Topic: Hotforex.com - Market Analysis and News. - page 21. (Read 32319 times)

Date : 01st June 2020.

Events to Look Out for This Week.



Geopolitics are back in the picture giving the markets pause and adding another layer of uncertainty to a shaky global outlook. However other than US-China tension, next week the global data dockets are heavy and results are likely to underscore the cratering in global economies this quarter. The calendar includes the US Jobs Report and Monetary policy meeting from RBA, BOC and ECB.

Monday – 01 June 2020

Caixin Manufacturing PMI (CNY, GMT 01:45) – The Caixin manufacturing PMI is expected to slightly improve to 49.6 from 49.4 in May.

ISM Manufacturing PMI (USD, GMT 14:00) – The ISM index is expected to slip to 40.0 in May from 41.5 in April, compared to a recession-low of 34.5 in December of 2008.

Tuesday – 02 June 2020

Interest Rate Decision & Statement (RBA, GMT 04:30)  – The RBA meet and are unlikely to move rates below historic lows at 0.25%, as RBA Gov. Lowe is his recent statement repeated that negative interest rates extraordinarily unlikely. RBA will maintain its expansionary monetary policies until progress is made towards full employment and we are confident on inflation .

Wednesday – 03 June 2020

Gross Domestic Product (AUD, GMT 01:30) – GDP is the economy’s most important figure. Q1’s GDP is expected to slow down at 0.3% q/q and 1.9% y/y.
Unemployment data (EUR, GMT 07:55-09:00) – The German unemployment rate in May is expected to have increased to 6.2% from 5.8%, while unemployment change is expected to have declined to 194K from April’s 373K. Meanwhile, Eurozone’s April unemployment rate should rise to 7.7% from 7.4% last month.

ADP Employment Change (USD, GMT 12:15) – Lasts month, ADP report revealed a -20,236k April drop that undershot the -19,520k private payroll decline by -716k. For May a -9,000k drop is seen, since nearly all measures of activity rose in May from a trough.
ISM Non-Manufacturing PMI (USD, GMT 14:00) – The ISM-NMI index is expected to rise to 46.0 from 41.8 in April. Most producer sentiment reports should show May rebounds after huge April declines due to mandatory closures, on top of the demand hit initially associated with the pandemic, and the oil price plunge with the OPEC price war, as re-openings are underway in most states. The April drop in the ISM survey was much smaller than the declines seen in other measures, however, and this is why we expect a further drop in May for that measure.

Interest Rate Decision and Monetary Policy Statement (CAD, GMT 14:00) – On April 15, the Bank held rates steady at 0.25%, matching widespread expectations. In the next policy statement, the BoC is expected to leave rates unchanged, the Bank of Canada Governor Poloz said is his last interview that negative rates are needed only in extreme conditions.

Thursday – 04 June 2020

Interest Rate Decision, Monetary Policy Statement and Press Conference (EUR, GMT 11:45 & 12:30) – Given that Lagarde buried any hope of a “mild” recession, the stage seems set for an extension of the PEPP program in size and duration at next week’s council meeting with an end date next year giving the economy more time to recover and EU aid programs to come into effect. Given that the ECB is no longer putting much hope in a quick recovery it is already clear that with the current time frame until the end of December that would risk a sharp widening of spreads in the second half of the year, when there is also the risk of a second wave of Covid-19 infections.

Jobless Claims (USD, GMT 12:30)– US initial jobless claims contracted last week by -323k to 2,123k in the week ended May 23 after tumbling -241k to 2,446k previously. Claims have been declining since surging to 6,867k in the March 27 week.

Friday – 05 June 2020

Event of the Week – Non-Farm Payrolls (USD, GMT 12:30) – A -2,200k May nonfarm payroll drop is anticipated, following a -20,527 April collapse, and a -701k drop in March. The jobless rate should rise to 17.5% from 14.7% from April, versus 4.4% in March. Nearly all measures of activity rose in May from a trough just after the April BLS survey week, but the initial and continuing claims data suggest a weaker labor market in mid-May than mid-April. Average hourly earnings are assumed to fall -1.0% with a partial unwind of the April distortion from layoffs being concentrated in low-wage categories. This would translate to a drop in the y/y gain to 6.6% from 7.9%.
Labour Market Data (CAD, GMT 12:30) – Canada employment plunged -1993.8k in April, nearly doubling the -1010.7k tumble in March to leave a massive and rapid reversal in the labour market as firms cut jobs as most of the economy ceased to function amid the stay at home orders the began around the middle of March. For May employment should revealed a 4,000k drop in jobs, doubling again last months number.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 22nd May 2020.

EURUSD – Rejection, Retrace, Sell-Off.



EURUSD, H1

EURUSD has drifted down to a fresh four-day low at 1.0886, driven lower by a broad haven-bid for Dollars as Hong Kong re-emerges as a flash point in US-China, and West-China, relations. The narrow trade-weighted USDIndex (DXY) rose to a three-day high at 99.62, extending the rebound from the 18-day low seen on Wednesday at 99.01. EURUSD continues to trade in a broad consolidation range near the halfway mark of the volatile range that was seen during the height of the global market panic in March, which was marked by 1.0637 on the downside and 1.1494 on the upside. Expectations are for the pair to lack sustained directional bias for now, though political tensions among Eurozone members, coupled with the dollar’s role as a haven, suggest the risks are to the downside, as demonstrated in the H1 chart. Below we can see that there was a rejection of 1.1000 yesterday (1) and a retrace of the initial fall to the 50-hour moving average (2), followed by the sell-off during the Asian and European sessions today (3).

