News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Mixed
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Breaking news

New Zealand Dollar on the move as home prices may be considered in RBNZ's remit

Real Time News
  • BoJ Governor Kuroda says no shift seen in Fed's policy stance - BBG
  • The New Zealand Dollar surged 0.6% against the greenback after its Finance Minister Grant Robertson raised concerns over rising house prices to the central bank, proposing the RBNZ to consider adding house prices as a factor when making monetary decisions https://t.co/C1poEj06Kr
  • I wonder if any other central banks would follow the lead of the RBNZ on pressure to factor in housing prices in monetary policy. Go way out on a limb and perhaps even consider capital market asset inflation...probably not https://t.co/Cke07Or35H
  • EUR/CHF IG Client Sentiment: Our data shows traders are now net-long EUR/CHF for the first time since Nov 16, 2020 08:00 GMT when EUR/CHF traded near 1.08. A contrarian view of crowd sentiment points to EUR/CHF weakness. https://www.dailyfx.com/sentiment https://t.co/WJ7ZCwf3Ak
  • NZD soaring on this as such an addition to the RBNZ's remit lowers the need to ease policy, given the current backdrop of rampant house prices https://t.co/2fx0VTUOZh
  • BoJ Governor Kuroda: Won't hesitate to add easing if needed BoJ measures are having a positive impact Nervousness in financial markets has eased somewhat - BBG $JPY #BoJ
  • 7 out of 11 S&P 500 sectors ended higher, with 73.1% of the index’s constituents closing in the green on Monday. Cyclical energy (+7.09%) , financials (+1.88%) and industrials (1.64%) were among the best performers, whereas real estate (-0.34%), healthcare (-0.30%) were lagging. https://t.co/bDpvRqEX4u
  • #ASX200 looking poised to extend its recent run higher as RSI climbs back into overbought territory Key resistance levels falling at the 50% (6674) and 61.8% (6755) Fibonacci's $XJO $ASX https://t.co/E7VADxCJ1o https://t.co/T3ICLoE9du
  • Euro Price Action Setups: EUR/USD, EUR/JPY, EUR/GBP Levels to Watch - https://www.dailyfx.com/forex/technical/home/analysis/eur-usd/2020/11/24/Euro-Price-Action-Setups-EURUSD-EURJPY-EURGBP-Levels-to-Watch.html $EUR $EURUSD $EURJPY $EURGBP https://t.co/qxHSS90Rnd
  • BoJ Governor Kuroda: Japan's economy has picked up, still in severe state - BBG $JPY
Dow Jones Pulls Nikkei 225, ASX 200 lower on Alarming Covid-19 Resurgence

Dow Jones Pulls Nikkei 225, ASX 200 lower on Alarming Covid-19 Resurgence

2020-10-27 03:00:00
Margaret Yang, CFA, Strategist
Share:

DOW JONES, NIKKEI 225, ASX 200 INDEX OUTLOOK:

  • Dow Jones had its worst day in more than a month amid virus, election and stimulus concerns
  • US corporate earnings continued to beat forecasts, but failed to lift market confidence
  • Nikkei 225 and ASX 200 index may lead Asia-Pacific market lower. Ant Financial IPO in focus
Advertisement

Dow Jones Index Outlook:

The Dow Jones Industrial Average (DJIA) index fell 2.29% on Monday, marking its worst trading day since 21st September. A worrying virus resurgence across the US and Europe and a pending US relief package are among the top weighing factors. US corporate earnings continued to fare well, but investors are perhaps looking beyond the current season and assessing a potentially slower pace of growth in the winter.

The US has registered 59,691 new coronavirus cases on October 25th, marking a decline for the second day after hitting a record on 23rd. Yet there appears to be lack of incentive from the government to impose lockdown measures before the US election, rendering risk assets vulnerable to further pullback should coronavirus cases continue to climb.

Map of cases (last 14 days)

Dow Jones Pulls Nikkei 225, ASX 200 lower on Alarming Covid-19 Resurgence

Source: Google

Asia-Pacific stocks look set to trade broadly lower on Tuesday. They may, however, demonstrate resilience against external headwinds. Virus situations are better managed across the Asia-Pacific region, with China remaining a key growth engine. Some 137 new confirmed Covid-19 cases were reported in Xinjiang province on Friday, resulting in a rapid response to test 3 million people in the area.

