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ATFX Market Outlook, 2020 April 7
Personal opinions today:
OPEC and other oil producers discuss further cutting production and stabilizing prices as part of an expiring agreement. After last week's discussion, the next meeting was postponed to Thursday. Last night, some producers were willing to accept a collective agreement to cut output, but the Russian government accepted only the original plan. Separately, Saudi Arabia's oil producers are taking a tough line to force the United States into a membership agreement to cut output. Oil producers in Saudi Arabia delayed the release of crude prices of May until after Thursday's meeting, limited the crude oil future price at $28.
Crude oil futures prices rose amid talk that OPEC and other oil producers could eventually reach an agreement to cut output, helping to stave off the risk of oil companies defaulting or going bankrupt and bullish global stocks. Yesterday, the Dow futures index closed up 1627 points. But some of the money has flowed into the gold market because of U.S. fiscal and Treasury risks. Separately, gold and silver prices rose to near three-week highs ahead of the RBA’s decision on interest rates and an emergency meeting of Eurozone finance ministers. Gold rose above $1,644.6 to a high of nearly $1,674 and silver as high as $15.53.
Market forecasts for German industrial output for February, France trade figures for March and UK Halifax house price index for March were weaker than the previous month. The Euro was limited to gains of 1.0830 last night. In addition, the British prime minister infected with COVID - 19 appeared to be in critical condition, bearish pound, GBPUSD fells 100 points, as low as 1.2170. The above factors were bearish for the European currency yesterday. If the number of new confirmed cases of COVID 19 in Europe and the United States drops, it is believed that the European currency is expected to stabilize or rebound today.
[Important financial data and events to watch]
Note: * denotes importance
Eurozone finance ministers to hold an emergency meeting
Eurogroup video conference to be held * *
12:30 RBA releases monetary decision * * *
14:00 German industrial output in February * *
14:45 France trade account in March * *
15:30 UK Halifax house price index in March * *
1730 RBA President speech * * *
22:00 Canada Ivey PMI in March * *
22:00 US JOLTS job openings in February * *
24:00 EIA releases monthly short-term energy outlook * *
Eurozone economic data for March are expected to be weak due to the impact of the coronavirus pandemic. Eurozone and German data released today, investors expect weak, bearish Euro. On using of 4 - hour chart with technical analysis, the Euro extended its decline against the dollar, currently below 1.0830. If it fails to recover, it will remain at 1.0770 or 1.0715. If break 1.0830, look up at 1.0860 or 1.0885 resistance.
The pound to the dollar
Weak data in the Eurozone and the United Kingdom, the lack of significant signs of a decline in the outbreak in Europe, a bearish for pound. Combined with the British prime minister's infection with COVID - 19, the situation is in critical condition, further unnerved investors, the pound has fallen against the dollar. Technically, GBPUSD references resistance to 1.2305 and 1.2320 range. Believe in the fundamentals of the dominant, pound trend still continue to look down, 1.2195 or 1.2180 as reference support.
Australian dollar/US dollar
Australian inflation rose on a monthly basis in March, while the Australian dollar rose early in Asia and indirectly bullish the New Zealand dollar. The RBA raised interest rates today as investors saw little impact on the economy and labor market from the outbreak in Australia, with March job data still flat. Trust the RBA to keep monetary policy unchanged, New Zealand will not change monetary policy, to boost the Australian and New Zealand dollars. However, investors remained on the sidelines of the RBA’s monetary policy outlook after the policy meeting, and investors should watch for changes in the Australian and New Zealand dollars.
Dollar to Japanese yen
Dow futures and the Nikkei index rose, leading the dollar higher against the yen. Investors should continue to look to Dow futures and the Nikkei to catch the dollar rising and falling against the yen. Technically, keep an eye on USDJPY, 109.35 as reference resistance. If Dow futures and Nikkei fall, look for firstly support levels of 108.70 and 108.55. If big movement in Dow futures and the Nikkei, the references resistance and support levels would breakthrough.
US dollar/Canadian dollar
1.4065/1.4050 support level
Crude oil futures price fluctuations, indirect impact on the Canadian dollar. Technically, the USDCAD traded between the 1.40 and 1.43 levels. Any good news from OPEC would push the Canadian dollar higher. But Saudi Arabia's producers remain divided over U.S. participation in the deal and the meeting has been postponed until Thursday. In the short term crude oil future prices may adjust to declining, the USDCAD has an opportunity to test the 1.41 or 1.42 level.
US crude oil futures
The OPEC is discussing production cuts and price agreements with other oil producers has sparked a sharp rally in crude oil future prices, with U.S. crude oil futures trading above $29. But now that OPEC is postponing the meeting, it is believed that U.S. crude futures prices could adjust without any good news. Conservative estimates suggest US crude oil futures price could fall to $25 or $24.
Speculators took advantage of weak U.S. jobs data to push up gold and silver prices. Separately, gold and silver prices were pushed higher ahead of the RBA’s decision on interest rates and an emergency meeting of Eurozone finance ministers. If gold fails to break through $1676 resistance, the rally could slow. Keep an eye on the silver price trend, it would continue to follow the gold price.
Dow Jones industrial average futures US30
U.S. manufacturing and non-manufacturing PMI beat expectations in March, and Dow futures rebounded. On top of that, Dow futures rallied more than 1,000 points as investors saw a slight easing of the U.S. pneumonia outbreak and hopes for an agreement at a meeting of oil-exporting countries. In the afternoon, investors think there is no light at the end of the tunnel on the pneumonia outbreak, the U.S. Easter holiday approaching, investors may make adjustments to stock trading arrangements. If the adjusted wave estimation is used, the important support is at 21800 and the important resistance is at 23490.
7560/ 7800 resistance
6850 / 6700 support
As mentioned here before, the federal reserve launches No limited QE program. Technically, the bitcoin price would rebound. The bitcoin price is looking for $7000 resistance. If break $7000, the bitcoin price would test $7230 or approach to $10,000. Earlier today, the bitcoin broke $7230. The next target would be $7800 resistance, then the further target at $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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