There is little divergence in central bank policy currently, with both the ECB and the Fed pursuing aggressively accommodative policy, with both Europe and the US facing significant economic headwinds from virus-containing lockdown measures. Both are amid the early stages of reopening from lockdowns.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 21st May 2020.

Market Update | 21 May.



Wall Street had closed higher yesterday, but risk appetite started to wane in quiet trade during the course of the Asian session. The US Senate passed a bill that could bar some Chinese companies from listing on US exchanges and fresh criticism from U.S. President Trump of China’s leadership added to concerns that we are heading for a new trade war. The minutes of the last Fed meeting also highlighted the risk to not just economic growth, but also financial stability.

More precisely, the Holding Foreign Companies Accountable Act requires that Chinese companies show that they are not controlled by a foreign government, reports MarketWatch. Moreover, the firms would have to produce an audit that conforms to the standards of the Public Company Accounting Oversight Board.

FOMC minutes had a few points of interest, but none that suggested any changes to the policy stance any time in the foreseeable futures. The minutes of course headlined the economic and human hardships, and worried about potential risks to financial stability. There was the usual run-down on what’s been done in terms of the rate cut and QE. There were a few interesting points of discussion, though the ideas mostly came from the minority on the Committee. The minutes reiterated that while the current stance was seen as “appropriate,” the Committee could “clarify” its forward guidance (which it didn’t really give because of the unprecedented uncertainties). Some participants though they could make guidance more explicit by either adopting an “outcome-based” approach that specified macro outcomes including a certain level of unemployment or and inflation rate. A “date-based” approach could also be used considered and would specify that the target range could be raised after a certain time had elapsed. Several also thought the Fed might also have to further clarify its asset purchase plans, as without which there could be increased uncertainty over time. An ongoing program of Treasury purchases could also be used to “keep long term rates low” — that boarders on yield curve control. And a few suggested the balance sheet could be used to to cap shorter and medium term yields. And of interest, the Open Market Desk surveys showed respondents “attached almost no probability to the FOMC implementing negative policy rates.” Some survey respondents indicated that they expected modifications to the Committee’s forward guidance, but not at the current meeting.

Against that background Wall Street had come off its best levels after FOMC and White house reports, though the major indexes are holding gains of better than 1%. Topix and Nikkei are down -0.07% and up 0.06% respectively, the Hang Seng is down -0.05% and the CSI 300 unchanged on the day, while the ASX is down -0.03%.



In FX markets , the Dollar has picked up safe haven demand as stock markets flagged in the Asia-Pacific region, and with S&P 500 futures correcting most of the gains seen during Wednesday’s regular session on Wall Street. The narrow trade-weighted USD index rebounded to a high at 99.43, up from the 17-day low seen yesterday at 99.01.



The biggest mover out of the main currencies has been AUDUSD, which dropped by nearly 0.5% in printing a low at 0.6549, correcting from yesterday’s 10-week high at 0.6618. Another ratchet higher in the U.S. attacks on China catalysed a risk-off mood in markets, with the White House publishing a 20-page dossier of complaint on China, accusing Beijing of predatory economic policies, military build-up, disinformation, human rights violations. A senior administration official was reported a saying that this does not signal a shift in US policy, and while some may downplay it as part of President Trump’s election strategy, it is clear that the US, and other Western nations, have been growing uneasy about China’s power on the world stage, and are feeling a need to reassert themselves.

Given the potential and realized impact on trade, this is fostering a re-emergence of nervousness in markets. In other news, RBA Governor Lowe warned that without a Covid-19 medical breakthrough the economic recovery will be slow. The New Zealand government said it will allow bars to reopen, and that it is considering a four-day work week. On the data front, preliminary PMIs reported from Australia and Japan showed predictably sharp contractions for manufacturing along with and a deeply contracted but slightly improved reading for services. Export data from South Korea and Japan were also weak. New Zealand credit card spending for April fell 41.3% m/m.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 20th May 2020.

Positive Factors Pushing USOil above $30.



USOil, H4

Oil prices have risen continuously since the big price drop in late April, as the May Futures contracts expired and the concerns over storage capacity peaked. Also demand was lost because of the Covid-19 outbreak and the lockdowns that followed and the trade war between the major oil producing countries.

However, the relaxation of lockdown measures from early May can be considered as the starting point for the return of oil consumption of large countries like China, which yesterday reported demand is now back to normal levels at 13 million barrels per day. The beginning of May also coincided with the major oil-producing countries implementing the reduction of agreed production estimates. This has enabled USOil prices to push above 30 US Dollars per barrel this week.

Another good thing that will benefit the price of oil at this time is the current weakening of the US Dollar.

From a technical standpoint, H4 now sees bullish pennant patterns that tend to keep oil prices going up. The first resistance is at 33.00, which, if able to break through, is likely to continue to Fibonacci 161.8 at 34.15, which is in line with the MACD that is now in the positive territory. And the price is still running within the uptrend channel.

However, resilience to the second wave of the Covid-19 outbreak remains a risk that the market must keep an eye on, after China’s Jilin city was locked down due to an outbreak of 34 new virus cases.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Chayut Vachirathanakit
Market Analyst
HF Educational Office
Thailand

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 15th May 2020.

Mixed outlook for Metals – Base VS Precious.



