European equities tumble as COVID-19 cases rise

European stocks declined sharply as investors reacted to the rising number of Covid-19 cases in Europe. In Germany, the DAX index dropped by 3.2% while in the UK, the FTSE 100 index fell by 2.5%. In France, the CAC 40 index dropped by more than 2% after Emmanuel Macron announced a 9pm – 6am curfew as the number of cases continued to rise. In Germany, Angela Merkel announced that those cases were in an exponential growth phase as she limited the number of gatherings to 10 people. The country confirmed more than 5,132 cases, the highest reading since April. 

The Australian dollar declined sharply as the market reacted to the country’s jobs numbers. The numbers showed that the unemployment rate rose from 6.8% to 6.9% as the country lost close to 30,000 jobs. The participation rate remained unchanged at 64.8%. The currency also reacted to a statement by RBA Governor Philip Lowe, who said that the bank was committed to supporting the economy. Analysts polled by Reuters expect that the bank will slash rates and expand the quantitative easing program in its November meeting. 

The British pound erased earlier gains as the number of coronavirus cases in the UK continued to rise. The country confirmed more than 17,000 cases, bringing the total to more than 655k. The market is also reacting to ongoing developments on Brexit as EU leaders met. According to a leaked document, the EU will ask the UK to make necessary moves to make a deal possible. Another report by Reuters said that Boris Johnson will continue with talks even as his unofficial deadline ends. The three remaining issues on Brexit are on regulations, fisheries, and government support for companies.

EUR/USD

The EUR/USD price dropped to a low of 1.1713, which was the lowest level since October 5. On the hourly chart, the price is slightly below the 25-day and 15-day exponential moving averages. The moving average of oscillator has moved below the neutral line. The price is also below the important level of 1.1750, which is the neckline of the previous head and shoulders pattern. The pair is likely to continue falling as bears move to the next support at 1.1695 during the US session.

GBP/USD

The GBP/USD pair dropped to a low of 1.2905, which is below the pink ascending trendline. The price has also moved below the 25-day exponential moving average. The Average True Range (ATR) has started to rise, which is a sign of increased volatility. The pair is likely to continue falling as traders aim for the next support at 1.2850.

AUD/USD

The AUD/USD dropped to an intraday low of 0.6073. On the four-hour chart, the price is below the 23.6% Fibonacci retracement level. The pair also broke-out below the ascending trendline. It is also below the 25-day and 15-day moving averages. The RSI has also moved below the oversold level of 30. The signal and main lines of the MACD have moved below the neutral line. Therefore, the price is likely to continue falling with the next target at 0.7000.