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  • here we go - starting right now
  • SEC Chair Gensler: - Working with Congress on crypto would help - A large number of crypto investors could be harmed
  • Pre-FOMC US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/JPY
  • The big question is whether the Fed announces taper tomorrow or whether they punt that announcement to the November rate decision, waiting for employment data to improve to the point of ‘significant further progress. More market update from @JStanleyFX :
  • SEC Chair Gensler: - The market is in a better position to absorb global shocks - Securities rules give the SEC great power over crypto
  • feels like we haven't had one of these in quite a while Pre-FOMC Price Action Setups, starting right at 1pm, top of the hour 1. USD PA setups 2. Evergrande worries 3. Stonks - fly or die?
  • That all said, staying patient and not chasing is prudent here imo. Tomorrow will likely be better for assessing short-term directional bias (China markets open again following holiday, post-FOMC).
  • Also, S&P Global put out a report overnight that said China would likely step in to curb “far-reaching contagion” re: Evergrande. The House is scheduled to vote on a stopgap funding bill Tuesday, which might be alleviating some investor angst around the debt ceiling as well.
  • Encouraging we recoiled higher off yesterday’s closing level. Could the pre-FOMC drift be at work? Markets were priced for potential hawkish shift and increased odds of taper timeline announcement. Perhaps seeing an unwind of that in light of recent market developments.
  • Join @JStanleyFX at 13:00 EST/17:00 GMT for a webinar on trading price action. Register here:
Coronavirus Crash: DAX & Euro Stoxx 50 in Freefall as Trump Address Disappoints

Coronavirus Crash: DAX & Euro Stoxx 50 in Freefall as Trump Address Disappoints

Justin McQueen, Strategist

DAX 30, Euro Stoxx 50 Price Analysis & News

  • Coronavirus Confirmed as a Global Pandemic
  • DAX | Aggressive Selling Persists, Focus on ECB
  • Euro Stoxx 50 | Critical Support Eyed as Sell-Off Intensifies

Global markets remain in freefall amid the ongoing spread of the coronavirus. Overnight, the World Health Organisation had labelled the virus as a global pandemic. Alongside this, US President Trump’s address had done little to provide confidence with the President stating that the US will suspend travel from the EU to the US for 30 days (does not apply to the UK), while also announcing relief measures. US equity futures are sharply lower this weighing with the Nasdaq futures hitting limit down. Subsequently, the deterioration in risk sentiment has spilled into Europe with oil prices and European indices extending losses with Airliners among the underperformers.

How to Invest During a Recession: Investments & Strategy

DAX | Aggressive Selling Persists, Focus on ECB

Having broken below the 2018 low and the 10,000 level, the DAX is now trading at its lowest level since 2016 with a deleveraging in equity markets providing support to safe-havens (Japanese and US Treasuries). On Tuesday, we questioned whether the sizeable gains were merely a dead cat bounce, which had been subsequently confirmed after aggressive selling resumed. On the technical front, while the DAX may well be in oversold territory there is little in the way of notable support until we reach the rising trendline stemming from the global financial crisis low. Focus is on the ECB to provide stimulus in order to ease financial conditions.

ECB Preview

What are the ECB’s Measures to Combat the Coronavirus?

DAX Price Chart: Weekly Time Frame

Coronavirus Crash: DAX & Euro Stoxx 50 in Freefall as Trump Address Disappoints

Source: IG Charts

Euro Stoxx 50 | Critical Support Eyed as Sell-Off Intensifies

The Euro Stoxx 50 remains under significant pressure, which has shown little signs of the slowdown abating. With support at the 2018 low pierced convincingly. Eyes are on critical support at the post-EU referendum low situated at 2653. Having bounced off this level, the Euro Stoxx 50 may have found an interim floor. However, given the aggressiveness of this sell-off risks and with little signs of a improvement in risk sentiment, markets remain tactically bearish. As such, a break below would confirm that a major double top and thus leave the index exposed to a test of 2500.

Euro Stoxx 50 Price Chart: Weekly Time Frame

Coronavirus Crash: DAX & Euro Stoxx 50 in Freefall as Trump Address Disappoints

Source: IG Charts

--- Written by Justin McQueen, Market Analyst

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.