ATFX Market Update - 2020.02.26

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ATFX Market Outlook, 2020 Feb 26

Personal opinions today:

Coronavirus continues to affect the global economy and investment sentiments. Global stock markets fell on fears of a worsening economy, with Dow futures down more than 800 points, taking their losses in recent days to nearly 2,000 points. The gold market continues to be one of the main safe-haven vehicles, with gold likely to continue to rise after the correction, while silver is up 1%. In addition, the market focus on the federal reserve policy committee speech, grasp the latest federal reserve monetary policy state.

[Important financial data and events]
Note: * refers to the degree of importance

17:00 Swiss ZEW investor confidence index for February **
22:45 Federal reserve's Kaplan speech ***
23:00 U.S. new home sales for January **
23:30 US EIA crude oil inventories change **
The next day at 02:00 Fed Kashkari speech ***

EURUSD
1.0875/1.0885 resistance
1.0840/1.0830 support
Germany's GDP was flat at an annual rate in Q4, in line with investors' expectations and bullish for the Euro. The EURUSD is testing 1.0885 resistance this morning, a high in mid-February. Technically, if it fails to break that resistance today, the Euro could test low support against the dollar. The temporary target is 1.0840 or 1.0830 support separately.

Pound to dollar
1.3025/1.3035 resistance
1.2965/1.2955 support
The dollar index fell again and the pound gained. The British government is expected to seek a trade deal from the US department of trade. Also, the UK government will formally discuss a Brexit deal with the EU's Brexit committee, boosting the pound and successfully testing the 1.2980 key resistance. Believe that when all the good UK news comes out, the pound could test the 1.31 or 1.32 level.

Australian dollar
0.6630/0.6640 resistance
0.6575/0.6565 support
The Reserve Bank of Australia (RBA) comments that bearish on the Australian dollar after it released minutes. The Australian dollar is expected to continue to lower against the U.S. dollar during this period, also indirectly bearish on the New Zealand dollar. In the short term, focus on Fed officials' comments, as well as this week's U.S. economic data. If the U.S. economic data is weak, the U.S. dollar falls, indirect interest on the Australian and New Zealand dollars. Technically, the AUDUSD is testing resistance at 0.6630 or 0.6640. Provisional estimates of 0.6575 or 0.6565 support, that could be considered as short-term support.

Dollar to yen
110.45/110.50 resistance
109.80/109.79 support
In the recent analysis, Japan's fiscal year is expected to coming. In the past, most corporate have repatriated funds to Japan between mid-February and the end of March, the demand for yen funds has increased and the dollar has fallen against the yen. In addition, the possible cancellation of the Tokyo Olympic Games in 2020 is more likely to promote the capital repatriation of Japanese enterprises to the Japanese market and accelerate the rise of the yen. At present, the technically important resistance level lower to 111.00. It is recommended to be aware of the risk that the dollar may fall against the yen at any time. The initial target is for the dollar to fall to the 109-yen level, and then possibly try the 108-yen level.

USDCAD
1.3340/1.3350 resistance
1.3250/1.3240 support
US crude oil futures fell yesterday, with the dollar again testing $1.3305 against the Canadian dollar. It is believed that the meeting of OPEC and energy ministers next week could accelerate the early announcement of production cuts and stabilize crude prices. The USDCAD could also wobble between 1.3350 resistance and 1.3240.

US crude futures
51.40/51.65 resistance
49.85/49.55 support
US crude oil inventories fell this morning to 2.46m b/d below expectations. Crude oil hovered in the $50 range. Next Friday's meeting of OPEC and energy ministers is expected to accelerate the early announcement of a production cut, which could first stabilize crude prices. If the chances of a production cut are high, crude could hit $52 a barrel.

Gold
1660/1662 resistance
1633/1630 support
Safe-haven money is flowing into the gold market. In the short term, the price of gold is below 1640, supported by gold bulls and looking at $1660 in the short term. If gold breaks $1,660, there is an opportunity for gold to fall after it has tested $1,685 or nearly $1,692 in early market reaction.

U.S. Dow Jones industrial average futures US30
27625/27840 resistance
26875/26700 support
Dow futures fell again amid uncertainty about the global economy. Though renowned investor Warren Buffett and the Fed voting members put a bullish stock market comments, temporarily stable investor sentiment, the Dow futures recovered part of the lost ground yesterday. However, the spread of coronavirus affected investor confidence. If Dow futures technically absorb 38% of the overall gain for 2019, watch out for 26,500. For the time being, we must watch the development of global coronavirus and pay more attention to the comments of federal reserve officials, which can boost the stock market.

BTCUSD:
9885 / 10050 resistance
8850 / 8600 support
Investors worried the federal reserve to reduce the size of the purchase of bonds, the market liquidity reducing, affecting the financial markets and US economic growth. If Dow future keeps downward, the bitcoin would be upward.

Enjoy trading! The content is for reference only. Please do ensure that you understand the risk.

Registered Australian Accountant/ Certified Professional Manager / Certified Financial Advisor Experienced Investor / Media Market Commentator Martin Lam has Over 17 years’ experience in global investment market. Familiar with the worldwide stock indices, precious metals such Gold and Silver, Crude oil and Forex. He operated Martin Currency Trading Company and had partnership with a number of well-known international financial corporations and institutions. Before he join ATFX, he was TeleTrade Greater China development and Sales Director. Mr. Lam attends Hong Kong Now TV and China CCTV finance channel once a week. He also had regularly invited by different media, such as DBC Digital Financial Channel, Hong Kong Economic Times, The Standard, Ming Pao to share his experience to trade in Forex, Precious metals, Crude oil and worldwide stock indices

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