Daily Market Outlook, May 15, 2020
<h2><span>Daily Market Outlook, May 15, 2020 </span></h2>
<p><span><strong>Risk sentiment in the Asian market was broadly positive following the firmer close in US equity markets</strong>, although it has been under pressure most of this week. Futures point to a positive European open. Brent crude oil price increased above $32pbl. China reported a mixed set of data for April, with industrial production showing greater recovery signs, rising 3.9%y/y, but domestic demand remained much weaker with retail sales down -7.5%y/y.</span></p>
<p><span><strong>Germany will release its first estimate of Q1 GDP this morning</strong>. Market watchers expect a quarter-on-quarter decline of -1.8% (consensus: -2.2%) which would be the biggest fall since the global financial crisis. Monthly data, however, show the German economy was less severely affected by Covid-19 containment measures compared with other major economies in the Eurozone. Much bigger Q1 quarter-on quarter GDP declines have already been reported for France (-5.8%), Italy (-4.7%) and Spain (-5.2%). The preliminary estimate for the Eurozone was -3.8%, with a second estimate also due today. </span></p>
<p><span><strong>In the US, there will be further evidence of the economic hit during April as lockdown measures were implemented</strong>. Figures last week showed 20.5 million jobs were lost during the month. Today, expect retail sales to have fallen by a record 10.0% on the month (consensus: -12.0%), as consumers pared back their spending, especially on nonessential items. April industrial production is likely to have fallen sharply by 10.0% (consensus: -12.0%), with factories closing in response to the coronavirus outbreak. Timelier indicators for the US economy will come from the NY Fed Empire manufacturing and the University of Michigan consumer sentiment surveys. Watchers anticipate a stronger Empire survey to -60.0 in May (consensus: -60.0) albeit from an extraordinarily weak level of -78.2 in April. Also expect some consolidation in consumer sentiment after sharp falls in the past two months, with the headline index at 72.0 (consensus: 68.0) versus 71.8 in April. </span></p>
<p><span><strong>Back in Europe, the latest round of UK-EU talks on their future relationship ends today.</strong> Media reports suggest significant sticking points remain. One more round of talks will take place before the end-June deadline. The UK has insisted it will not request an extension to the transition period.</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>1.07 (870M), 1.0750 (324M), 1.08 (575M), 1.0870 (400M), 1.09 (720M)</b></li>
<li><span>USDJPY: 106.00 (940M)</span><b>, 106.25 (1.5BLN), 106.50 (1.25BLN), 107.00 (2.44BLN), 107.50 (2.2BLN), 107.75 (310M), 108.00 (2.6BLN)</b></li>
<li><span>GBPUSD: 1.2085 (210M), 1.2250 (260M</span></li>
</ul>
<h3><span>Technical & Trade Views</span></h3>
<p><b>EURUSD Bias: Bullish above 1.0750 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 UPDATE watch for reaction at the ascending trendline support towards 1.0750 where there is also sizeable optionality interest, a failure to defend this area would be a berish development opening a move to test year to date lows</span></p>
<p><img class="aligncenter size-full wp-image-43584" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.57.55.png" alt="" width="2206" height="1234" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.57.55.png 2206w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.57.55-300×168.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.57.55-1024×573.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.57.55-768×430.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.57.55-1536×859.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.57.55-2048×1146.png 2048w" sizes="(max-width: 2206px) 100vw, 2206px" /></p>
<p><b>GBPUSD Bias: Bearish below 1.2350 targeting 1.20)</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. Note the breach of the momentum trendline support UPDATE the momentum trendline failure forewarned of the price decline through 1.23 support, as this level contains upside attempts look for a move to test the pivotal support cluster to 1.20 UPDATE noteworthy demand has picked up for GBPUSD FX options that would allow holders to sell the pound at 1.2000 and below over coming weeks. There’s already been demand for early July downside options as concern grows over the June 30 Brexit deadline</span></p>
<p><img class="aligncenter size-full wp-image-43585" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.58.39.png" alt="" width="2212" height="1242" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.58.39.png 2212w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.58.39-300×168.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.58.39-1024×575.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.58.39-768×431.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.58.39-1536×862.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.58.39-2048×1150.png 2048w" sizes="(max-width: 2212px) 100vw, 2212px" /></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-43586" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.58.51.png" alt="" width="2204" height="1236" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.58.51.png 2204w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.58.51-300×168.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.58.51-1024×574.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.58.51-768×431.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.58.51-1536×861.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.58.51-2048×1149.png 2048w" sizes="(max-width: 2204px) 100vw, 2204px" /></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-43587" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.59.22.png" alt="" width="2205" height="1236" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.59.22.png 2205w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.59.22-300×168.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.59.22-1024×574.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.59.22-768×430.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.59.22-1536×861.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-15-08.59.22-2048×1148.png 2048w" sizes="(max-width: 2205px) 100vw, 2205px" /></p>
<p> </p>
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