Asian stocks gave up their gains from yesterday as risk aversion once again dominated sentiment today. The Nikkei 225 suffered a 2.72% or 579.22-point loss at 20,749.68. The Shanghai Composite Index is trading lower by 1.17% 35.791 points at 3,035.886. Meanwhile, the Hang Seng Index is in the red by 2.40% or 642.5 points at 26,126.5.
Concerns about the coronavirus rapidly spreading outside of China weighed down on equities markets today. The number of confirmed cases in the infection’s epicenter, China, has only grown from 78,800 to 80,600 in a week. On the other hand, countries outside of it have seen cases rise from 5,300 to 17,800 within the same period. Consequently, this has gotten investors worried about the impact of the coronavirus on businesses. Just yesterday, the UK’s largest regional airline Flybe was declared insolvent and left hundreds of passengers stranded all over Europe.
As for currencies, most majors are virtually unchanged ahead of the US NFP report which is due later today. The biggest mover is NZDUSD which is up by 0.43% at 0.6328 and USDJPY with a 0.27% loss at 105.87.
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GBPJPY Outlook
The recent sell-off on GBPJPY has pushed it below support at the rising trend line. As of this writing, the currency pair is trading around support at the 200 SMA. A close above yesterday’s high at 137.36 could mean that the currency pair would soon retest the broken trend line. Near-term resistance is at 140.40.
On the other hand, a closer look at the recent price action on GBPJPY suggests that sellers may not be done pushing price lower. The currency pair has been trading in a consolidation for the past four trading days. Because this follows a sharp sell-off, it has allowed for a bearish flag chart pattern to form. A close below the low of March 3 at 136.92 could mean that GBPJPY may soon fall to its October 8 lows at 130.55.
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