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ATFX Market Outlook, 2020 Mar 25

 

Personal opinions today: 

 

The federal reserve to launch an unlimited quantitative easing  (QE) monetary policy. Dow futures rallied more than 2,000 points last night, their biggest one-day gain in 87 years. In response to the news, some safe-haven funds fled U.S. dollar assets, the dollar fell, European currencies received buying support. Under the unlimited QE, commodity prices rallied sharply. Crude oil futures bounced $5 off their lows, while spot gold and silver rallied sharply. Spot gold had risen to $1,638 and futures as high as $1,663. Spot silver rose as high as $14.72, up 26% from Wednesday's low of $11.63. Now, the Fed monetary easing, other countries are expected to follow suit, with the Bank of England meeting tomorrow night and the Swiss national bank's quarterly report and the Bank of Canada holding a two-day financial service meeting from tonight. The British pound, the Swiss franc, and the Canadian dollar may face downward pressure as investors watch central bank policy adjust accordingly, the euro may fall.

 

Gold and silver prices rose, though, in anticipation of a massive monetary easing by the Fed. But the rally in gold and silver prices is expected to stall as investors consider selling gold and silver for higher-yielding, lower-value quality stocks. As a result, the federal reserve is more likely to introduce an unlimited amount of money if congress passes the bailout fund. When equity markets rebound, gold and silver prices are likely to fall. However, under the global easing policy, crude oil prices are expected to try again $28-29 dollars.

 

[Important financial data and events to watch]

Note: * denotes importance

 

17:00 Germany IFO business climate index in march * * *

17:00 Swiss ZEW investor confidence index in march * *

17:30 UK CPI & RPI in February * * * 

19:00 UK CBI retail sales spread in March *

20:30 US durable goods orders in February* * *

21:00 US FHFA house price index in January* * *

22:00 SNB quarterly report * *

22:30 EIA crude oil inventory change **

Bank of Canada financial services meeting ***

 

EURUSD 

1.0850/1.0880 resistance

1.0735/1.0705 support

Investors' confidence in dollar assets fell and some flowed into European currencies after talks broke down in congress over funding for a second stimulus package. Technically, the Euro/dollar’s 4-hour chart calculates a 23.6% rebound in the golden ratio, after breaking through resistance at 1.0840. The euro rose as high as 1.0888 against the dollar after ECB President Christine Lagarde speaks. But now that Europe is on edge and the economic slowdown is intensifying, watch out for the Euro’s fall. It is recommended to bet against the Euro before breaking resistance at 1.09. Breakthrough resistance and look at the 1.11 level.

 

British pound to the dollar

1.1785/1.1805 resistance

1.1685/1.1665 support

The current outbreak, the British finance minister launched the rescue measures, still failed to rescue the British economy. British Prime Minister said he might consider a broader quarantine policy. Technically, the GBP/USD had a 1.1805 resistance. If the fundamentals are the bearish pound, technical moves beyond the 1.1665 support level, next to 1.15 or 1.14 level.

 

Australian dollar/US dollar

0.5985/0.6005 resistance

0.5835/0.5815 support

The United States Congress failed to pass the second round of economic stimulus funding, the dollar fell, indirectly more Australian dollar. Technically, the Australian dollar broke through the $0.5885 important resistance. Another important resistance level of 0.5985 was recommended yesterday. If the AUDUSD breaks the 0.6005 resistance, it could be test 0.6070. On the other hand, investors must take note that if the U.S. congress succeeds in appropriating a second stimulus package, any rebound in the U.S. dollar will cause the Australian and New Zealand dollars to fall.

 

Dollar to Japanese yen

111.35/111.55 resistance

110.35/110.15 support

The dollar/yen fluctuates with the global stock market and leads the trend direction. Technically, you can also track the performance of the USDJPY against the global stock market. Investors must take note that the dollar is poised for a bounce as congress approves funding for a second stimulus package, with the greenback trading above 111.35 or 111.55 yen. Support bit can refer to the recent 110.35 to 110.15 support bit range.

 

US dollar/Canadian dollar

1.4545/1.4565 resistance

1.4360/1.4340 support level

The Canadian dollar rose after crude oil prices rebounded after a slump. Believe that the USDCAD trend continues to be dominated by crude oil prices. Technically, the USDCAD traded between $1.43 and $1.45.

 

US crude oil futures

25.95/26.25 resistance

23.55/23.30 support

Global central banks cut interest rates to stimulate the economy, the federal reserve and other countries jointly launched quantitative easing, which is expected to help stabilize oil prices, while the U.S. government may push second stimulus measures, crude oil can receive buying support. Short-term U.S. crude oil futures are expected to be supported at $23, with resistance at $25.95 or $26.25 and more likely at $28 or $29.

 

Gold

1638/1642 resistance

1585/1581 support

The United States announced emergency measures to increase the size of the repurchase of Treasury bonds and rescue funds. The fed started volume easing and rate cuts, recently estimated in this analysis, these factors are bullish gold prices. Silver, which tends to follow gold, has risen in recent days. Global monetary policy is still expected to be more accommodative, and gold prices are expected to come under pressure until they reach $1,650. Please pay attention to the gold price and silver price correction together, technically target for the gold price to be $1585 or $1581 support.

 

Dow Jones industrial average futures US30

21390/21630 resistance

20110/19915 support

Dow futures hit new lows last night as the outbreak hit investor confidence and corporate earnings. But the fed's plan to launch unlimited quantitative easing to rescue the economy also boosted equity markets. If the U.S. Congress passes an appropriations bill to stimulate the economy, it could continue to boost the stock market in the short term, with resistance at 21,630 just referencing the first major resistance level for now.

 

BTCUSD:

6800/ 7000 resistance

5850 / 5700 support 

The federal reserve launches No limited QE program. Technically, the bitcoin price would rebound. The bitcoin price is looking for $6800  or $7000 resistance. Then, if it breaks $7000, the bitcoin price would test $10,000.