Daily Market Outlook, March 31, 2020
<h2><span>Daily Market Outlook, March 31, 2020 </span></h2>
<p><b>The Asian market is generally up this morning.</b><span> However, the gains are relatively modest despite a sizeable rise on Wall Street yesterday and better than expected PMI data from China overnight. Meanwhile, crude oil prices remained under pressure with Brent crude hovering around $23bbl (close to a 20-year low). </span></p>
<p><b>The number of confirmed global coronavirus cases has passed 780,000</b><span>, with worryingly cases in the US continuing to soar. However, the WHO said that the situation in Europe is expected to stabilise soon. </span></p>
<p><b>China March PMI data showed big rises in both manufacturing (to 52.0 from 35.7 in Feb) and non-manufacturing (to 52.3. from 29.6) indexes</b><span>. Significantly, both were above the 50 level, which signals expansion. </span></p>
<p><b>Overnight, the UK GfK consumer confidence index held up better than expected</b><span> (-9 from -7) but the Lloyds Business Barometer (6 from 23) reported a sharp slide in business confidence in March. The latter fell to its lowest level since last October. </span></p>
<p><b>German unemployment is expected to have risen by 25k in March</b><span>, which would be its largest monthly rise since last May, while the unemployment rate is expected to have edged up to 5.1% from 5.0% in February. However, the survey date is too early in the month to show a more significant impact from the coronavirus pandemic. So a larger rise in unemployment may be seen next month. </span></p>
<p><b>Already released data for Germany and Spain point to the likelihood of a sharp drop in annual Eurozone CPI inflation in March</b><span>. Market watchers look for a fall to 0.9% from 1.2% in February. That is primarily due to the much lower oil price. A further decline looks likely in coming months. The Conference Board’s measure is forecast to show a sharp fall in US consumer confidence in March. Other measures including that of the University of Michigan have already reported declines and the Conference Board reading is normally particularly sensitive to initial swings in sentiment. </span></p>
<p><b>Yesterday’s strong US equity performance caused US Treasury yields to move up but yields have slipped again overnight</b><span>. Meanwhile, UK gilt yields have continued to edge down, with 10-years hitting a two-week low below 0.35%. The USD appreciated yesterday against both GBP and the EUR. The recovery in US equities is expected to have somewhat diminished to very strong month buy signal for the USD, watch for potential additional volatility around the London fix at 1600BST</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><b>1.1000 (1.6BLN), 1.1015-20 (1BLN)</b><span>, 1.1035 (600M), 1.1050-60 (800M) </span><b>1.1095-1.1100 (1.4BLN)</b><span>, </span><b>1.1120-25 (1.4BLN) Huge strikes between 1.10-1.11 Wednesday too</b></li>
<li><span>USDJPY: </span><span> 107.00 (870M), 108.00 (250M), 108.50 (366M), </span><b>109.00 (1.9BLN)</b></li>
</ul>
<h3><span>Technical & Trade Views</span></h3>
<p><b>EURUSD (Intraday bias: Bullish above 1.0950)</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 NO CHANGE IN VIEW</span></p>
<p><img class="aligncenter size-full wp-image-40902" src="http://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.01.11.png" alt="" width="2055" height="1171" srcset="https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.01.11.png 2055w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.01.11-300×171.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.01.11-1024×584.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.01.11-768×438.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.01.11-1536×875.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.01.11-2048×1167.png 2048w" sizes="(max-width: 2055px) 100vw, 2055px" /></p>
<p><b>GBPUSD (Intraday bias: Bullish above 1.1950)</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-40903" src="http://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.02.18.png" alt="" width="2059" height="1170" srcset="https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.02.18.png 2059w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.02.18-300×170.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.02.18-1024×582.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.02.18-768×436.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.02.18-1536×873.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.02.18-2048×1164.png 2048w" sizes="(max-width: 2059px) 100vw, 2059px" /></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 NO CHANGE IN VIEW</span></p>
<p><img class="aligncenter size-full wp-image-40904" src="http://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.02.39.png" alt="" width="2069" height="1170" srcset="https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.02.39.png 2069w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.02.39-300×170.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.02.39-1024×579.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.02.39-768×434.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.02.39-1536×869.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.02.39-2048×1158.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-40905" src="http://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.03.22.png" alt="" width="2054" height="1169" srcset="https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.03.22.png 2054w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.03.22-300×171.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.03.22-1024×583.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.03.22-768×437.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.03.22-1536×874.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-31-08.03.22-2048×1166.png 2048w" sizes="(max-width: 2054px) 100vw, 2054px" /></p>
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