The Commodity market is mixed, with precious metals finding a near-term lift following the announcement of a double QE program from RBNZ, the comments from Fed Chair Powell on Wednesday and the US Jobless claim release this week. Gold spiked today to its April 23 high at the $1,738 level on  safe haven demand, but interestingly according to RBC the poor jobs data yesterday has translated to a boost for Gold. According to RBC comments to Bloomberg, the jobless claims, from the human perspective,  translated to more stimulus in the near future and to continued lower interest rates , and things that are ‘very friendly for gold’.

The concerns for more stimulus measures to cushion the fall out of the coronavirus outbreak were also raised after the mixed Chinese data, with production rebounding while retail sales remain under pressure. Chinese production figures are normally considered a bellwether data release, both for the Asia-Pacific region and the globe, though the scope for an enduring recovery in activity looks to be limited, with many world economies remaining in a state of semi-lockdown. Hence the uneven recovery picture from China signalled a still bumpy road ahead, especially as new virus hotspots seem to be emerging.



Copper

Other than Gold, Copper prices advanced today on data showing a solid recovery in top consumer China and hopes of more stimulus measures in the global economy. Copper retested the week’s high at 2.3731 (above 50% retracement level on downleg from 2.4270). However from the technical and fundamental perspective , Copper in contrast with Gold faces a limited boost. The 50% retracement level could provide a reversal level for the asset, while from the fundamental perspective, the large copper inventory inflows into LME warehouses and reports of the restarting of mining operations in Peru are adding to the overall bearish sentiment for the asset. As ING stated, LME warehouses yesterday saw copper inflows of around 55.7kt. These large inflows made up for the withdrawals that the market had been seeing since mid-April, and pushed inventories to YTD highs of 282.7kt.



However, for all commodities and energy assets, demand hits and supply hits are what matters the most .Hence for as long as the economy doesn’t get back to pre-virus levels and as long as smelters and refiners do not resume full operations  in China, raw materials are expected to remain in tight supply.

Other precious metals including platinum and palladium are also suffering from weak industrial demand amid lockdowns around the world. Price movements for all three have been negative year to date. Palladium prices have fallen around 35% from the recent highs seen in February, given the pressure that the global auto industry is under at the moment – a key source of demand for palladium.



Therefore, beyond this near-term lift, we assume that the demand-hit from the coronavirus will remain bigger than the supply hit into mid-year, leaving a downward impact on net for global commodity prices. A firm Dollar provides an additional headwind.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 14th May 2020.

AUDJPY Continues as Risk Bellwether.



AUDJPY, H1

US equity markets fell another 1.75% yesterday after Tuesday’s 2% fall as worries about a second wave of the coronavirus persist and Fed Chair Powell offered a pragmatic assessment of the economic consequences and continued his scepticism towards a negative interest rate policy. Today this has followed through with Asian and European stock markets weaker; the Nikkei225 (JPY225) closed down 1.74% earlier at 19,914. In Europe stock markets are also selling off, with the GER30 (DAX) down -1.7% and the FTSE 100 (UK100) down -2.1%. Bond markets meanwhile have extended yesterday’s gains, although both Bunds and Gilts are underperforming versus Treasuries, as Eurozone spreads narrow again with Greek bonds outperforming this morning, likely also thanks to the ECB’s bond buying program, which is likely to be extended as central banks remain on high alert and focused on the devastating impact of lockdown measures on economies. 10-year yields are down -0.4 bp in Germany and the UK, while Treasury yields have dropped -3.4 bp to 0.619%.



In the FX markets the USD and YEN are in demand with pressure on GBP, EUR and AUD with EURUSD edging out a two-day low at 1.0788, driven by dollar firmness amid a bout of risk-off positioning in global markets. The pair is trading to the south of the halfway mark of the volatile range that was seen during the height of the global market panic in March, which was marked by 1.0637 on the downside and 1.1494 on the upside. Expectations are for EURUSD to lack sustained directional bias for now, though the somewhat frayed politics of the eurozone tips the balance toward downside risk. There is little divergence in central bank policy currently, with both the ECB and the Fed pursuing aggressive easing policies, and both Europe and the US facing significant economic headwinds from virus-containing lockdown measures. Europe and the US are now in the early stages of economic reopening strategies, which is being accompanied by concerns that this might spark a second wave of coronavirus infections.

The biggest mover, so far today, remains the risk sensitive AUDJPY, currently down some 0.36% and recovering from a 0.50% decline earlier. The pair remain rangebound on the Daily time-frame from mid April between the 61.8 Fibonacci level and psychological 70.00 and the 50.0 Fibonacci level at 68.00. The 50-day moving average resides at 68.80, the RSI is neutral at 51 and MACD is also neutral although the signal line remains over the 0 line from April 24. The MFI oscillator is declining out of the overbought zone from May 1.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 13th May 2020.

FX Update – May 13 – Sterling Struggling.



GBPUSD & EURGBP, H4

The Pound has been unaffected by dismal UK data, with markets long since desensitized to bad economic figures, which, as the UK finance minister Sunak put it, “are not a surprise,” given the domestic and global lockdowns. UK preliminary Q1 GDP contracted 2.0% q/q while March industrial production contracted 4.2%. Sterling had been trading heavily into the data release, and has remained heavy since. Cable edged out a three-week low at 1.2251, with the UK currency concurrently printing a three-week low against the Euro. The uncertain tone in global equity markets has translated to weakness in the Pound, which has developed a quite strong positive correlation with stock market direction during the pandemic era so far. At prevailing levels Cable is in the lower reaches of the range that’s been prevailing since early April, which in turn marks a consolidation of the gains seen out of the 35-year low at 1.1409 that was seen in mid-March. The key 61.8 Fibonacci retracement level at 1.2450 marks the top of the consolidation whilst the 50.0 level at 1.2250 provides a floor.

