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ATFX Market Outlook, 2020 Mar 24
Personal opinions today:
Financial institutions assess that the global economy continues to slow down and that the global recession could worsen if the coronavirus outbreak continues. According to the financial institution's assessment, the US economy could fall by as much as 50% from its peak, unemployment could rise sharply, employment could fall by 30% and emerging markets in Europe and Asia are more likely to be severely affected.
In this regard, the US Congress continues to negotiate on the second round of the stimulus package, the current negotiations are indicated to narrow the gap. If passed, the bill could unlock about $1 trillion in government funding for economic stimulus measures. The failure to pass the funding bill led to further declines in Dow futures, which fell as much as 900 points last night. The dollar fell as safe-haven funds fled U.S. assets and European currencies received buying support. Some safe-haven assets flowed into commodity markets, with crude oil futures, spot gold, and silver all recording historic one-day rallies.
[Important financial data and events to watch]
Note: * denotes importance
G7 ministers video conference * * *
13:00 Japan leading index final value *
16:20 ECB President Christine Lagarde Speech ***
16:30 German manufacturing and services PMI * * *
17:00 Eurozone manufacturing and services PMI **
17:30 UK manufacturing and services PMI ***
17:30 Bank of England monetary policy decision * * *
19:00 UK CBI industrial order *
21:45 US Markit manufacturing and services PMI * * *
22:00 US new home sales * *
22:00 US Richmond Fed manufacturing index * *
The next day 04:30 US API crude stocks change * * *
Investors' confidence in U.S. dollar assets fell and money flowed into European currencies after the second stimulus package in congress failure. Technically, EURUSD’s 4-hourly chart, watch the 10 and 20 moving average trend breakout, testing the 1.0828 resistance. At 23.6% rebounded from lower, the resistance level is 1.0840. If 1.0840 resistance fails to break, watch for the support below the 10 and 20 moving averages, at 1.0755 and 1.0735 respectively. Fundamentals, watch for comments from ECB President Christine Lagarde and the outcome of the U.S. Congress on funding for a second stimulus package.
British pound to the dollar
The current coronavirus outbreak, the British finance minister launched the rescue measures, still failed to rescue the British economy. Prime minister said he might consider a broader quarantine policy that would limit the number of homes and contacts between residents. The Bank of England set interest rates on Thursday and is more likely to bring forward other measures to emulate the fed's massive market rescue. The pound yesterday fell short of a preliminary target of $1.1485 or $1.1465. The dollar fell as the U.S. Congress failed to pass a second stimulus package, pushing the short-term resistance level to 1.1695. If the dollar continues to fall, the pound could test resistance to $1.1785 or $1.1805.
Australian dollar/US dollar
The United States Congress failed to pass the second round of economic stimulus funding, the dollar fell, indirectly more Australian dollar. Technically, the Australian dollar has seen 0.5515 support against the US dollar, on the test of 0.5885 important resistance success. Another important resistance level of 0.5965 or 0.5985 is recommended. Investors must take note that any rebound in the dollar should congress succeed in funding a second stimulus package will cause the Australian and New Zealand dollars to fall.
Dollar to Japanese yen
Before the Asian session, the dollar had tried to 111.35 yen resistance again failed. With global stocks falling, the dollar is expected to have another chance to test Friday's low of 109.35 yen. At present, the dollar-yen with the global stock market volatility and lead the direction. Technically, you can refer to the above resistance and support. Investors must take note that the dollar is poised to bounce back as congress approves funding for a second stimulus package, with the greenback trading above 111.35 yen.
US dollar/Canadian dollar
1.4360/1.4340 support level
The Canadian dollar rose after crude oil prices rebounded after a slump. Believe that the short-term USDCAD trend continues to be dominated by oil prices. Technically, it keeps traded between $1.43 and $1.45.
US crude oil futures
Global central banks cut interest rates to stimulate the economy, the federal reserve and the launch of quantitative easing by a number of countries are expected to help stabilize oil prices, while the U.S. government is pushing for a second stimulus to boost the economy. But the failure of Congress to pass a stimulus bill over the weekend sent oil prices down to $20. Finally, also get buyback from support. U.S. crude oil futures could see the resistance of $25.95 or $26.25 and more likely $28 or $29 if congress finally votes to pass the bill.
The United States announced emergency measures to increase the size of the repurchase of Treasury bonds and rescue funds. The federal reserve started quantitative easing and cut interest rates, recently this analysis estimates bullish gold prices. Silver prices followed suit. Current estimates, global monetary policy is still to increase the intensity of easing measures, gold prices are expected to continue to rise. Technically, gold has rebounded sharply from the $1,450 level and is now trading at $1,590. Early estimates put the price at $1,520 if it does not break through $1,595. If Congress approves funding for a second stimulus package, gold could try $1,475.
Dow Jones industrial average futures US30
Dow futures hit new lows last night as the coronavirus outbreak and the second rescue fund bill negotiations failure. Investor confidence lost and corporate earnings fell, the fed's launch of quantitative easing failed to save the economy. Dow futures continued to weaken after congress failed to pass an appropriations bill to stimulate the economy. Watch closely for signs of an easing of the coronavirus in Europe and the United States, as well as whether the U.S. Congress continues to vote again on the stimulus bill and succeeds in passing it. If passed, it could boost stocks in the short term.
6800/ 7000 resistance
5850 / 5700 support
The federal reserve's decision to cut interest rates by 100 basis points and start a worth $700bn in the QE program. Technically, the bitcoin price would rebound. The bitcoin price is looking for $6550 success, next looking at $6800 or $7000 resistance.
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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