Daily Market Outlook, April 3, 2020

<h2><strong>Daily Market Outlook, April 3, 2020 </strong></h2>
<p><b>Risk sentiment was mixed during the Asian market</b><span>, as earlier gains in major equity indices were pared. That followed some confusion about President Trump’s tweet yesterday that Saudi Arabia and Russia had agreed to deep oil production cuts, subsequently denied by President Putin. Brent crude oil fell back below $30bbl after yesterday’s spike. </span></p>
<p><b>Saudi Arabia has called an urgent meeting of OPEC+</b><span> (which includes the usual OPEC member countries and Russia). Oil prices surged more than 20%, albeit from what were the lowest levels since 2002 (in terms of Brent crude). Prices came off their highs of the day after </span><b>Russia denied that Putin had spoken to MBS</b><span>, pushing back on suggestions that this was a done deal, and newswires reported an OPEC delegate as saying that the cartel would merely announce a decision to cut production “eventually”. Huge production cuts (not record high levels of production, as Saudi Arabia is currently undertaking) are needed for the oil market to return to some semblance of balance, given the massive demand destruction taking place due to the global recession. Earlier, Blomberg reported that China would purchase oil to boost its strategic reserves. </span></p>
<p><b>In China, the Caixin March services PMI rebounded more than expected to 43.0 from 26.5, but it remained in contraction territory.</b><span> </span></p>
<p><b>The number of global coronavirus cases topped 1 million. </b></p>
<p><b>The UK government has announced changes to its business emergency loan schemes</b><span>, including the removal or reduction of personal guarantees for small business loans, and government loans extended for mid sized firms with turnover between £25-500m.</span></p>
<p><b>Today’s final March services PMI reports are expected to be revised lower</b><span>, as they incorporate responses from later in the month when lockdown measures were introduced or have been in place for longer. </span></p>
<p><b>In the Eurozone, markets expect a lower print for the final March services PMI</b><span> to 28.2 from 28.4. The preliminary UK services PMI had already slumped to 35.7, covering the period ahead of the government’s decision to close pubs and restaurants. Markets anticipate this morning’s final March reading will be revised down to a new all-time low of 34.8.</span></p>
<p><b>US March services PMI is also expected to be revised lower in the final reading</b><span>, but focus instead will be on the ISM non manufacturing survey and the labour market report. The ISM survey has hitherto remained relatively resilient, but markets expect a sharp fall printing the first contractionary (below 50) since 2009. The consensus forecast is 43.0. </span></p>
<p><b>As for the US jobs data, we have already seen initial jobless claims skyrocket to over 6 million for the week ending 28 March</b><span>, 10 times higher than the 665k peak during the global financial crisis. That should translate into very weak monthly payrolls figures in the period ahead. </span></p>
<p><b>Today’s March payrolls data, however, predate the lockdown (they typically cover the week including the 12th) and are not expected to capture the bulk of layoffs during the month</b><span> which may show up in April instead. Market watchers have pencilled in the first decline in nearly a decade, and the consensus forecast is a 100k decline, although the range of forecasts is extremely wide, also watch for a rise in the unemployment rate.</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>1.0750 (933M), 1.0775 (433M), 1.0900 (584M), </span><b>1.1000 (1BLN)</b><span>, 1.1020 (350M)</span></li>
<li><span>GBPUSD: </span><span>1.2455 (372M)</span></li>
<li><span>USDJPY: </span><b> </b><b>107.00 (1.1BLN), 107.35-45 (1.1BLN), 108.00 (2BLN) </b><span>108.35 (900M), 109.35 (550M)</span></li>
</ul>
<h2><strong>Technical &amp; 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-41147" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.14.42.png" alt="" width="2056" height="1217" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.14.42.png 2056w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.14.42-300×178.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.14.42-1024×606.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.14.42-768×455.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.14.42-1536×909.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.14.42-2048×1212.png 2048w" sizes="(max-width: 2056px) 100vw, 2056px" /></p>
<p>&nbsp;</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-41148" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.14.54.png" alt="" width="2061" height="1216" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.14.54.png 2061w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.14.54-300×177.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.14.54-1024×604.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.14.54-768×453.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.14.54-1536×906.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.14.54-2048×1208.png 2048w" sizes="(max-width: 2061px) 100vw, 2061px" /></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-41149" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.15.09.png" alt="" width="2069" height="1218" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.15.09.png 2069w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.15.09-300×177.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.15.09-1024×603.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.15.09-768×452.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.15.09-1536×904.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.15.09-2048×1206.png 2048w" sizes="(max-width: 2069px) 100vw, 2069px" /></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-41150" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.15.32.png" alt="" width="2056" height="1219" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.15.32.png 2056w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.15.32-300×178.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.15.32-1024×607.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.15.32-768×455.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.15.32-1536×911.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-03-08.15.32-2048×1214.png 2048w" sizes="(max-width: 2056px) 100vw, 2056px" /></p>
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