Despite the high infection rate and death total in the UK, this week the country has initiated a baby step toward reopening its economy this week, with non-essential manufacturing reopening. However, the government continues to struggle to clarify and simplify its “stay alert” message as many workers try to return today.



The UK and EU are, meanwhile, amid the next round of trade talks. The British government has continued to insist that there will be no delay in the UK’s end-of-year departure from its Brexit transition membership of the EU’s customs union and single market. The UK has until July 1st to commit to this, so the pressure is on negotiators. Markets will continue to factor in the risk that the UK will leave the EU at the end of the year without a new trade deal, as many analysts see there is insufficient time to negotiate a new deal, even though the two sides are starting from perfect equivalence.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 12th May 2020.

Second wave of Covid infections? – Risk-off position in play.



US Equity futures and European bourses are recovering from losses in Asia and are in the green, with the exception of the CAC 40. Many markets in the Asia region have seen a paring in declines during their respective afternoon sessions after China announced a new list of US imports eligible for tariff waivers. China’s state-run Global Times had earlier reported that “unidentified advisers” on the Chinese side were keen to invalidate the “Phase 1” trade deal and renegotiate it, to which President Trump responded with, “not interested. We signed a deal.”

Aside from the fraying in relations between the world’s two biggest economic superpowers, markets are concerned about the risk of a second wave of coronavirus infections as economies reopen from lockdowns. Wuhan in China, the origin of the virus, reported new infections yesterday, as did South Korea, and Russia reported a record daily increase in confirmed cases. GermanY has also seen its “R rate” (the reproduction rate of the virus) rise back above 1, indicating that the virus is spreading exponentially again.



The combo of trade and geopolitical tensions, as well as fears of a second wave of coronavirus infections, looks set to keep risk-off positioning in play, which in turn should be supportive of the Yen versus most other currencies. Meanwhile, USDJPY has been playing a narrow range just below the 19-day low seen yesterday at 107.78, but above its PP at 107.30. The Yen has been losing against commodity and many developing-world currencies so far today, however EURJPY, for example, edged out a five-day high at 116.70 on the back of Yen weakness, breaking above yesterday’s peak, the 61.8% Fib. retracement level since the May drift and the mid of the 1-week upwards regression channel.

The MACD and RSI are positively configured intraday, with the MACD line posting a bullish cross while RSI is sloping northwards above 60. The fast MAs meanwhile are aligned higher. Intraday the next Resistance levels for EURJPY are set at 116.80, 117.00 and 117.35.

The daily/long term picture meanwhile remains on a negative outlook, with the asset having been following a downwards channel since December 2019. The momentum holds at a deep negative area, as MACD and RSI are negatively configured, suggesting that near term outperformance could be proven as another lower high in this long term decline. In the medium term the asset needs to sustain a move above the 20-day SMA but more precisely we need to see a break of the 200-day SMA at 118.00, in order for the overall picture to turn positive.

If sellers manage to gain back the control of the asset, initial support could occur at the 116.00, 115.44 and 115.20 level ahead of a revisit of the multi-year new low of 114.42.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 11th May 2020.

Events to Look Out for This Week.



Welcome to our weekly agenda, our briefing of all the key financial events globally. The week ahead is expected to be dominated by the reopening of states and the easing of lockdown restrictions globally. Safety remains a draw even as the panic that gripped markets in March subsided in April — the path out of lockdown remains subject to myriad risks and uncertainties, most prominently that a lockdown/restart has never been tried on this scale before. The degree of success will be a main driver of stocks, bonds and commodities in May. However for the week ahead more precisely, the key event will be the UK GDP numbers, which will show the damage to the UK economy from the virus, given lockdowns began very late in the quarter.

Tuesday – 12 May 2020

Consumer Price Index (CNY, GMT 01:30) – The April Chinese CPI is expected to have improved on a monthly and yearly basis.

Consumer Price Index and Core (USD, GMT 12:30) – The headline CPI has been estimated at a -0.6% drop in April with a 0.1% core price increase, following respective March readings of -0.4% and -0.1%. The headline will be restrained by an estimated -21% April drop for CPI gasoline prices. As-expected April figures would result in a headline y/y increase of 0.6%, down from 1.5% in March. Core prices should set a 2.0% y/y rise, a down-tick from 2.1% y/y last month.

Wednesday – 13 May 2020

Interest Rate Decision, Monetary Policy Statement and Press Conference (NZD, GMT 02:00) – On March 16, the Bank cut 75 bps to 0.25% and pledged that the rate will remain at that level for at least the next 12 months. In the next meeting, the RBNZ is expected to move to zero or even negative rates, after Governor Adrian Orr said last month that negative rates were not off the table, after New Zealand enforced a strict one-month lockdown to limit the spread of the coronavirus that brought economic activity to a standstill.

Gross Domestic Product (GBP, GMT 06:00) – The preliminary Q1 GDP is expected to have dipped to -2% q/q following the flat reading of Q4. In a yearly basis, we should see a plunge to -1.6% y/y from 1.1%y/y.

Industrial and Manufacturing Production (GBP, GMT 06:00) – The two indices are expected to have declined to -5.8% m/m and -5.6% respectively in March. Such dismal data will suggest that lock downs had a clear devastating impact on the UK economy similar to other economies.

