After Wall Street indexes hit new record highs yesterday, Asian stocks turned negative on Thursday, as demand for high-yielding assets has abated on the reports that virus cases rose in South Korea and Japan. Against this backdrop, markets shrugged off the news from China, where the central bank announced an expected rate cut in an effort to support the ailing economy amid a coronavirus outbreak as a result, the MSCI Asia Index outside Japan slipped 0.3%. European markets picked up the slack following some muted bullish attempts as investors continued to monitor the developments surrounding the China virus.
On the data front, UK retail sales rose by 0.9% in January versus +0.7% expected. The previous reading was revised up from -0.6% to a drop by 0.5%. the unexpected spectacular recovery in retail sales caused a local bounce in GBPUSD from ten-day lows around 1.2880. The pair got back above 1.29 and turned slightly positive on the daily timeframes. Still, the cable lacks the upside momentum as concerns over Brexit persist and the dollar demand remains robust across the board. Besides, there is a resistance area in the form of the 100-DMA that could prevent the pound from a more pronounced recovery in the near term.
Meanwhile, gold prices refreshed seven-year highs around $1,613 yesterday and see a mild bearish bias on Thursday. The corrective attempts are looking shallow, with the overall picture for the precious metal remains firmly bullish. As the bullion is back above the $1,600 psychological level, it could extend the rally to fresh long-term tops despite the USD rally, as investors still prefer to buy safe-haven assets amid the persisting concerns and uncertainty surrounding the coronavirus and the effect from the outbreak for the global economy in the first quarter.
In cryptocurrencies, bitcoin fell dramatically along with altcoins overnight. BTCUSD was rejected from the $10,000 handle and dipped to two-week lows around $9,300. Ethereum and Ripple suffered even more steep losses, having declined by 6% over the past 24 hours. As the market has sent a clear sell signal, bitcoin and other cryptocurrencies are vulnerable to further bearish correction in the short term. the sell-off highlights the importance of the $10,200 resistance area. As such, if BTC fails to hold above the mentioned lows, the $9,000 level could be put at risk. So far, it looks like the digital currency will make a bounce and retarget $10,000.