Daily Market Outlook, May 12, 2020 

<h2><span>Daily Market Outlook, May 12, 2020 </span></h2>
<p><span><strong>Market risk sentiment and prices are chopping around within ranges, near-term price action reacting to headlines within that process</strong>. Tensions between the US and China and evidence of a ‘second wave’ of Covid-19 cases in China and South Korea were seen as contributing to the current bout of negativity. </span></p>
<p><span><strong>In overnight data, China CPI inflation slipped in April by more than expected</strong> to 3.3%y/y (from 4.3% in March) but food prices rose by 14.8y/y. Despite that, China announced some curbs on food imports from Australia. Looking at the day ahead, US April CPI data will provide an update on inflationary pressures. </span></p>
<p><span><strong>US inflation fell in March and a further sharp reduction is expected for April</strong>, principally because of the big drop in oil prices. Core inflation is also likely to have declined albeit more modestly. Also in the US, the NFIB small business survey for April is expected to show a further deterioration in sentiment. Already released answers to a couple of the questions showed declines in hiring intentions. </span></p>
<p><span><strong>Ahead of Fed Chair Powell’s speech tomorrow</strong>, we hear from a number of other Fed members today. The markets’ focus here on whether they give further assurances that the Fed will now cut interest rates below zero. </span></p>
<p><span><strong>UK monthly GDP data for March are out early Wednesday</strong>. Watchers expect a decline of about 9.5%, which would be consistent with a 3.2% fall for Q1. Last week the Bank of England forecast a 3.0% drop in Q1 and noted that a decline of 25% was possibly in Q2. Also of interest early tomorrow will be the BRC’s April estimate of retail activity, which seems likely to show further slippage in sales outside of the grocery sector. </span></p>
<p><span><strong>The RBNZ are expected to leave rates unchanged at 0.25%,</strong> but reinforce the message that they stand ready to provide further support if the economy needs it</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: 1.0790 (500M), </span><b>1.0800-05 (1.4BLN)</b><span>, 1.0835 (250M), </span><b>1.0870-75 (1BLN)</b><span> massive EURUSD strikes between 1.0750-1.0900 all week</span></li>
<li><span>USDJPY: 106.95-107.05 (800M), 107.70-75 (350M)</span></li>
</ul>
<h3><span>Technical &amp; Trade Views</span></h3>
<p><b>EURUSD Bias: Bullish above 1.08 targeting 1.1050</b></p>
<p><span> From a technical and trading perspective, 1.09 remains pivotal for the achievement of the interim (1.1050) and primary (1.1240) upside objectives. Last week’s defense of the ascending trendline support has renewed bullish spirits. As last week’s lows remain intact on a closing basis then bulls will seek to test offers and stops to 1.10 as the initial upside objective this week. UPDATE massive EURUSD strikes between 1.0750-1.0900 all week</span></p>
<p><img class="aligncenter size-full wp-image-43297" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.52.18.png" alt="" width="2206" height="1240" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.52.18.png 2206w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.52.18-300×169.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.52.18-1024×576.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.52.18-768×432.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.52.18-1536×863.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.52.18-2048×1151.png 2048w" sizes="(max-width: 2206px) 100vw, 2206px" /></p>
<p><b>GBPUSD Bias: Bullish above 1.2350 targeting 1.28)</b></p>
<p><span>GBPUSD From a technical and trading perspective, bids emerged last week at the range support as the trendline Fridays close flipped the daily chart bullish as per the near term volume weighted average price. As 1.2390 supports look for a close above 1.25 to encourage the bullish bias to retest range resistance towards 1.26. UPDATE a close below 1.2270 will be a bearish development targeting a move back towards 1.20</span></p>
<p><img class="aligncenter size-full wp-image-43298" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.54.47.png" alt="" width="2208" height="1234" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.54.47.png 2208w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.54.47-300×168.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.54.47-1024×572.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.54.47-768×429.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.54.47-1536×858.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.54.47-2048×1145.png 2048w" sizes="(max-width: 2208px) 100vw, 2208px" /></p>
<p><b>USDJPY 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 downside objectives opening a retest of range resistance above 109 before lower again</span></p>
<p><img class="aligncenter size-full wp-image-43299" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.55.14.png" alt="" width="2208" height="1235" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.55.14.png 2208w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.55.14-300×168.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.55.14-1024×573.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.55.14-768×430.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.55.14-1536×859.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.55.14-2048×1146.png 2048w" sizes="(max-width: 2208px) 100vw, 2208px" /></p>
<p><b>AUDUSD Bias: Bullish above .6450 targeting .6700)</b></p>
<p><span>AUDUSD From a technical and trading perspective, price testing pivotal .6568 prior cycle highs area if sufficient supply is seen here look for another leg lower to test trend support back to .6330 before another attempt to base and make another run towards the .6700 primary upside objective</span></p>
<p><img class="aligncenter size-full wp-image-43300" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.55.43.png" alt="" width="2209" height="1242" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.55.43.png 2209w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.55.43-300×169.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.55.43-1024×576.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.55.43-768×432.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.55.43-1536×864.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-12-08.55.43-2048×1151.png 2048w" sizes="(max-width: 2209px) 100vw, 2209px" /></p>
<p>&nbsp;</p>
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