Thursday – 14 May 2020

Labour Market Data (AUD, GMT 01:30) – As the world has changed since March as the pandemic prompted widespread shutdowns of economies across the globe, employment change for 2020 is expected to show a significant increase to the unemployment rates globally. For Australia, the April employment change is expected to have significantly decreased to -40K from 5.9K in March, while the unemployment rate is expected to have increased to 5.5% in April, compared to 5.2% in the previous month.

Harmonized Index of Consumer Prices (EUR, GMT 06:00) – The final German HICP for April is anticipated to remain unchanged at 0.8% y/y.

Jobless Claims (USD, GMT 12:30) – The latest US reports revealed a disappointing round of claims data that prompted downward revisions in April and Q2 growth forecasts. For claims, a 3,169k figure in the first week of May exceeded estimates. But more importantly, continuing claims soared by 4,636k to a much higher than expected 22,647k.

Friday – 15 May 2020

Gross Domestic Product (EUR, GMT 06:00) – German preliminary Q1 GDP growth is seen to have dropped at -2.0%q/q and a deduction of 0.2% from 0.3% in a yearly basis. These estimates follow the first estimate for Eurozone Q1 GDP (April 30) which slumped -3.8% q/q in the first estimate, bringing the annual rate down to -3.3% y/y. A pretty bleak picture in Germany and in the Eurozone that is unlikely to change substantially in the coming months.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

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Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 8th May 2020.

Bitcoin: Is there any value in this rally?



The 8-week rally in Bitcoin breached $10,000 today for the first time since February and is retesting the 10,000-10,500 Resistance area for the third time since September. Other cryptocurrencies saw a similar price action. This has been concomitant with a rally in global equity markets which are pricing-in a reopening of major economies from virus-containing lockdowns, overlooking dismal data (such as a 6% plunge in Japanese household spending, in data released today, and an expected 16% plunge in US April unemployment, in data to be released later) as being backward looking. Yesterday’s unexpected 8.2% y/y rise in Chinese exports in April, contrary to the median forecast for a 14.1% contraction, was a tonic for investors, while news that the US and China have agreed to strengthen cooperation in trade talks has gone down well, too.

However, the main factor that has boosted bitcoin and in general the cryptocurrency market is the anticipation of a major technical event for the digital coin, i.e. Halving. The price of bitcoin is expected to continue to rally in the run-up to the “halving” on May 12.

The reward halving, during which the number of new bitcoins being issued are cut by 50%, takes place every four years in BTC’s case. This halving activity is the breakdown of block mining rewards in half and it makes the cost of mining activity more expensive than ever before. This activity tends to lead to a decline in supply and is directly proportional to an increase in demand, which would theoretically lead to higher prices.

Hence as the cryptocurrency market historically tends to decline after every halving, it seems that investors have increased their interest ahead of the event by boosting the entire market capitalization of the cryptocurrency market by more than $13 billion from a day before. Currently, the value of the entire market stands at $268.07 billion

Other contributory factors probably include the central banks’ monetary policy, as the unprecedented economic destruction is being countered by massive fiscal and monetary policy measures globally. Also Bitcoin has once again rekindled the belief that cryptocurrencies are affected by the global equities performance but also react on major political and geopolitical events. This comes from the fact that cryptocurrency markets plunged following the plummet in oil prices and further sell-off in stocks back in February and March 2020, while they have spiked higher again since March 24 for the same reason, i.e. stocks recovery. Bitcoin more precisely posted more than 150% rebound from $3,762 seen in March, which was slightly above the 2018 bottom.



Bitcoin, from a mathematical perspective, looks to be ready to form another parabolic circle with a potential lower peak after the ones that we have seen in 2017 and 2019. There is a repetitive pattern in Bitcoin with lower wave peaks every time. Hence in the upcoming weeks it will be interesting to see if the asset will manage to sustain the positive sentiment and more precisely remain above the $10,000 level. This level is a key area to be closely watched as it reflects 6-month Resistance, a round number but also the break of the 61.8% Fibonacci retracement since 2019 plunge.

However, as following every halving the market tends to enter a bear market there is also the risk of a reversal if the top is reached. Hence Bitcoin could turn lower again if we see a potential pullback below the 50% Fib. level or even the 20-week SMA, at the 7,900-8,700 area. Hence please bear in mind that Bitcoin has always been and probably remains a very volatile asset subject to huge price swings. Hence the risk of a substantial drop remains.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

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Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 7th May 2020.

Commodities Update.

[​IMG]
Energy

Oil Action: USOIL has steadied on either side of the $23.00 level, though remains down nearly 6% on the day, after printing 3-week highs over $26 overnight. The weekly EIA inventory report yesterday revealed a much smaller than expected rise in crude stocks, but also a larger than expected build in distillate supplies, which offset the mildly bullish crude number. The EIA reported that US production slipped to 11.9 mln bpd in the latest reporting week from 12.1 mln bpd the previous week. March production levels were near 13.1 mln bpd.

Meanwhile, earlier today, the unexpectedly good trade report out of China, which reported an 8.2% y/y rise in exports, contrary to the median forecast for a 14.1% contraction, catalysed a risk appetite, which also lifted the commodities and commodity currencies. Currently the crude prices remain up by over 230% from the low seen near $10 on April 28th, though prices still remain down by over 74% from the highs seen in January, as the oil market is not out of the woods yet, as production cuts have so far been insufficient to offset the huge virus related crash in demand.

