ATFX Market Update - 2020.03.17

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ATFX Market Outlook, 2020 Mar 17

Personal opinions today:

Dow futures fell more than 10% to nearly 3,000 points drop yesterday after the federal reserve cut interest rates by 100 basis points and launched a $700bn in quantitative easing program, investors worried about the economic outlook. Gold prices after several days of adjustment hit $1,450 to bounced back $14. Silver also followed gold's trend, rallying from $11.8 to $13.2. Dow futures rallied 3% early the day's Asian session. Asian stocks market followed the sentiment, with the Nikkei index rebounding 3%. China's A50 index and Hong Kong's HSI opened higher, while gold and silver prices limited the gains. Stocks rebounded and oil prices rose, erasing last night's losses. U.S. crude oil back to $30 a barrel, above the 20-hour moving average.

The G7 meeting last night, all leaders agreed and reacted aggressively to the outbreak and stabilized each other's economies. At present, the attraction of asset prices stimulates investors to enter the market and buy stocks and other commodities, which also leads to the initial stabilization of the stock market and the rise of commodity prices.

Although Europe and the United States have important data released today, these are already lagging data, investors have long been prepared, data and asset prices have been reflected. It is believed that these European and US data have little impact on the market. Instead, the market could be further attracted by signs of a slowdown in the global outbreak and the absence of other scary economic measures.

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

08:30 RBA minutes * *
09:00 RBNZ economic package * * *
17:30 UK February unemployment rate and claims * * *
18:00 Germany and Eurozone ZEW economic sentiment * * *
20:30 U.S Retail sales in February * * *
21:15 U.S industrial output in February * *
22:00 U.S January business inventory * *
23:00 U.S NAHB housing market index in March *
The next day 04:30 U.S API crude stocks change * * *

Euro
1.1220/1.1230 resistance
1.1130/1.1120 support
The dollar index fell as the federal reserve abruptly slashed interest rates and launched a worth $700 billion QE program. There has been no further expansion of the ECB's loose monetary and fiscal policy that it has pursued for years. The gap between the Euro and the dollar narrowed, and the Euro rebounded. Just in the face of 10 - day average 1.1230 resistance, failed to break, the initial adjustment. Today's ZEW economic sentiment index in the Eurozone needs to be compared to U.S. retail sales in February. If Eurozone economic data grow widely and U.S. retail sales in February lower than market expectations, the euro/dollar could test the resistance of 1.1230 or possibly break out and continue to rise.

British pound to the dollar
1.2335/1.2345 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 British pound against USD fell below support at 1.2455 and further tested at 1.22. With the Bank of England expected to follow the fed's lead and possibly continue to cut interest rates or raise the yard, the pound could breakthrough 1.2195 support against the dollar to test the 1.20 level.

Australian dollar/US dollar
0.6185/0.6195 resistance
0.6090/0.6080 support
The Reserve Bank of New Zealand abruptly cut interest rates, and the central bank said at a news conference that further monetary stimulus was warranted. If a further stimulus is needed, the preference is for large-scale bond purchases rather than further interest rate cuts. The Reserve Bank of Australia is likely to follow the lead of the RBNZ on Thursday and step up its bond-buying program to free up liquidity. Provisional estimates suggest the AUDUSD will struggle to break through 0.62, looking down at 0.6080. For a breakout, look below the 2008 low of 0.6010.

Dollar to Japanese yen
107.35/107.45 resistance
105.65/105.45 support
The BoJ would simply increase its purchases of derivatives ETF’s instruments, freeing up liquidity and making it easier for companies to lend. These measures did not have a bearish on the yen. The USDJPY remained in the equity market sentiment as a safe haven asset. It is recommended to watch the stock market fluctuations, tracking the trend of the dollar against the yen.

US dollar/Canadian dollar
1.4020/1.4035 resistance
1.3935/1.3915 support
Crude oil prices fell, once a bearish for the Canadian dollar, the USDCAD hit 1.40 level last night. Coupled with the federal reserve's new fiscal measures, the US dollar fell. Resistance is expected at the $1.40 level. If U.S. API crude stocks are down at 04:30 tomorrow, crude oil prices will rise, the USDCAD would test 1.3915 or see 1.38 level.

US crude oil futures
32.80/33.25 resistance
29.05/28.85 support
Global Central Banks cut interest rates to stimulate the economy, boosting investment and consumer confidence. In addition, the federal reserve started the quantitative easing, which in the past has helped to stabilize oil prices and the subsequent price rise. U.S. crude oil futures are now estimated to have tested the $29 range before buying up. A drop in U.S. API crude inventories change at 04:30 tomorrow could push crude prices up to $31 and further into other resistance levels.

Gold
1535/1538 resistance
1465/1463 support
The U.S. President announced emergency measures to repurchase Treasury bonds. Since the fed's sudden launch of quantitative easing and interest rate cuts, investors have estimated a bullish gold price. But gold prices fell last night ahead of G7 meeting to tackle global monetary policy. At present, the global monetary policy is still loose measures, the gold price is expected to rise. Preliminary estimates, $1475 level, as the gold prices first support, and next $1463 support. Initial resistance notes $1538 resistance if possible break up $1570.

Dow Jones industrial average futures US30
21639/22135 resistance
20770/20170 support
Dow futures fell nearly 3,000 more points as investors fretted over whether the fed's sudden easing and interest rate cuts would support the economy. However, it is believed that the fed's launch of a wide range of funds can trigger inflows into equity assets, the stock market is expected to rise. There is buying in Asia today, it is worth noting whether the atmosphere can continue to Europe and the United States sessions.

BTCUSD:
5850/ 6000 resistance
4550 / 4300 support
The federal reserve's decision to cut interest rates by 100 basis points and start a worth $700bn in QE program. 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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