Wall Street rallied yesterday as traders reacted to news that some states were starting to reopen. In New York, Governor Andrew Cuomo said that the state would start to reopen in phases starting from next week. The same trend is happening in other states like Texas and Alaska. As a result, the biggest winners in the S&P 500 were retailers, hotels, casinos, and cruise ships. These are the companies that have been hurt the most during the pandemic. In addition to the reopening, stocks gained because of the ongoing earning season. Today, the companies that will report are 3M, Caterpillar, Centene, Corning, Ecolab, Pepsi, and Alphabet among others.
The price of crude oil declined in overnight trading as demand issues remained. The West Texas Intermediate (WTI) dropped by 15% during the Asian session, extending the 25% decline made yesterday. The market is concerned that the action by OPEC+ three weeks ago was too little too late. This is mostly because the demand for crude oil is currently not there because people are not traveling. In fact, dozens of oil tankers have been seen in Singapore and California with nowhere to go. At the same time, oil companies are still producing millions of barrels per day.
The economic calendar will be relatively light today. In the US, we will receive preliminary goods trade balance data from the commerce department. We will also receive wholesale inventories, Redbook, and consumer confidence data. There will be no major data from Europe except the March retail sales data from Sweden. Additionally, the Riksbank will deliver its interest rates decision later today. Finally, we will get oil inventory data from the American Petroleum Institute (API).
The EUR/USD pair was little changed during the Asian session. The pair is trading at 1.0825, which is slightly below yesterday’s high of 1.0859. The price is along the 28-day EMA and 50-day EMA. It is also along the 38.2% Fibonacci retracement level. This retracement was drawn by connecting the highest and lowest points this month. Therefore, the pair will remain bearish if it manages to hold below the 38.2% retracement level.
The XTI/USD pair declined to an intraday low of 13.64 as the market remained concerned about the demand and supply of crude oil. On the four-hour chart, the price formed a triple top pattern at 19.50 on Friday last week. Also, the price is trading below the short, medium, and long-term moving averages while the RSI has been moving downwards. The pair will likely continue declining as bears attempt to retest the previous low of 10.
The AUD/USD pair dropped to a low of 0.6435. This happened after the pair found significant resistance at around 0.6465. On the hourly chart, the price is along the 28-day EMA but slightly higher than the 50-day EMA. The bearish trend will likely continue today as bulls attempt to retest the 23.6% Fibonacci retracement level at around 0.6420.