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ATFX Market Update - 2020.03.16


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ATFX Market Outlook, 2020 Mar 16

Personal opinions today:

The federal reserve's decision to cut interest rates by 100 basis points and start a $700bn QE. It was made in a surprise before the FOMC meeting on Thursday. Immediately after, the Reserve Bank of New Zealand also made an emergency interest rate decision, announced to cut interest rates by 75 basis points and consider large-scale bond purchases. The federal rate ceiling and the New Zealand rate all at 0.25%. This morning, Japan PM promised unprecedented economic policy. Separately, the Bank of Japan held an emergency policy meeting at noon today as markets closely watched the outcome of its unprecedented economic policy.

A meeting of the G7 was also called to order at 11 PM Beijing time tonight to discuss the global monetary policy response. Other Central Banks are expected to follow suit this week, following the fed's lead in cutting interest rates and ramping up monetary policy, roiling financial markets. It is estimated that the global launch of zero interest rate and quantitative easing policy, together with another fiscal easing, will give safe-haven assets such as gold and silver more room to rise. In addition, crude oil prices and industrial base metal prices will be similar to the subprime mortgage crisis 10 years ago by the market chase.

[Important financial data and events to watch]
Note: * denotes importance

10:00 China retail sales and Press conference * * *
10:00 RBA head of economic analysis speaks * * *
12:00 Bank of Japan emergency meeting * * *
15:30 Swiss PPI for February * * *
22:30 New York Fed manufacturing index for march *
23:00 G7 emergency teleconference ***

1.1205/1.1230 resistance
1.1075/1.1060 support
Last week, the Euro fell as low as 1.1060 against the dollar after the ECB left interest rates unchanged to double targeted funding. Today, the federal reserve suddenly cut interest rates and the start of 700 billion dollars for QE, the dollar index fell, the Euro had rebounded. But in the face of 10 - day average 1.1230 resistance, failed to break. The Euro has come downward.

British pound to the dollar
1.2475/1.2500 resistance
1.2205/1.2195 support
Last week, when the Bank of England abruptly cut interest rates ahead of its formal meeting, and the investment climate became uncertain, the pound fell below support level 1.2455 and further broke the important support level 1.2370 then testing to 1.22 support. With a meeting of the G7 expected tonight, the Bank of England could follow the fed's cut interest rate or QE. Any time a rate cut or QE is made, Pound/USD can break 1.2195 support, test the 1.20 level.

Australian dollar/US dollar
0.6185/0.6205 resistance
0.6025/0.6010 support
The Reserve Bank of New Zealand abruptly cut interest rates, chairman held a news conference, said will further monetary stimulus measures provided a reason. If the further stimulus is needed, the preference is for large-scale bond purchases rather than further interest rate cuts. The RBA is likely to follow suit next, taking a bearish view on the Australian dollar. Provisional estimates suggest the Australian dollar will struggle to break 0.62 against the U.S. dollar, looking down to its 2008 low of 0.6010.

Dollar to Japanese yen
109.25/109.45 resistance
105.65/105.45 support
Market rumors suggest the Bank of Japan will launch another 550bn Japanese yen of bond purchase. The Japanese PM said today that he would introduce new policy measures. The Bank of Japan called a rate meeting earlier than noon today. The biggest opportunity, make the yen fell. Technically, if policy remains dovish, the dollar will try to trade above the 108 level. If widen the negative interest rate level, the dollar/yen can test 109 level or test 110 as well.

US dollar/Canadian dollar
1.3935/1.3955 resistance
1.3800/1.3775 support
Crude oil prices fell, bearish for the Canadian dollar, which had traded as low as $1.39. But global central bank rate cuts and the federal reserve's decision to start easing helped oil prices and the Canadian dollar. In the coming week, watch for the impact of crude oil prices on the Canadian dollar.

US crude oil futures
32.80/33.25 resistance
30.15/29.85 support
The new pneumonia epidemic has not stopped, the cooling of investment sentiment, a more important impact on global trade and production, oil demand growth slowed. In addition, OPEC continues to increase production and promote a price war, bearish crude oil prices. But interest rate cuts by Central Banks around the world and the start of easing by the federal reserve have stabilized oil prices, which may arise. U.S. crude futures are now expected to try another $30 or $29 range before buying could lead to a rebound in prices.

1575/1577 resistance
1523/1521 support
The US President has announced emergency measures to repurchase Treasury bonds. Today, the federal reserve suddenly started to liberalize and cut interest rates, investors estimated bullish gold prices. Gold is expected to test the $1,570 level at a meeting of the G7 tonight, which could have an impact on global monetary policy, also in the gold price.

Dow Jones industrial average futures US30
22800/23255 resistance
21630/21175 support
Dow futures extended losses after the U.S. President's sudden offer to stimulate the economy, hoping to boost the economy and the stock market, brought disappointment. Today the federal reserve suddenly started to cut interest rates and QE, it is expected to rescue the economy, unknown whether effective. But believe that the QE start, can trigger capital inflows into equity assets, the stock market is expected to rise.

5850/ 6000 resistance
3750 / 3500 support
The federal reserve's decision to cut interest rates by 100 basis points and start a $700bn QE. Hopefully, the stock market going stable, then the cryptocurrencies demand increased, then the bitcoin price would rebound. First target at $6000, then looking for higher.

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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