Daily Market Outlook, 05 May, 2020
<h2><span>Daily Market Outlook, May 05, 2020 </span></h2>
<p><span><strong>Risk sentiment in Asia improved after a late rally in the US market</strong> as some countries began to ease or are closer to easing lockdown restrictions. Liquidity remains thin with some markets, including in China and Japan, closed for public holidays. Still, caution prevails as current economic data remains weak and with the risk of a second wave of infections. Investors are also assessing renewed US-China tensions. The RBA (Reserve Bank of Australia) left its policy settings unchanged, including keeping interest rates at 0.25% and maintaining its version of yield-curve control</span></p>
<p><span><strong>Today’s main data release is the US April ISM non-manufacturing survey</strong>, mainly covering the service sector. Market watchers predict a significant decline to 38.0 from 52.5 in March (consensus: 37.8), reinforcing the unprecedented scale of the downturn. The alternative IHS Markit April services PMI (the final estimate of which is also released today) fell to 27.0, the lowest level since the series began in October 2009, as the coronavirus affected numerous industries including recreation and travel. US March trade data are also due and are expected to reaffirm sharply lower import and export activity. Preliminary figures already showed a near 7% fall in goods exports, including autos and industrial supplies such as oil. The Fed’s Evans, Bullard and Bostic are scheduled to speak later today. This week’s main US focus is the monthly labour market report on Friday. </span></p>
<p><span><strong>In Europe, there will be a focus on a German constitutional court ruling on the legality of the ECB’s Public Sector Purchase Programme</strong> (PSPP). The ECB is expected to buy €360bn of bonds under that programme this year. The ruling may have implications for the ECB’s temporary Pandemic Emergency Purchase Programme (PEPP), which commits a further €750bn of purchases this year, particularly as acquisitions under this scheme are conducted in a more ‘flexible’ manner.</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: 1.0850 (250M), 1.0900-15 (900M)</span><b>, 1.0945-55 (1BLN) </b><span>1.1000 (430M)</span><b>, 1.1025-35 (1BLN)</b></li>
<li><span>USDJPY: 106.00 (350M)</span></li>
<li><span>AUDUSD: 0.6405 (470M)</span></li>
</ul>
<h3><span>Technical & Trade Views</span></h3>
<p><b>EURUSD (Intraday bias: Bullish above 1.09 targeting 1.1050 then 1.1240 )</b></p>
<p><span>EURUSD From a technical and trading perspective, 1.09 remains pivotal for the achievement of the interim (1.1050) and primary (1.1240) upside objectives. As prices test the interim objective we could see profit taking pullback to retest support back to 1.09/1.0850 but as this area attracts bids we can see a base develop for another run towards 1.1240. A daily closing breach of 1.0850 would be detrimental to the bullis thesis opening 1.0730 again</span></p>
<p><img class="aligncenter size-full wp-image-42891" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.01.png" alt="" width="2158" height="1241" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.01.png 2158w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.01-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.01-1024×589.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.01-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.01-1536×883.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.01-2048×1178.png 2048w" sizes="(max-width: 2158px) 100vw, 2158px" /></p>
<p><b>GBPUSD (Intraday bias: Bullish above 1.2350 targeting 1.28)</b></p>
<p><span>GBPUSD From a technical and trading perspective,the bullish thesis is under pressure and a close today below 1.2440 would flip the daily chart bearish and open a deeper decline to retest the range base back at 1.2160. UPDATE Daily chart has flipped bearish price continues to rotate around the Daily VWAP, bulls need a move back through 1.25 to encourage the bullish bias continuation, failure to achieve this opens a deeper declining to test the range base back to 1.23</span></p>
<p><img class="aligncenter size-full wp-image-42892" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.14.png" alt="" width="2153" height="1237" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.14.png 2153w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.14-300×172.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.14-1024×588.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.14-768×441.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.14-1536×883.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.14-2048×1177.png 2048w" sizes="(max-width: 2153px) 100vw, 2153px" /></p>
<p><b>USDJPY (intraday bias: Bearish below 107.50 targeting 1.0465)</b></p>
<p><span>USDJPY From a technical and trading perspective, range contraction persists,albeit with a downside bias, a breach of 106.80 should inject downside momentum. A topside breach of 108 would delay donside objectives opening a retest of range resistance above 109 before lower again</span></p>
<p><img class="aligncenter size-full wp-image-42893" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.28.png" alt="" width="2150" height="1230" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.28.png 2150w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.28-300×172.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.28-1024×586.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.28-768×439.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.28-1536×879.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.28-2048×1172.png 2048w" sizes="(max-width: 2150px) 100vw, 2150px" /></p>
<p><b>AUDUSD (Intraday bias: Bullish above .6400 targeting .6700)</b></p>
<p><span>AUDUSD From a technical and trading perspective, the decline back though .6450 concerns the bullish bias, a breach of .6350 would suggest a more meaningful top is in place opening a deeper decline to test support back towards .6150 before another base attempt. On the day a close back through .6500 will be needed to re-engage bullish spirits UPDATE price testing pivotal .6450/70 area if sufficient supply is seen here look for another leg lower to test trend support back to .6330</span></p>
<p><img class="aligncenter size-full wp-image-42894" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.43.png" alt="" width="2146" height="1234" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.43.png 2146w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.43-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.43-1024×589.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.43-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.43-1536×883.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-08.05.43-2048×1178.png 2048w" sizes="(max-width: 2146px) 100vw, 2146px" /></p>
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