Hence, on the products side, EIA data shows that refinery utilisation continues to improve, while from trade side, China’s data shows that economies reopening globally could support the Oil price in the near term .

That said, going forward, focus is on economies that are reopening from virus-containing lockdowns, and how successful, extensive and durable this proves to be. This should rekindle demand for oil and other commodities, which should in turn put in an underpinning for Canada’s currency.

[​IMG]

Metals

Metals meanwhile are trading mixed with gold, copper, silver and platinum trading back from their highs, but at the same time holding well above the year’s plunge, suggesting that there are some signs of a stabilisation in sentiment. Palladium is the exception to this, since it has been trading in a negative territory since the end of March. Chinese data helped in the short term timeframe to partially dispel worries of a negative impact on metals demand via exports, although the detailed data are still unavailable. Nevertheless, the mining disruptions remain and should remain in the near future largely responsible for the tight market in metals since for the time being there is demand only from smelters.

[​IMG]

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 5th May 2020.

Sterling VS data, BoE and lockdown decision!



With RBA out of the way, BoE is the next to announce monetary policy this week. The BoE’s May monetary policy will be accompanied by its quarterly Inflation Report. The central bank has already slashed its policy repo interest rate to near zero while expanding its QE programme and putting in liquidity measures in response to the financial market consequences of the pandemic-forced economic lockdown. As with the Fed and ECB last week, this policy meeting isn’t likely to be too eventful, with the policy framework expected to be left unchanged for now. Large reductions in the central bank’s growth and inflation forecasts can taken as a given in the Inflation Report.

Meanwhile, a more eventful announcement, will be the looming decision on the UK’s lockdown, with the government announcing its review on it this Thursday. Although the five criteria the government has listed as necessary to be met before a phased reopening can commence:

flattening in the infection rate
ability of the health system to cope, with increased diagnostic testing capacity
a sustained and consistent fall in daily death rates with confidence the UK is beyond the peak
enough testing and personal protective equipment (PPE) to meet future demand
that any changes in restrictions will not lead to a second peak
look to be nearing accomplishment, Prime Minister Johnson will reportedly extend the lockdown for a third time, although for how long is uncertain. He will also, reportedly, detail a roadmap to economic reopening in the UK.

And adding to the uncertainties over the extent of the economic recession in the UK are also the weak data reports, with the latest being the UK final April composite PMI. The UK’s final composite PMI was unexpectedly revised higher, to a reading of 13.8 from the preliminary estimate of 12.9.  However this won’t be greeted with joy as the revised outcome still marks a record low (by far) since the series started in 1998,  having plunged from 36.0 in March, and from a reading above 50.0 in February.

The details of the survey reveal record declines in new work and employment, while input costs in the service sector dropped for the first time in the data series. As has been seen in other countries, the service sector drop was eye watering, diving to 13.4 (revised from 12.3) from 34.5 in March, with April being the first month of data to fully capture the true impact of the coronavirus/lockdown.

The data reflects the wide extent of business mothballing due to the pandemic and consequent lockdown, which commenced in the UK on March 23rd. In the manufacturing realm, the small minority of businesses reporting output growth were involved in medical supply chains or producers of food or drink. Many sub-components fell by record amounts, but while staffing levels dropped there were numerous reports that the fall reflected the use of the government scheme to furlough workers. One ray of light came from business optimism for the year ahead, which lifted off its record low that was seen in March, although only modestly, reflecting expectations for a phased reopening of the economy.

In the FX market:

Sterling is trading mixed so far today, dropping against a generally firmer Dollar while gaining versus an underperforming Euro, and holding steady against the Yen. Cable posted an intraday low at 1.2421 after tumbling back from the intraday high at 1.2461. In contrast, euro weakness drove EURGBP over 0.5% lower, to a four-day low at 0.8708. The release of final UK PMI survey data was of no consequence.



In the overall picture however, Sterling remains under pressure against USD which has been extending gains against EUR since last Friday. While the Pound is up by over 8% from the 35-year low that was seen in mid March, the currency remains down by over 6% on the year-to-date.

The UK currency has today once again proved sensitive to the backdrop of falling global stock markets. The combo of the UK’s open economy, current account deficit and outsized financial sector, has made Sterling sensitive to swings in risk appetite in global markets.

If we turn our attention to Cable, the pair is stuck in between the 61.8% and 50.0% Fibonacci retracement of the down leg from 1.3199 to 1.1409, while it is trading for a second day at the mid-Bollinger Band line. The rejection of the 200-day SMA at 1.2643  for a 2nd time reflects the significance of this strong resistance level, while it kept the asset into more than a month range below 1.2600.

To the downside, the 50% Fibo at 1.2300 could be a key level for a potential reversal of a trend lower. Currently, however, the nearterm picture is negative while overall picture is neutral with momentum indicators (RSI at 51, MACD flattened at zero) and BB lines and daily moving averages flattened, suggesting that consolidations could continue in the upcoming days.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 4th May 2020.

Events to Look Out for This Week.



Welcome to our weekly agenda, our briefing of all the key financial events globally. The week ahead will include the RBA & BOE rate announcements, Service PMI’s and topped by Non-Farm Payrolls on Friday and what has been the case for many weeks now, underpinned on how deep the mark will be on the global economy from the COVID-19 crisis.

Monday – 04 May 2020

Final Manufacturing PMI (EUR, GMT 07:00) – The initial reading was a dismal record breaking 33.6. Will the final revision offer any hope of a floor for EU manufacturing?

