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ATFX Market Outlook, 2020 Mar 26
Personal opinions today:
The U.S. Congress is awaiting a final vote on the second round of stimulus talks. Investors believe a deal could be reached soon, and about $2 trillion in stimulus spending is about to kick in. Dow futures continued to rise last night, peaking at more than 1,000 points. Just before the closing bell, Dow futures pared gains, falling from a high of 22018 to close at 21,151. Due to the outbreak in Europe and the United States, a number of restrictions on residents stay at home. Europe and the United States’ economic slowdown is looking serious. Markets are forecasting a jump up in jobless claims. Investors were cautious, with safe-haven flows continuing to flow out of dollar assets and buying European currencies. In addition, some haven assets into the commodity market. Last night, crude oil futures prices, spot gold and silver prices recorded slight gains, but the high met the unwinding, prices fell a bit.
Gold and silver prices rose from yesterday's estimates, but gains will be held back by expectations of massive monetary easing by the U.S. government, as investors consider selling gold and silver at high prices and investing in quality stocks with higher risk returns. So yesterday, after congress passed the bailout fund, Dow futures rebounded and gold and silver prices began to retreat from their highs. Crude oil futures held above the $22 support level, repeatedly testing $25.68.
Today's European markets will focus on Germany's Gfk consumer confidence index, the UK's retail sales, and the ECB economic bulletin. Around the opening of the US market, the Bank of England released the interest rate decision and minutes of the meeting, the US jobless claims and the US real GDP final in Q4. In the market, the Bank of England interest rate decision and meeting minutes and the United States initial jobless claims, It could make the currency market and gold prices more volatile, investors should pay attention.
[Important financial data and events to watch]
Note: * denotes importance
15:00 Germany Gfk consumer confidence index * *
15:00 UK retail sales * *
17:00 ECB economic bulletin * * *
17:00 Switzerland KOF economic outlook *
17:30 UK retail sales * * *
20:00 Bank of England interest rate decision and minutes * * *
20:30 US jobless claims * * *
20:30 US real GDP final in Q4 * * *
20:30 US real personal-consumption expenditure* *
20:30 US core PCE price index final in Q4* *
21:30 Fed official Bullard speech * *
Investors' confidence fell in dollar assets and capital flowed into European currencies. In early Asian trading yesterday, the Euro/dollar broke 1.0888 resistance, up to 1.0932. Technically, the Euro/dollar 4-hour chart calculates resistance at 1.0960 as a 38.2% rebound in the golden ratio and it could test last week's high of 1.0980. The Euro was expected to limit gains to 1.0935 ahead of Germany Gfk consumer confidence index and the ECB economic bulletin. It is more likely to test lower before the Bank of England releases its interest rate decision and minutes.
The pound to the dollar
The Bank of England is expected to raise interest rates this evening. The prime minister and the chancellor of the exchequer have said they will bring forward a massive rescue package, which is a bearish for pound. Technically, the GBP/USD has tried 1.1960 resistance. However, from the fundamentals of bearish on pound, the technical trend may reverse, if below the 1.1735 support level, may try the 1.16 level.
Australian dollar/US dollar
The United States Congress failed to pass the second round of economic stimulus funding, the dollar fell, indirectly bullish on Australian dollar. Technically, the AUDUSD had traded as high as 0.6075 against the U.S. dollar, above its peak a week ago. In the short term today, AUDUSD is estimated to be subject to 0.6005 resistance, looking down on 0.5815 support. In the evening, the U.S. reported jobless claims and the final reading on real GDP in Q4. If the data is very weak, the US dollar will fall, the Australian and New Zealand dollars are expected to rise, test upper resistance.
Dollar to Japanese yen
USDJPY fluctuates with the global stock market and leads the trend direction. Technically, you can also track the performance of the USDJPY against the global stock market. Dow futures rallied sharply after congress approved funding for a second stimulus package, with the dollar trading at 111.55 yen. Dow futures and Nikkei fell, with the dollar testing support in the 110.35 to 110.15 range against the Japanese yen. Key data out of us tonight, if Dow futures fall, dollar/yen to follow the trend, the dollar/yen is expected to test the 109 level.
US dollar/Canadian dollar
1.4185/1.4165 support level
The Canadian dollar rose in line with oil prices as crude prices rebounded after a slump. Believe that the short-term USDCAD trend continues to be dominated by oil prices. Technically, crude oil prices are still estimated to have failed to break above $26, with the dollar halting its decline against the Canadian dollar at $1.41. In addition, important data from the United States tonight, if the weak data causes the dollar to fall, the U.S. dollar can try the 1.41 level against the Canadian dollar, while the U.S. dollar can try the 1.43 to 1.44 level against the Canadian dollar.
US crude oil futures
OPEC and other oil production group countries, there is no other important news to announce in the short term. The next OPEC and oil-producing countries’ meeting could be as soon as in May. We believe there is buying support in the short term for U.S. crude between $23 and $22, after which we could see resistance above $25.95 or $26.25 and above $28 or $29 above $26.25. Key US data tonight, it could lead to a bottom of $23.30 or a key support level of $22 if the data is weak.
The United States announced emergency measures to increase the size of the repurchase of Treasury bonds and rescue funds. The federal reserve started to liberalize and cut interest rates. This recent analysis estimates that these factors used to favor gold and silver prices. Now that the latest estimates of the global central bank monetary policy to increase the intensity of the easing measures are nearly completed, gold prices are expected to downward. Please note that the gold prices and silver prices together with the adjustment down. Preliminary estimates of gold prices adjusted to $1585 or $1581 support. Silver is estimated to be limited to 10-hour average resistance at $14.35, with initial support at $13.98 and $13.78.
Dow Jones industrial average futures US30
In Europe and the United States, where the coronavirus outbreak has dented investor confidence and corporate earnings, Dow futures rallied yesterday on the back of the U.S. Congress 'passage of an appropriations bill to stimulate the economy, testing 22,000 resistance after breaching 21630. The current estimate is that the outbreak has not abated, the Dow futures rebound is limited, more likely to test the 20,000 level.
6800/ 7000 resistance
5850 / 5700 support
The federal reserve launches No limited QE program. Technically, the bitcoin price would rebound. The bitcoin price is looking for $6800 or $7000 resistance. Then, if it breaks $7000, the bitcoin price would test $10,000.
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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