Daily Market Outlook, April 2, 2020
<h2><span>Daily Market Outlook, April 2, 2020 </span></h2>
<p><b>The new quarter has begun on a poor note for risk assets</b><span>, with chunky falls in the global market, higher credit spreads, and lower US Treasury rates. In currency markets JPY and the USD have outperformed.</span></p>
<p><b>After big falls yesterday on Wall Street and in Europe, Asian equity markets are again mostly down this morning</b><span>. However, US futures prices point to gains today. The oil price has rebounded sharply (Brent crude close to $27bbl from $23bbl on Tuesday) reflecting reports of Chinese buying and rumours of talks to restrict demand. </span></p>
<p><b>US intelligence suggests that China has concealed the extent of the coronavirus outbreak</b><span>, under-reporting both total cases and deaths it has suffered from the disease.</span></p>
<p><b>The number of confirmed coronavirus cases globally has risen above 930,000</b><span>. Italy and Germany have extended their lockdowns to 13th April and 19th April respectively. France and Spain have reported their highest daily death toll but the number is down in Italy. The US Pentagon was claimed to have ordered 100,000 body bags. </span><span>Australia starts putting time limits on ‘draconian’ virus steps.</span></p>
<p><b>PM Johnson said the UK will “massively” increase its testing for Covid19</b><span>. Meanwhile, reports from the UK show that close to 1 million people have applied for universal credit in the last two weeks, around nine times the normal number.</span></p>
<p><b>The EU is set to announce a new €100bn loan plan (a lending scheme with guarantees from EU member countries) to support countries worst affected by COVID19,</b><span> with the funds to help governments pay companies to keep workers in their jobs. It’s another sign of how governments are taking the current economic threat seriously and lessons learnt from previous shocks, as these sorts of policies never got off the ground during the European debt crisis or GFC.</span></p>
<p><b>Weekly initial jobless claims data for the US will provide a timely update on the state of the labour market</b><span>. Last week’s outturn surged to an all-time high, of over 3000k, as employers laid off staff in response to the coronavirus crisis. The latest data, for the week of 28th March is expected to show another big rise with some economists forecasting an increase of over 5000k. </span><b>Today’s report will provide a more up-to-date indication of the state of the US labour market than tomorrow’s labour market report</b><span> – the data for which was collected too early in the month to show the main economic impact of the pandemic. The sharp rise in claims points to a likelihood that the unemployment rate will be substantially higher in April.</span></p>
<h3><b>Today’s Options Expiries</b><span> for 10AM New York Cut (notable size in bold)</span></h3>
<ul>
<li><span>EURUSD: </span><span>109.00 (255M), 1.0985 (350M), 1.1000 (740M), 1.1015-20 (500M) 1.1080-85 (600M), </span><b>1.1120-30 (1.2BLN), 1.1140-55 (1.5BLN)</b></li>
<li><span>GBPUSD: 1.2390 (209M), 1.2425 (200M), 1.2550 (800M)</span></li>
<li><span>USDJPY: </span><b> 106.50 (1.1BLN), 106.90-107.00 (2.3BLN), 107.25-35 (2.3BLN)</b><span> 107.40-45 (670M), </span><b>107.50 (2.5BLN), 107.70-80 (1.6BLN), 108.00-05 (1.2BLN)</b></li>
</ul>
<h2><strong>Technical & Trade Views</strong></h2>
<p><b>EURUSD (Intraday bias: Bullish above 1.0950 neutral below)</b></p>
<p><span>EURUSD From a technical and trading perspective, as 1.0950 attracts buyers bulls will be looking for confirmation of last week’s key reversal pattern, with the weekly candle printing a bullish engulfing pattern. A move through 1.1150 will likely inject further upside momentum opening a move to test offers and stops towards 1.13. A breach of 1.0950 would likely see a border corrective phase to test bids back towards 1.0850. Below 1.08 would suggest a false upside break and set focus back to year to date lows UPDATE corrective structure more defined as 1.1050 holds look for equality objective at 1.0816, as this area is defended, there is a window to set a base and challenge 1.1150 offers and stops above</span></p>
<p><img class="aligncenter size-full wp-image-41080" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.32.52.png" alt="" width="2063" height="1223" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.32.52.png 2063w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.32.52-300×178.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.32.52-1024×607.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.32.52-768×455.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.32.52-1536×911.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.32.52-2048×1214.png 2048w" sizes="(max-width: 2063px) 100vw, 2063px" /></p>
<p><b>GBPUSD (Intraday bias: Bullish above 1.22)</b></p>
<p><span>GBPUSD From a technical and trading perspective, as with EURUSD GBPUSD also printed a key reversal pattern last week as 1.20 now acts as support we can expect to see a test of offers and stop above 1.25. A move back through 1.22 would suggest a broader corrective phase to unwind near term overbought momentum, before another leg higher NO CHANGE IN VIEW</span></p>
<p><img class="aligncenter size-full wp-image-41081" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.33.56.png" alt="" width="2059" height="1219" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.33.56.png 2059w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.33.56-300×178.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.33.56-1024×606.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.33.56-768×455.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.33.56-1536×909.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.33.56-2048×1212.png 2048w" sizes="(max-width: 2059px) 100vw, 2059px" /></p>
<p><b>USDJPY (intraday bias: Bearish below 109.50)</b></p>
<p><span>USDJPY From a technical and trading perspective, another bearish weekly key reversal pattern. As 107 acts as support we will likely see a correction back to tests sellers resolve above 109. Bears will look to make a stand above here to force another leg lower targeting an equality objective towards 105. A move back through 110.85 would concern the bearish thesis and expose stops above 111.85 UPDATE potential near term double bottom may delay downside objective with a whipsaw back to 110 before lower again. Through 107 would suggest downside targets are directly in play</span></p>
<p><img class="aligncenter size-full wp-image-41082" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.35.15.png" alt="" width="2065" height="1218" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.35.15.png 2065w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.35.15-300×177.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.35.15-1024×604.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.35.15-768×453.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.35.15-1536×906.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.35.15-2048×1208.png 2048w" sizes="(max-width: 2065px) 100vw, 2065px" /></p>
<p><b>AUDUSD (Intraday bias: Bullish above .5850)</b></p>
<p><span>AUDUSD From a technical and trading perspective, as buyers defend .5850 look for another corrective leg higher in a three push higher pattern to test the .6135 equality objective from here we should see sellers remerge. Another defence of .5900 would set a platform for a move higher to test .6400. However, a failure at .5900 will open a deeper decline to test .5650. NO CHANGE IN VIEW</span></p>
<p><img class="aligncenter size-full wp-image-41083" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.36.22.png" alt="" width="2057" height="1221" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.36.22.png 2057w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.36.22-300×178.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.36.22-1024×608.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.36.22-768×456.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.36.22-1536×912.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-02-08.36.22-2048×1216.png 2048w" sizes="(max-width: 2057px) 100vw, 2057px" /></p>
<p> </p>
<p><i><span>Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.</span></i></p>
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