Tuesday – 05 May 2020

Interest Rate Decision & Statement (RBA, GMT 04:30)  – The RBA meet and are unlikely to move rates below historic lows at 0.25%. A poll by Reuters of 23 economists expects the RBA to leave policy unchanged on all fronts i.e. cash rate and bond purchases with 22 also expecting no more rate changes until the end of 2021.

German Constitutional Court Ruling & EU Economic Forecasts (Both Tentative)  The German Federal Constitutional Court is due to announce a ruling regarding the constitutionality of the ECB’s Asset Purchase Programme. The EU will also announce economic forecasts for all 27 EU member states.

ISM Non-Manufacturing PMI  (USD GMT 14:00) – Last month’s reading of this key indicator was another weak, but much better than expected 52.5 (vs 43.5). Today’s reading is likely to plumb new recent lows at 41 versus an all-time low of 37.6 in November of 2008.

Employment Change & Unemployment Rate (NZD GMT 22:45) – Quarterly jobs data from NZ will be the first big data release and impact of the virus. New Zealand has had a relatively low-level virus impact compared to many countries with an extensive test, trace & track regime, a rapid lock-down and a low death rates.

Wednesday – 06  May 2020

Markit Services PMI (EUR, GMT 07:00) – As with manufacturing the services and composite numbers are expected to make woeful reading expectations range between 13 and 11.
ADP Employment Change (USD, GMT 12:15) – Lasts month’s record -27,000 will be dwarfed by a contraction of over 20 million as the weekly new unemployment claims have been capturing over the last few weeks.

Thursday – 07 May 2020

Trade Balance (AUD, GMT 01:30) – The Australian Trade balance is seen as taking a hit with a rise to 6.8 million AUD, the export /import mix could be severely disrupted.
Interest Rate Decision & Press Conference (GBP, GMT 11:00 & 11:30)  – The BOE officials have already taken substantial steps in the quest to safeguard markets and liquidity provisions as economies face deep recessions this year. No changes expected in rates or outlook or voting expected. New Governor Bailey has had a tough baptism and with the UK still in the grips of virus lockdown his options remain limited.
Jobless Claims (USD, GMT 12:30)– US initial jobless claims dropped last week but still exceed the 3.5 million expected  at 3.789 million. Today the numbers could be under 2 million and if the drop in initial weekly claims continues, this could suggest that the worst might be over, and that the fiscal policy measures are having some mitigating effects on job losses.

Friday – 08 May 2020

Non-Farm Payrolls (USD, GMT 12:30) –  The April NFP plunge is likely to be in the order of of over -20 million following the record fall in March of -700,00 as the full data is collated. The weekly unemployment reports have documented a huge hits to factories  and service industries from mandatory closures, on top of the demand hit initially associated with the pandemic. A record day is expected .

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 1st May 2020.

FX Update – May 1 – Mixed USD



AUDUSD, H1

The commodity currencies have come under pressure after US President Trump soured the mood in equity markets, raising his accusations against China about the coronavirus outbreak, threatening new tariffs while, according to an unnamed source connected to the White House cited by Bloomberg, considering blocking a government fund — the Thrift Savings Plan (which is the federal government’s retirement savings fund — from investing in Chinese equities. Sources cited by Reuters said that a range of options against China were being discussed, but considerations were at an early stage.

The S&P 500 closed on Wall Street yesterday with a 0.9% decline, which capped out the best month the index has seen since 1987 as shares rebounded from the deep declines that were seen in March. Trading in S&P 500 futures has seen losses accelerate, racking up declines of over 2% so far in the overnight session. Trading conditions have been thinned by the absence of Singapore, China and Hong Kong, which are closed today for Labour Day holidays, and with many European countries also taking the day off. Final PMI survey data out of Japan and Australia reaffirmed the dismal economic picture due to the lockdowns.

The biggest mover out of the main currencies has been the Australian dollar, which dropped nearly 1% in posting a three-day low at 0.6446 against the US dollar. The Kiwi dollar also came under pressure, while USDCAD lifted by over 0.6% in printing a three-day high at 1.4027, despite oil prices rising to a two-week high.

Elsewhere, EURUSD has been rooting in the mid 1.09s, holding below yesterday’s 16-day at 1.0937. USDJPY has been holding a narrow range in the lower 107.0s. Sterling has come under pressure, giving back gains seen yesterday. The UK currency has been correlating with global equity market direction, similar to a commodity currency, over the last couple of months. The Swiss franc also remains in demand with USDCHF moving down to 0.9630 from 0.9750 yesterday.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 30th April 2020.

Gold Analysis – 30 April 2020



XAUUSD, H1

• World Gold Council reports 80% year-on-year rise in first-quarter investment demand (MarketWatch)

• Yamana Gold (NYSE: AUY) declares $0.015625/share quarterly dividend, a 25% increase from the prior dividend of $0.0125. (Seeking alpha)

• The Federal Reserve is committed to using its full range of tools to support the US economy in this challenging time, thereby promoting its maximum employment and price stability goals. (FED Statement)

• To support the flow of credit to households and businesses, the Federal Reserve will continue to purchase Treasury securities and agency residential and commercial mortgage-backed securities in the amounts needed to support smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions. (FED Statement)

Step by step governments and central banks need to think about their plan for after the pandemic is over, or is at least under control enough for economies to begin restarting. Reviewing the policies and monetary policies relating to gold, there is one simple and important signal to focus on; the replacing of cash flow into the market. One of the best ways the FED has been accomplishing this is by purchasing physical Gold to support the Bonds and other kinds of assets which have been sold in the past months. As we saw in the FED statement, the doors are open to purchasing more. Alternatively, we need either strong economic growth, which is not likely in the short term, as the main chains are broken and it will take time to replace and repair them, , or, more simply, to replace them with assets such as Gold, even if the “Gold Standard” lost its reputation years ago. On the other hand, trust needs time and it is going to be hard to bring the investors back into the market quickly, so safe havens are still needed. Therefore, for the long term, Gold could still stay bid, as demand is growing.

