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ATFX Market Outlook, 2020 Mar 5

 

Personal opinions today: 

 

The federal reserve has cut interest rate 0.5%, Fed fund rate hits 1.25%. Last night the Bank of Canada followed the federal reserve in cutting rates 0.5%. Markets had expected the Bank of Canada to cut interest rates only 0.25%, but they were not surprised. As many Central Banks around the world mentioned they prepare to cut interest rates, the capital funds put money into risk markets. Separately, U.S. ADP payroll and the ISM non-manufacturing PMI for February beat market expectations. Dow futures rebounded more than 1,000 points last night, covered most of the losses on this Monday. While risk aversion cooled as European and Asian stocks rebounded, while the gold price and the yen fell.

 

Attention today, OPEC meeting opening, investors watch crude oil price volatility. In the evening, EU chief Brexit negotiator held a press conference and Bank of England governor spoke, keeping an eye on the Euro and the British pound, and indirectly on the Swiss franc. Separately, U.S. jobless claims change and U.S. factory and durable goods orders for January. The data mentioned above, particularly U.S. data, will affect the dollar index, Dow futures and gold prices, until release U.S. non-farm payrolls data tomorrow.

 

[Important financial data and events]

Note: * refers to the degree of importance

 

16:30 OPEC meeting opening***

21:30 U.S. Jobless claims for last week ***

23:00 U.S. Factory and Durable goods orders for January **

23:00 EU Chief Brexit negotiator holds a press conference ***

The next day 01:00 Bank of England governor speaks ***

The next day 01:45 Bank of Canada economic report **

 

EURUSD 

1.1165/1.1175 resistance

1.1100/1.1095 support

Eurozone retail sales rose in February released yesterday, in line with expectations, but PMI for services in Germany and the eurozone fell in February. On top of that, U.S. ADP payrolls beat market expectations in February and were bearish for the Euro. Euro/dollar cannot continue to rise, stop before 1.1200 resistance. Investors wait and see the U.S. economic data and the European Union's chief Brexit negotiator press conference tonight, the Euro would volatility. 

 

Pound to dollar

1.2890/1.2900 resistance

1.2755/1.2745 support

UK fundamentals are bearish for the British pound, but the Fed sudden interest rate cut has caused the pound to rebound. For the time being, GBP/USD is limited to 1.2900 resistance. Investors wait and see the U.S. economic data and the EU Chief Brexit negotiator press conference tonight. The pound could fall if he is strongly unhappy with the British government's Brexit deal.

 

Australian dollar

0.6625/0.6635 resistance

0.6565/0.6555 support

The Australian dollar rebounded after a better-than-expected annualized GDP report for the fourth quarter and a federal reserve rate cut, but remained limited to 0.66 against the U.S. dollar, failing to sustain the rally after peaking around 0.6625. The Australian dollar could test support at 0.6565 or 0.6555 against the greenback if U.S. economic data is strong and over investor’s expectation tonight.

 

Dollar to yen

107.75/107.85 resistance

107.25/107.15 support

Dow futures rebounded from recent lows and the dollar/yen followed the pattern. But watch out for the dollar to fall against the yen if U.S. economic data is weak or Dow futures fall again. In addition, the dollar is still likely to fall against the yen during March, when capital flows back to Japan for fiscal year-end. Technically, dollar/yen would test 106.85 an important support.

 

USDCAD 

1.3420/1.3430 resistance

1.3325/1.3310 support

The Bank of Canada cut rates last night followed the federal reserve in cutting rates by 0.5%. The Canadian dollar had previously fallen, making its first attempt at 1.3430. Gains in the U.S. dollar against the Canadian dollar were limited as investors anticipated a meeting for OPEC output cut, raising the prospect of a rise in crude prices. Technically, for reference to USDCAD. Resistance at 1.3430 and below 1.3310 as support.

 

US crude oil futures

49.15/50.45 resistance

47.00/46.55 support

OPEC and energy ministers will meet to discuss production cuts. Oil prices are expected to rebound after the federal reserve, Australia and Canada cut interest rates. If OPEC confirms output cut more than 1 million barrels per day, bullish crude oil price.

 

Gold

1648/1650 resistance

1630/1628 support

Gold rebounded after the federal reserve's surprise rate cut. Yesterday this analysis refers to the Fed rate cut news, gold prices have been reflected. Yesterday, the ECB did not mention any monetary policy change. U.S. job data and service sector PMI for February were positive, Dow futures also rebounded, and gold prices adjusted higher. Technically, the first significant resistance to gold is at $1,665. For now, however, we can lower the resistance level to $1,648 and $1,650, below support at $1,630 and $1,628, and wait for the U.S. non-farm payrolls data tomorrow night.

 

U.S. Dow Jones industrial average futures US30

27090/27290 resistance

26400/26210 support

Yesterday, this analysis from technical analysis estimates that Dow futures important resistance range in 26875 and 27290, the technical resistance is still in place, Dow futures test resistance is expected to decline. U.S. job data and the services PMI beat market expectations last night, but Dow futures only rose to 27,090, did not touch the 27,290 resistance. Ahead of tomorrow night's U.S. non-farm payroll data, Dow futures have a low chance to break above resistance and could test support at 26400 or 26210.

 

BTCUSD:

9245/ 9550 resistance

8550 / 8355 support 

Unexpected market demand declined in cryptocurrencies, the bitcoin price fell sharply before. Most of the cryptocurrency’s price fell and transfer to the traditional hedge market. Technically, the important support at $8250. Now, investors foresee the G7 may cut interest rate or QE, the demand of the crypto would rebound.

 

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