels.
USD/JPY has been showing a mixed performance. After the opening below the 50-day SMA and the 109 level, bulls have been trying to take back their positions. On the other hand, bears are still trying to pull the pair as low as the 200-day SMA at 108.47. The next key support will lie at 108.25.
Gold has retested the highs of early January around the $1,585 level. Increased risk-off sentiment may push it higher towards $1,600. On the downside, there is support at $1,538.
Oil prices opened much weaker, too. The price of Brent fell to the lows of last October, looking forward the support at $58.2. The next key level for bears will lie at $57.3. Bulls need to push the price above the $60 level to get back their positions.
WTI inched lower, too. Right now the price is moving down towards $51.85. The next support in focus will be placed at $51. The key level for bulls is placed at $54.
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