Chinese fintech giant Ant Financial, possibly the world’s largest IPO ever, has been priced at HK$ 80 per share. Ant will be listed in both Shanghai and Hong Kong on November 5th, shortly after the US election.

Equities Forecast
Equities Forecast
Recommended by Margaret Yang, CFA
What is the road ahead for equities this quarter?
Get My Guide

On the macro front, Chinese industrial profits and US durable goods orders and consumer confidence are among the top events. Find out more on our economic calendar.

Sector-wise, all 9 Dow Jones sectors closed in the red, with 96.7% of the index’s constituents ending lower on Monday. Industrials (-3.07%), materials (-2.84%) and financials (-2.80%) were among the hardest hit, whereas defensive-linked consumer staples (-1.15%) and healthcare (-1.54%) were performing slightly better.

Dow Jones Index Sector Performance 26-10-2020

Dow Jones Pulls Nikkei 225, ASX 200 lower on Alarming Covid-19 Resurgence

S&P 500 Index Q3 Earnings Update – October 26th 2020

Name

Date

Period

Actual

Estimate

Surprise

Otis Worldwide Corp

26/10/2020

Q3 20

0.69

0.554

24.50

Hasbro Inc

26/10/2020

Q3 20

1.88

1.596

17.80

HCA Healthcare Inc

26/10/2020

Q3 20

1.92

2.283

(16.10)

Cincinnati Financial Corp

26/10/2020

Q3 20

0.39

0.39

0.00

F5 Networks Inc

26/10/2020

Q4 20

2.43

2.376

2.30

Alexandria Real Estate Equitie

26/10/2020

Q3 20

1.83

1.831

(0.10)

Principal Financial Group

26/10/2020

Q3 20

0.85

1.399

(39.20)

Packaging Corp of America

26/10/2020

Q3 20

1.57

1.424

10.30

National Oilwell Varco Inc

26/10/2020

Q3 20

(0.02)

(0.117)

86.60

Forex for Beginners
Forex for Beginners
Recommended by Margaret Yang, CFA
Why do interest rates matter for currencies?
Get My Guide

Technically, the Dow Jones index has decisively broken down the 50-Day Simple Moving Average line at 28,040 (chart below). Breaking this immediate level may have opened the room for more downside towards the next support levels at 27,755 (the 50% Fibonacci retracement) and then 27,470 (the 61.8% Fibonacci retracement) respectively.

The MACD indicator formed a “Death Cross” last week and prices have been trending lower since. This suggests that bearish momentum is dominating for now. The index price has also pierced through its lower Bollinger Band, signaling strong downward momentum.

Dow Jones IndexDaily Chart

Dow Jones Pulls Nikkei 225, ASX 200 lower on Alarming Covid-19 Resurgence

Nikkei 225 Index Outlook:

Technically, the Nikkei 225 index has likely formed a “Rising Wedge” on its daily chart, with the 20-, 50- and 100-Day SMA lines all trending up steadily over the past few months. The Nikkei may risk a temporary pullback against the backdrop of external headwinds, potentially breaking the “Rising Wedge” lower if selloff pressure in the US market persists. An immediate resistance level can be found at 24,000 – the previous high seen in mid-February 2020. The 50-Day SMA can be perceived as an immediate support level.

Nikkei 225 Index Daily Chart

Dow Jones Pulls Nikkei 225, ASX 200 lower on Alarming Covid-19 Resurgence

ASX 200 Index Outlook:

Technically, Australia’s ASX 200 stock benchmark hit a major resistance level at 6,200 and has retraced since then. The near-term trend appears to be bearish-biased, with the MACD forming a “Dead Cross” recently. Immediate support levels can be found at the 6,000- 6,020 area, where the 50-Day and 100-Day SMA lie.

ASX 200 Index Daily Chart

Dow Jones Pulls Nikkei 225, ASX 200 lower on Alarming Covid-19 Resurgence
How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading
Recommended by Margaret Yang, CFA
Improve your trading with IG Client Sentiment Data
Get My Guide

--- Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitter

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

DISCLOSURES