US stock markets posted a decent rally overnight, as risk sentiment has improved somewhat following a deep sell-off last week. Investor focus has shifted to the possible supportive measures both from the governments and central banks amid the coronavirus spreading across the globe. Asian markets followed the suit and saw mostly upbeat dynamics on Tuesday, with the exception of Japan’s Nikkei 225 that slipped 1.2% despite the Bank of Japan conducted another repo operation in an effort to inject more liquidity into the market and ensure its stability.
In Australia, S&P/ASX 200 finished 0.69% higher after a brief jump by over 1% in an initial reaction to the RBA’s decision to cut interest rates to an all-time low of 0.5%, as expected. This step bolstered stocks in general, as investors now hope that other major central banks will follow the suit and take measures to shield their economies from the effect of the coronavirus outbreak.
Following the RBA decision, AUDUSD rose to yesterday’s highs around 0.6570. The upside momentum in Aussie remains limited despite a broad-based dollar weakness as risk demand is still fragile, and oil prices struggle to regain a firm bullish momentum after a dip towards mid-2017 lows below $49. In the short term, the pair will likely remain close to 11-year lows despite the oversold conditions.
Meanwhile, gold prices retain a mild positive bias after yesterday’s rejection from the $1,610 area. The precious metal remains below the $1,600 psychological level, as European stock markets are rallying on Tuesday, adding over 2.5%. In a wider picture, the bullion may resume the ascent as risk demand could wane quickly.
As for cryptocurrencies, BTCUSD encountered a local resistance just below the $9,000 level and got back to the middle of the short-term range. The 200-DMA now acts as the immediate support, and once the pair manages to hold above this line, the prices could retarget $9,000 and see a daily close above this important level. On the hourly timeframes, a bearish bias persists, and the digital currency still lacks the upside impetus regain the 50-DMA around $9,300.