Daily Market Outlook, April 14, 2020

<p><span>Global stocks were mixed on Tuesday ahead of the coming earnings season. U.S. equity market retreated on Monday and its futures are pointing at a flat open on Tuesday. Meanwhile, treasury yield edged lower and while USD traded sideways. The U.S. equity market is expecting another wave of earnings releases from companies this week. </span><b>Uncertainty is the main theme for this earning season as investors are gauging how badly the coronavirus has affected the profitability of companies and industries.  </b></p>
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<p><b>Oil prices ticked higher, as most of the investors showed optimism that the production cut could to some extent, provide support to crude oil prices. Over the past week, the OPEC+ has agreed to reduce output by 9.7 million barrels per day </b><span>in May and June. However, OPEC has expected the global oil demand to plunge 20 million barrels a day, almost double the 9.7 million barrels a day production cut that was agreed upon. Therefore, we maintain the view that </span><b>although the deal could provide some stability, the supply and demand imbalance is limiting the upside of oil prices. </b></p>
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<p><b>The US Dollar Index is moving sideways</b><span> near 99.50 in the absence of fundamental drivers on Easter Monday while </span><b>CAD strengthened slightly against the USD thanks to the stabilizing oil prices. </b><span>The near-term focus will be on the Bank of Canada’s rate meeting scheduled this week. According to TD Securities, “If the BoC forecast errs on the optimistic side (-3.0% or higher on 2020 GDP) then it would imply a lower bar to additional asset purchases or rate cuts; conversely, if the BoC takes a more pessimistic path (-5.0% GDP growth or below), it would suggest that they believe their announced policy stance is appropriate.”</span><b> In the optimistic case, CAD could strengthen further if BOC is confident of using a smaller scale of asset purchases to combat the recession risks.</b></p>
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<p><span>Gold jumped to a new eight-year high on Monday, breaching the psychological $1700 level, notching a new high at $1720. The risk aversion, shown in recent retracement in the stock market, is pushing up the precious metal. Besides, </span><b>gold may be a good asset when investors are expecting central banks to inflate their balance sheets further in the coming months.</b><span> Technically, since gold has surpassed a key resistance level, we could be seeing further upside from here.</span></p>
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<p><b>Besides the manufacturing activities that are picking up in China which led to a higher demand for copper, concerns on the lack of copper supply also helped to push the copper prices higher.</b><span> Disruptions to operations or logistics due to the pandemic in America and Africa have raised supply concerns, which has led to copper futures climbing to their highest in four weeks on Monday. This supply crunch and optimism in China recovery could likely last for some time, providing near-term support for copper prices.</span></p>
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<p><b>Technical &amp; Trade views</b></p>
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<p><b>USDCAD (</b><b>Intraday bias: Bearish below 1.3945)</b></p>
<p><img class="aligncenter size-large wp-image-41702" src="http://blog.tickmill.com/wp-content/uploads/2020/04/1-16-1024×461.png" alt="" width="1024" height="461" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/1-16-1024×461.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/1-16-300×135.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/1-16-768×346.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/1-16.png 1055w" sizes="(max-width: 1024px) 100vw, 1024px" /></p>
<p><span>We remain bearish as price breached our downside confirmation. Once price broke below the downside confirmation, it opens up a larger drop from here towards 1st support. The downside confirmation is a confluence level of horizontal swing low. 1st support which happens to be where the 100% fibonacci extension and horizontal swing low line up well. </span></p>
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<p><b>UKOIL (</b><b>Intraday bias: bullish above 31.10)</b></p>
<p><img class="aligncenter size-large wp-image-41703" src="http://blog.tickmill.com/wp-content/uploads/2020/04/2-11-1024×466.png" alt="" width="1024" height="466" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/2-11-1024×466.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/2-11-300×137.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/2-11-768×349.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/2-11.png 1057w" sizes="(max-width: 1024px) 100vw, 1024px" /></p>
<p><span>We turn bullish for today’s trading.  We are seeing the price approaching 1st support. 1st support happens to be where the 50% Fibonacci retracement and 61.8% Fibonacci extension line up well.1st resistance is where the 78.6% Fibonacci retracement and previous swing high are.  Currently the Ichimoku cloud is also sending mixed signals that if price crosses above the cloud, it could bounce further. </span></p>
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<p><b>XAUUSD ( </b><b>Intraday bias: bullish above 1701.52) </b></p>
<p><img class="aligncenter size-large wp-image-41704" src="http://blog.tickmill.com/wp-content/uploads/2020/04/3-6-1024×468.png" alt="" width="1024" height="468" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/3-6-1024×468.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/3-6-300×137.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/3-6-768×351.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/3-6.png 1052w" sizes="(max-width: 1024px) 100vw, 1024px" /></p>
<p><span>We remain bullish technically as the price is bouncing off 1st support at 1701.52  towards 1st resistance is where the 100% fibonacci extension is. Ichimoku cloud is showing a further push up towards 1st resistance is possible. The 1st support happens to be where horizontal swing high isl and could serve as a key support level. </span></p>
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<p><b>XCUUSD ( </b><b>Intraday bias: Bullish above 2.3375 neutral below)</b></p>
<p><img class="aligncenter size-large wp-image-41705" src="http://blog.tickmill.com/wp-content/uploads/2020/04/4-4-1024×457.png" alt="" width="1024" height="457" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/4-4-1024×457.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/4-4-300×134.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/4-4-768×343.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/4-4.png 1057w" sizes="(max-width: 1024px) 100vw, 1024px" /></p>
<p><span>Our call is still valid. We remain bullish if price supasses upside confirmation at 2.3375. Now price is approaching our new upside confirmation at 2.3375 where the important horizontal overlap resistance is. If price breaks above the upside confirmation, it will open up a bigger bounce. Our previous upside confirmation is now our 1st support, where the 50% fibonacci retracement and horizontal overlap support happen to line up well.</span></p>
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