Daily Market Outlook, April 20, 2020
<h2><span>Daily Market Outlook, April 20, 2020 </span></h2>
<p><b>Equities in the Asia market are trading mixed at the start of the new week</b><span>. In particular, Japanese stocks are in the red following the release of weak trade data for March, which reported the trade balance moving to a deficit having been a surplus in February. Exports fell sharply – a sign of the global slump in demand – underlining the likelihood that the Japanese economy contracted in Q1. </span></p>
<p><b>China cut its 1yr Prime lending rate by 20bp to 3.85% and its 5yr rate by 10bop to 4.65%, while the government committed to selling 1 trillion yuan worth of bonds to pay for additional stimulus spending, largely on infrastructure projects</b></p>
<p><b>The global number of confirmed coronavirus cases continues to rise but there are growing signs across a number of countries that the pace of increase is slowing.</b><span> This is fuelling speculation that lockdown restrictions will soon be eased. Several European countries including Austria, Denmark, Italy and Norway have already announced some easing. Meanwhile, Germany confirmed that some ‘non-essential’ shops will reopen this week and schools will start to open in early May. </span></p>
<p><b>US President Trump said that 29 states could open up “relatively soon” and outlined a three-stage guidance plan for Governors to follow in ending lockdowns. </b></p>
<p><b>The UK government, however, has confirmed that the current restrictions will continue until at least 7th May.</b><span> </span></p>
<p><b>Equity markets ended last week on a positive note buoyed by hopes of a relatively early end to lockdowns.</b><span> That has more than offset any negative impact from weak company profit reports, dire economic data and predictions of big near-term declines in economic activity. </span></p>
<p><b>It is a quiet start to what is an otherwise busy week for economic data releases</b><span>, particularly in the UK, which will provide some initial indications of the economic impact of Covid-19. Bank of England policymakers, Haldane and Broadbent, are due to hold a briefing for businesses and community organisations at 0930 BST. They are likely to reiterate the BoE’s readiness to do whatever is required to minimise the disruption the pandemic could cause to business and households – in line with comments made last week by fellow MPC member, Silvana Tenreyro. Early tomorrow morning, the latest update on trends in the UK labour market is expected to be seen as largely ‘old news’, given that much of the report covers the period up to February. However, timelier unemployment claims data for March, may point to the likelihood of a substantial rise in unemployment in the next few months, albeit the data will only cover the period up until the 12th March, before the Department of Work and Pensions reported a large jump in the number of Universal Credit claims</span><b>. </b></p>
<p><b>On the CFTC front, leveraged accounts continue to pull back their implied USD longs</b><span>, while non-commercial accounts increased their implied USD shorts. Asset managers are effectively static in their overall positions. Overall, although the short term players continue to move against the USD, it is done only in a very tentative way, with shifts in overall positioning only marginal. This likely reflects the underlying uncertainty over USD directionality in the near-term</span><b>.</b></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>1.0875-80 (450M)</span><b>, 1.0990 (1.8BLN)</b></li>
<li><span>GBPUSD: 1.2660 (236M), 1.2700 (532M)</span></li>
<li><span>USDJPY: 107.00 (630M), 108.25 (200M), 108.40 (300M)</span></li>
<li><span>EURGBP: </span><b>0.8700 (2.8BLN)</b></li>
</ul>
<h3><b>Technical & Trade Views</b></h3>
<p><b>EURUSD (Intraday bias: Bullish above 1.09 targeting 1.1250 Bearish below targeting 1.0630 )</b></p>
<p><span>EURUSD From a technical and trading perspective, the market continues to rotate in a contracting range, a breach of 1.09 opens a move to test the recent swing high at and the initial equality objective sighted at 1.1036 through here bulls will eye 1.1150/70 as the next upside objective. Failure to sustain trade above 1.09 will likely pressure newly minted EURUSD longs a breach of 1.08 will open 1.0750 en-route to 1.0650</span></p>
<p><img class="aligncenter size-full wp-image-42033" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.24.47.png" alt="" width="1992" height="1220" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.24.47.png 1992w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.24.47-300×184.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.24.47-1024×627.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.24.47-768×470.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.24.47-1536×941.png 1536w" sizes="(max-width: 1992px) 100vw, 1992px" /></p>
<p><b>GBPUSD (Intraday bias: Bullish above 1.22 targeting 1.28)</b></p>
<p><span>GBPUSD From a technical and trading perspective, a move back through 1.24 would suggest a broader corrective phase to unwind near term overbought momentum, 1.20/1.1950 will be pivotal this week, if bulls fail to defend this area, a deeper decline could ensue to test bids and stops below 1.17 </span></p>
<p><img class="aligncenter size-full wp-image-42034" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.26.28.png" alt="" width="1993" height="1224" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.26.28.png 1993w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.26.28-300×184.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.26.28-1024×629.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.26.28-768×472.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.26.28-1536×943.png 1536w" sizes="(max-width: 1993px) 100vw, 1993px" /></p>
<p><b>USDJPY (intraday bias: Bearish below 109 targeting 1.0465)</b></p>
<p><span>USDJPY From a technical and trading perspective, double bottom delays 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-42035" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.28.22.png" alt="" width="2002" height="1219" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.28.22.png 2002w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.28.22-300×183.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.28.22-1024×624.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.28.22-768×468.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.28.22-1536×935.png 1536w" sizes="(max-width: 2002px) 100vw, 2002px" /></p>
<p><b>AUDUSD (Intraday bias: Bullish above .6200 targeting .6700)</b></p>
<p><span>AUDUSD From a technical and trading perspective, as .6200 now acts as support look for a grind higher to set up a test of the pivotal .6430/90 area. A close through here sets bullish sights on the equality objective at .6695. Only a decline back though .6200 would concert the bullish bias</span></p>
<p><img class="aligncenter size-full wp-image-42036" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.30.34.png" alt="" width="1990" height="1261" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.30.34.png 1990w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.30.34-300×190.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.30.34-1024×649.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.30.34-768×487.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-20-08.30.34-1536×973.png 1536w" sizes="(max-width: 1990px) 100vw, 1990px" /></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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