Daily Market Outlook, April 23, 2020
<h2><span>Daily Market Outlook, April 23, 2020 </span></h2>
<p><span><strong>The Asian equity market traded mostly higher despite weak economic data</strong>, including record lows in Australia PMIs. They found support in the recovery in oil prices, a new US $483bn stimulus package for SMEs (expected to be passed by the House today) and the ECB’s announcement it will accept some junk bonds as collateral if they were only recently downgraded from investment grade. The latter means the ECB can continue to support Italy in case its credit rating is downgraded (S&P review due tomorrow).</span></p>
<p><span><strong>June WTI contracts lifted off lows overnight</strong>, as the crude complex is supported by re-emerging US-Iran tensions. However, we are clearly not out of the woods yet, with indicators of petroleum demand at lows, while stockpiles are at multi-year highs. Nevertheless, that was sufficient to support investor appetite, with global equities and core yield curves broadly higher on the day.</span></p>
<p><span><strong>A slate of business surveys for the UK, Eurozone and the US</strong> will provide further insights into the extent to which economic activity has continued to weaken this month. In the UK, expect further declines in both the manufacturing and services PMIs, consistent with a sizeable fall in GDP. Both are way below the 50 level separating expansion and contraction. The CBI industrial survey will provide a further update on the pressures on the factory sector. The BoE’s Vlieghe speaks at 10:30BST. </span></p>
<p><span><strong>In the Eurozone</strong>, expect the indicators to point to big falls in output in the near term, with further declines in both the PMIs for manufacturing and services. Amid prospects of a steep recession, EU leaders will hold a virtual summit to discuss the impact of the Covid-19 pandemic. The European Commission is reportedly floating a €2 trillion recovery plan, but how it is funded has the potential to cause issues between leaders. </span></p>
<p><span><strong>US Markit PMI indicators are forecast to show a further slump</strong> in both manufacturing and services activity. Weekly initial jobless claims have risen by an unprecedented 22 million over the past four weeks, pointing to the likelihood of a huge jump in the unemployment rate in April. There were some signs in this week’s data of the pace of increase slowing but another big number is expected in the coming week to push the five-week aggregate close to 30m. Housing sales data for March are also likely to have fallen sharply. </span></p>
<p><span><strong>The UK April GfK consumer confidence measure</strong>, due early Friday, is expected to post another sizeable decline too. The ONS will also release March retail sales at 07:00BST on Friday. Market watchers attach weight to stockpiling in supermarkets and believe the sharp fall in discretionary sales probably began only late in the month. As such, a flat print (including fuel), compared with the consensus median of -5.0%m/m.</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: <strong>1</strong></span><strong>.0750 (1.2BLN), 1.0790-1.0800 (3.1BLN), 1.0810-25 (1.5BLN), 1.0830-40 (1.44BLN), 1.0840-55 (2.1BLN) 1.0865-75 (1.2BLN), 1.0900-05 (2.2BLN), 1.0950 (1BLN)</strong></li>
<li><span>GBPUSD: 1.25 (230M). </span></li>
<li><span>AUDUSD: 0.6475 (700M)</span></li>
<li><span>USDJPY: <strong>107.25-30 (1.5BLN), 107.40 (1.2BLN), 107.50 (1BLN), 107.85-108.00 (1.6BLN)</strong>,108.37 (300M), 108.50 (300M), 108.75-80 (650M)</span></li>
</ul>
<h3><b>Technical & Trade Views</b></h3>
<p><b>EURUSD (Intraday bias: Bearish below 1.09 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-42272" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.25.48.png" alt="" width="2127" height="1224" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.25.48.png 2127w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.25.48-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.25.48-1024×589.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.25.48-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.25.48-1536×884.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.25.48-2048×1179.png 2048w" sizes="(max-width: 2127px) 100vw, 2127px" /></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 UPDATE the bullish bias is under threat with yesterday’s sharp sell off opening the possibility of a deeper decline bulls will need to overcome symmetry swing resistance at 1.2385 to renew bullish spirits</span></p>
<p><img class="aligncenter size-full wp-image-42273" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.26.24.png" alt="" width="2123" height="1224" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.26.24.png 2123w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.26.24-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.26.24-1024×590.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.26.24-768×443.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.26.24-1536×886.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.26.24-2048×1181.png 2048w" sizes="(max-width: 2123px) 100vw, 2123px" /></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-42274" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.27.19.png" alt="" width="2136" height="1220" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.27.19.png 2136w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.27.19-300×171.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.27.19-1024×585.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.27.19-768×439.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.27.19-1536×877.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.27.19-2048×1170.png 2048w" sizes="(max-width: 2136px) 100vw, 2136px" /></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 concern the bullish bias</span></p>
<p><img class="aligncenter size-full wp-image-42275" src="http://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.27.52.png" alt="" width="2127" height="1222" srcset="https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.27.52.png 2127w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.27.52-300×172.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.27.52-1024×588.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.27.52-768×441.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.27.52-1536×882.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/04/Screenshot-2020-04-23-08.27.52-2048×1177.png 2048w" sizes="(max-width: 2127px) 100vw, 2127px" /></p>
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