US STOCKS SOAR AS TESLA STOCK DOUBLES THIS YEAR

US stocks rallied yesterday as the market ignored the spreading risks of coronavirus. The Dow rose by more than 400 points while Nasdaq rose by almost 200 points. Tesla was among the biggest winner. The company’s stock has risen by more than 50% in the past five days. It is now valued at more than $160 billion, making it the second biggest auto company after Toyota. eBay was another big gainer after the market reacted to news that the owner of the New Year Stock Exchange (NYSE) submitted a bid to acquire the company. Meanwhile, shares of Chipotle jumped after the company reported better-than-expected results.

The kiwi declined after New Zealand released the fourth quarter’s employment numbers. The country’s unemployment rate declined from the previous 4.1% to 4.0%. In the past decade, the unemployment rate has dropped from a high 7.3% in February 2010. The participation rate declined from 70.40% to 70.10% while the labour cost index rose from 2.3% to 2.4%. The seasonally adjusted underutilisation rate declined to 10% in the fourth quarter from the previous 10.4%.  This was the lowest rate since 2008. This rate measures the number of people who have jobs but want to work more hours. The number of people not in the labour force increased by 18k to 1.17 million. This is the highest number in history.

Traders will receive important information today. In the United States, ADP will release its employment data for January. The market expects data to show that the economy added more than 156k jobs. The number from ADP tends to differ significantly with the official government number of 202k. The market will also receive trade statistics for January. These numbers will provide a snapshot of the impact of the coronavirus on trade. ISM will release the non-manufacturing PMI while the EIA will release oil inventories for the past week. In Europe, the market will receive PMI data from the UK, France, and Germany.

EUR/USD

The EUR/USD pair declined during the American and Asian sessions. The pair is trading at 1.1034, which is lower than Monday’s higher of 1.1095. As the pair declined, it broke past the symmetrical triangle pattern shown in white below. The price is slightly below the 14-day and 28-day exponential moving averages. The RSI has also been declining. The pair may continue moving lower ahead of the US jobs data.

GBP/USD 

The GBP/USD pair declined in overnight trading and reached a low of 1.2940. This was the lowest level since December 26. The pair has been moving sideways since January. The price is below the 14-day and 28-day exponential moving averages. It has also moved slightly above the important support level of 1.2960. The pair may rise today ahead of the service PMI data from the UK.

USD/CAD

The USD/CAD pair rose to a high of 1.3300, which is the highest level since December 3. The pair is above the 14-day and 28-day EMA. The price is above the overbought level of 70. The signal and main line of the MACD are above the neutral line. The price is above the Ichimoku cloud. The pair may continue soaring. However, this can change depending on the US job numbers.