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ATFX Market Outlook, 2020 Mar 18

 

Personal opinions today: 

 

On Monday, the federal reserve cut interest rates by 100 basis points and began a $700 billion quantitative easing program. Last night the US government unveiled a $1 trillion rescue package, includes tax cuts and pay up to $1,000 per American citizen. Separately, the Treasury secretary plans a $500 billion loan and stabilization fund for small businesses. Dow futures rebounded more than a thousand points, recovering some of their recent losses. With the US rescue plan, gold rallied 5.6% to as high as $1,555 and silver as high as $13.16. Dow futures rebounded, the Nikkei rose and the dollar to Japanese yen climbed back above 107 level. Investors continue to closely monitor how the latest news from the U.S. government and federal reserve affects Dow futures, the dollar index and precious metals such as gold and silver price. Please keep watching the market sentiment.

 

Today, there are important data releases in Europe, the Eurozone released February CPI monthly and annualized final value and the Eurozone January trade account. US trading session, Canada released February CPI. Please note the cancellation of the FOMC regular meeting and press conference. In addition, investor sentiment dominates the market, non-general technical analysis can be mastered, it is recommended to keep an eye on market news. Recently, most investors would look to market correction in the Asia trading session. Then, in Europe and the United States session would return to swings. In this period, high-value market news, strictly control capital and positions.

 

[Important financial data and events to watch]

Note: * denotes importance

 

18:00 Eurozone CPI final in February ***

18:00 Eurozone January trade account **

20:30 U.S. total housing starts in February *

20:30 U.S. total building permits in February *

20:30 Canada CPI in February * * * 

22:30 EIA crude oil inventory change * * 

Regular FOMC meeting and press conference canceled ***

 

EURUSD 

1.1050/1.1060 resistance

1.0950/1.0940 support

As the pneumonia epidemic spread in Europe and the United States, the federal reserve launched $700 billion in quantitative easing and a trillion-dollar rescue fund. But the ECB has been unimpressed by what investors see as rising fiscal pressure on the European economy, which is bearish for the Euro. But with the European central bank's multi-year lower interest and TLTRO, now the U.S. government and the federal reserve joining in, the dollar is falling and the Euro is expected to rise. Technically, note the 1.1940 support bit.

 

British pound to the dollar

1.2195/1.2205 resistance

1.1975/1.1965 support

An earlier interest rate cut by the Bank of England and yesterday's rescue by the chancellor of the exchequer pushed sterling to 1.20. With the Bank of England expected to follow the fed's lead and likely to cut interest rates further, pound dollars is testing the 1.20 level, keeping an eye on support at the low of 1.1965 in 2017 and 2019. Watch for resistance at 12205, with a break at 1.2365.

 

Australian dollar/US dollar

0.6035/0.6045 resistance

0.5950/0.5940 support

New pneumonia outbreak in Australia rose, the Reserve Bank Australia to boost the fund to rescue the market. The Australian federal reserve has said it will increase its response plan tomorrow, believed to release more liquidity into the market, a bearish for the Australian dollar. But the relevant policy has long been forecast, the Australian dollar has been reflected in the fall, once fell below the 2008 low of 0.6010. Technically, one of the key support levels is estimated at 0.5940. If there is no breakthrough tomorrow, it is expected to test the level of 0.61.

 

Dollar to Japanese yen

107.75/107.85 resistance

106.35/106.25 support

The Bank of Japan increased its purchases of derivatives ETFs, freeing up liquidity and making it easier for companies to lend. These measures did not have bearish on the yen. Market sentiment dominated, mainly to see the dollar/yen continued in the stock market, as a safe haven tool unchanged. It is recommended to watch the stock market fluctuations, tracking the trend of the dollar/yen.

 

US dollar/Canadian dollar

1.4280/1.4300 resistance

1.4135/1.4115 support

Global central banks continue to launch measures to support the market, but many countries in Europe and the United States to implement different restrictions on residents go out less, the economic outlook is less optimistic, oil demand further decline, the price of crude oil fell bearish Canadian dollar. Technically, the USDCAD broke the 1.40 level and moved into the 1.42-1.43 level. Canada released February CPI, which may be volatile in the short term. However, the crude oil price trend continues to dominate the Canadian dollar, please keep a high watch.

 

US crude oil futures

29.80/30.25 resistance

26.05/25.85 support

Global central banks cut interest rates to stimulate the economy, boosting investment and consumer confidence. In the past, the Fed actions in starting the quantitative easing program have stabilized oil prices, which then rose. At present, European and American countries suggest that residents go out less, the economic atmosphere is not optimistic. U.S. crude oil futures were trading in a $26 range but could attract buying, lifting prices back above $30 to $31.

 

Gold

1558/1560 resistance

1505/1503 support

The Fed 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, investors estimated that it could bullish gold prices. There was increasing, gold price rose last night, with prices climbing to $1,555. Current estimates, global monetary policy is still to increase the intensity of easing measures, gold prices are expected to continue to rise. Initial estimates are that at the $1,500 level, gold is supported, with initial resistance in the $1,560 - $1,600 range.

 

Dow Jones industrial average futures US30

20780/21300 resistance

20170/19905 support

An aggressive fiscal policy by the Fed and the U.S. government that is expected to rescue the economy has unsettled investors, with Dow futures trading broadly lower without a strong rebound. 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. Keep an eye out for signs of easing in the U.S. and Europe, boosting stocks.

 

BTCUSD:

5850/ 6000 resistance

4550 / 4300 support 

The Fed decision to cut interest rates by 100 basis points and start a worth $700bn in the QE program. Technically, the bitcoin price would rebound. First target at $6000, then looking for higher.