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ATFX Market Outlook, 2020 Mar 19

 

Personal opinions today: 

 

The coronavirus spread in Europe and the United States has not stopped. Many countries have implemented the policy of working from home, restricting citizens from going out, commercial activities have dropped significantly. The production and operation of enterprises are facing a major crisis, and the assessment of financial institutions is more frightening than the subprime crisis. U.S. President signed a second relief bill and is preparing to enact more measures to stabilize and stimulate the economy, which has not fully stabilized markets and investor confidence. Overall Dow futures continued to fall, with money flowing mainly into the safe-haven bond market and, more importantly, into U.S. bonds and the dollar. Gold also fell. The dollar index rose to 101, falling against the greenback across the board.

 

The President of the European central bank (ECB) abruptly announced a 750 billion euro bond-buying program at the start of trading in Asia to ease economic tensions. But the market still thinks the effort is insufficient and more important to contain the outbreak. The Reserve Bank of Australia announced monetary policy measures at 11:30 this morning and the Swiss national bank announced its interest rate decision at 16:30 this afternoon. Separately, U.S. weekly initial jobless claims were in focus at 20:30.

 

[Important financial data and events to watch]

Note: * denotes importance

 

05:45 New Zealand Q4 GDP * *

07:30 Japan February core CPI annual rate * *

08:30 Australia unemployment rate in February *

11:30 RBA announces monetary policy measures * *

13:00 RBA President Lowe speech * *

15:00 Swiss trade account in February * *

16:30 Swiss national bank announces rate decision * * *

20:30 U.S. Q4 current account * *

20:30 U.S. jobless claims last week * * *

20:30 U.S. Philadelphia fed manufacturing index for March **

22:00 U.S. February CB leading indicators * *

 

EURUSD 

1.0950/1.0960 resistance

1.0865/1.0855 support

The federal reserve has launched a $700 billion bailout and the U.S. government has spent $1 trillion to prop up the market. Separately, the President of the United States announced a second stimulus package for the economy. Today, the European central bank only launched a $750 billion bond-buying program, which investors see as vulnerable to uncertainty about Europe's economic outlook. Add to that the fiscal pressures in the eurozone, and it's a negative for the euro. Technically, watch for resistance at 1.1960 and look down at 1.0855 support or possible levels.

 

British pound to the dollar

1.1645/1.1660 resistance

1.1415/1.1400 support

At present, the financial rescue measures launched by the British finance minister failed to relieve the difficulties of the British economy, and the pound fell. Next week, the Bank of England will raise interest rates. If the Bank of England fails to timely launch such measures as the federal reserve to rescue the market, the pound will try to lower the level of the dollar, such as 1.10. Believe that in the short term, the dollar did not see weakness, pound /dollar resistance level reference 1.1660.

 

Australian dollar/U.S. dollar

0.5835/0.5900 resistance

0.5625/0.5580 support

New cases of pneumonia are on the rise in Australia after the RBA stepped up its efforts to prop up the market and said it would push for new bond purchases at a meeting today. If the RBA simply releases more liquidity into the market without any other stimulus package, it will continue to be bearish for the Australian dollar. Temporarily, the first target of 0.5625 and 0.5580 support, 0.5900 as important resistance.

 

Dollar to Japanese yen

109.05/109.35 resistance

107.85/107.55 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 a bearish effect on the Japanese yen. Just the market sentiment is dominant, mainly see the dollar and the yen continue to be driven by the stock market as a safe haven tool unchanged. It is recommended to watch the stock market fluctuations, tracking the trend of the dollar to the Japanese yen.

 

U.S. dollar/Canadian dollar

1.4645/1.4665 resistance

1.4380/1.4360 support level

Crude oil prices plunged last night, hitting $20.70 and the Canadian dollar fell. And after the oil price rebound, the Canadian dollar followed the rebound. Believe that the short-term USDCAD trend continues to be dominated by oil prices.

 

U.S. crude oil futures

25.80/26.25 resistance

21.05/20.65 support

Interest rate cuts by worldwide central Banks to stimulate the economy is expected to boost investment and consumer confidence. The start of quantitative easing by the federal reserve and a second effort by the U.S. government to stimulate the economy could help stabilize oil prices. Technically, there was buying support at the $20 level in the United States, allowing prices to rebound. Believe that below $22, technical bid more, it fell to 21.05 or 20.65 support is not recommended to short.

 

Gold

1515/1520 resistance

1473/1468 support

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, investors estimated more bullish gold prices. Current estimates, global monetary policy is still to increase the intensity of easing measures, gold prices are expected to continue to rise. Technically, the latest offers at $1, 473 and $1, 468 are worth noting. Just the recent volatility of gold prices, pay attention to money management.

 

Dow Jones industrial average futures US30

20485/20655 resistance

18825/18655 support

U.S. Dow futures have been trending lower, reflecting recent declines as the outbreak has affected investor confidence and corporate earnings. Of course, the start of quantitative easing by the federal reserve and more economic stimulus measures are expected to guide money into equity assets and the stock market is expected to rise. Keeping an eye out for an easing of the coronavirus in the U.S. and Europe could boost stocks.

 

BTCUSD:

5850/ 6000 resistance

4550 / 4300 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. First target at $6000, then looking for higher.