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ATFX Market Outlook, 2020 Feb 25

 

Personal opinions today: 

 

The Coronavirus spread is not over yet, spreading in Asia and Europe, and the global economy is uncertain. Investment risk on, the gold market may become one of the main hedging tools. With Dow futures fell more than 1,000 points yesterday, while the dollar index also fell. The price of gold has soared, reaching as high as $1,689.

 

In addition, oil prices fell more than 3%, as low as $50.70 a barrel, on expectations that China's economic and manufacturing slowdown could lead to a steeper drop in demand than markets had anticipated. But in an interview, last night, Warren Buffet, a famous investor, said he would continue to hold on to stocks and, anticipating that the Coronavirus could be resolved, recommended buying attractive assets. Also, the federal reserve board vote rate cut expectations, the Dow futures rebounded. Stocks rebounded and gold rallied. Gold prices fell sharply and oil prices rose after Asian trading opened today. The market focused on Germany's Q4 GDP final annualized value, US CB consumer confidence index in February and federal reserve vice-chairman speech suggested to watch the market volatility!

 

[Important financial data and events]

Note: * refers to the degree of importance

 

15:00 Germany Q4 GDP final ***

19:00 UK CBI retail sales difference **

22:00 US FHFA housing price index *

23:00 US Richmond fed manufacturing index **

23:00 US CB consumer confidence index ***

The next day 04:15 Federal reserve vice-chairman speech ***

The next day 05:30 US API crude oil stocks change ***

 

EURUSD

1.0875/1.0885 resistance

1.0840/1.0830 support

ECB President Christine Lagarde’s speech and Germany's February IFO business sentiment index were positive for the Euro. European markets today focused on Germany's Q4 GDP final annualized, with investors expecting a flat reading and bullish sentiment for the Euro. Technically, the EURUSD has been testing 1.0860 resistance as high as 1.0870. With reference to mid-February resistance at 1.0885, the EURUSD could test 1.0840 or 1.0830 support, more likely 1.0790, if it fails to break through today.

 

Pound to dollar

1.2970/1.2980 resistance

1.2915/1.2905 support

The dollar falls and the pound gains. The U.K. government is due to ask the US government trade department for a trade deal next week, after which it will formally discuss a deal with the EU’s Brexit committee. A trade deal with the US and a Brexit deal could bullish the pound. The pound is still expected to consolidate between 1.28 and 1.29 in this period, with significant resistance to 1.2980 seen above. 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

0.6590/0.6580 support

The Australian dollar's decline against the U.S. dollar slowed, but the RBA continued to be bearish on the currency after it said in minutes that it was considering further rate cuts to stimulate the economy. The Australian dollar is expected to continue to lower against the U.S. dollar during this period, also indirectly bearish New Zealand dollar. Keep an eye on U.S. economic data this week. If U.S. economic data continues to be weak in February, the U.S. dollar will fall and the Australian and New Zealand dollars will gain. Technically, the AUDUSD is testing resistance at 0.6630 or 0.6640.

 

Dollar to yen

111.25/111.35 resistance

110.60/110.50 support

As Japan's fiscal year draws to a close, demand for yen funds has risen and the dollar has fallen against the yen as companies repatriate funds to Japan between mid-February and the end of March. At present, the technical key resistance level is at 112 but may start to lower to 111.35. 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 109 against the yen.

 

USDCAD 

1.3300/1.3310 resistance

1.3250/1.3240 support

Economic adversity, the demand for crude oil fell, oil prices fell, bearish Canadian dollar. The dollar yesterday traded at $1.3305 to the Canadian dollar. It is believed that the dollar/Canadian dollar could fall between 1.33 resistance and 1.32 before the release of U.S. crude inventories change and OPEC’s early announcement of a cut.

 

US crude oil futures

52.40/52.65 resistance

50.50/50.20 support

The famous investor Warren Buffet’s bullish comments reassured the market. Oil prices rebounded after a drop. Technically, crude has rebounded after testing the $50 level, with an initial target of $52.65 becoming an important current resistance level. Investors look ahead to U.S. crude oil inventory data tomorrow morning. Short-term crude has a chance to test the $50 levels in anticipation of higher inventories.

 

Gold

1660/1662 resistance

1642/1640 support

Dow futures fell more than a thousand points and money flowed into gold, which rose from $1,680 to $1,689 last night. With a lot of short positions starting above $1,680, the price of gold then adjusted sharply. On top of that, gold prices fell when Dow futures rebounded after Warren Buffett, a well-known investor, said he was optimistic about investment prospects. In Asian trading today, gold was as low as $1,643. U.S. new home sales and Q4 GDP release tomorrow and  Thursday respectively, there are expected to support U.S. economic growth forecasts and limit gold gains. Investors are more likely to take the opportunity to adjust to gold's rise. Suggest investor is in $1680 above, moderately reduce hold long. In the short term, $1642 and $1640 became important to support, up to $1,660. If gold prices try another $1,685 or $1,692 resistance, watch for gold prices to fall as well.

 

U.S. Dow Jones industrial average futures US30

28550/28730 resistance

28080/27920 support

Global economic uncertainty sent Dow futures down more than 1,000 points. Famous investor, Warren Buffett, and the fed members put a bullish stock market comments, investor sentiment recovered. the Dow futures recovered part of the lost ground. Technically, look for 28080 or 27920 support, and 28550 or 28730 resistance.

 

BTCUSD:

9885 / 10050 resistance

9405 / 9255 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. Technically, look for $9405 or $9255 support, and $9885 or $10050 resistance.