Gold Technical Analysis

Technical indicators mostly support the side movement, with bullish interest. RSI is flat at 56, OBV trend line is flat too, while Parabolic SAR dots are under the Candles and supporting the bulls. The yellow metal is in a bullish trend, and has $1719 and $1736 to break to confirm its way towards $1800. On the flip side, $1693 and $1684 are the next support levels.

Pivot point: 1709.07
Resistance levels: 1724.41 / 1732.95
Support levels: 1700.55 / 1685.20
Today, the expected trading range is between 1685.20 support and 1732.95 resistance.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Ahura Chalki
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 28th April 2020.

FX Update | 28 April


Commodity currencies have seen moderate losses against the Dollar and other main currencies against a backdrop of sputtering low-volume stock market trading and a turn lower in Oil prices.

EURUSD, H1

The NZD led the way lower for the commodity group after a research note from Westpac hit a bearish chord by forecasting that the RBNZ will take the cash rate to -0.5% in November this year. RBNZ Governor Orr last week said he would not rule out negative rates, and that he was “open minded” on direct monetisation of government debt. NZDUSD dropped over 0.6% in printing a 4-day low at 0.5992.



With the RBA having recently been ruling out going negative with interest rates,AUDNZDrallied to a fresh 6-month high, at 1.0754. The antipodean cross has now risen by nearly 7% since mid March. Note that weekly consumer confidence out of Australia, not normally a market shaker, posted a fourth straight week of improvement from the record low that was seen in March, although the headline is still overall pessimistic at a sub-100 reading of 85.0.

Among the Dollar majors there has been little movement. EURUSD has seen little more than a 20 pip range in the lower 108.00s, holding above yesterday´s 108.08 low. USDJPY has seen a sub-20 pip range in the lower 107.00s, holding above yesterday’s 13-day low at 106.99. The BoJ boosted its JGB purchases as scheduled operation, but to little impact on the Yen.



As for Oil, the hefty declines in oil prices have weighed on the Canadian Dollar, along with other oil-correlating currencies, lifting USDCAD out of a 5-day low at 1.4017 to levels above 1.4070. June WTI futures were showing a drop of 16%, at $10.66, as of early in the London session. This follows news that the United States Oil Fund LP, the largest US oil ETF, said it would sell all its front-month crude contracts to avoid further losses amid collapsing prices.

Goldman Sachs research concluded last week that global oil storage capacity would be reached within three or four weeks, which, once realized, would force a 20% cut in production. Such a cut would be tantamount to 18-20 mln barrels per day, which would be on top of the 9.7 mln barrels per day cut by OPEC++ nations, which will take effect on May 1st. GS estimated it would take between four and eight weeks for crude to base, noting that the production cuts won’t be easy to reverse, which in turn would risk there being a supply deficit.

USDCAD eased from overnight highs of 1.4075, basing at 1.4014 in London morning trade. Risk-on conditions have weighed on the USD generally, though another 16% drop in WTI crude could limit USDCAD’s downside potential. On a positive note, the Western Canadian Select grade of crude is reportedly trading over $6/bbl, a vast improvement from the negative numbers seen for a couple of days last week. In the big picture, oil prices will continue to drive USDCAD direction.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 23rd April 2020.

A dismal day!



EURUSD, H1

Eurozone April PMI numbers looked dismal, with lockdowns across Europe really hitting home this month. The manufacturing sector outperformed, but the reading still dropped to 33.6 from 44.5 in March. Similarly to Japanese numbers this morning, the services sector collapsed and the reading dropped to 11.7 from 26.4.

The hospitality and tourism sectors in particular have been hit and for tourism in particular there is no chance of a quick recovery. The declines were the steepest ever recorded and new business inflows collapsed. Markit reported that “expectations of output in the coming 12 months dropped marginally below the previous nadir in March, thanks to a new record degree of pessimism in manufacturing”. Job cuts accelerated and average prices fell at the sharpest rate since June 2009. Clearly the extent of the slump is pretty scary and will add to pressure on EU heads of states, who today will discuss stimulus measures designed to kick start the recovery once restrictions have eased sufficiently.

A large scale investment program financed through the European Investment Bank is expected, while the EU’s multi-annual budget although any real stimulus can also have a lasting effect once things get back to normal and when that will be depends to a large extend on virus developments, rather than a political will.

Additionally, the German GfK consumer confidence dropped to -23.4 in the May reading from 2.3 in April. A dismal number again and indeed a series low that clearly reflects the impact of crisis measures and highlights that government efforts such as subsidised wages are not sufficient. The full breakdown is only available until April, but already signalled a collapse in business expectations and the willingness to buy as income expectations turn negative.



Stock market sentiment was hit by the numbers and GER30 and UK100 are currently down -0.6% and -0.3% respectively. EURUSD has remained heavy, edging out a low at 1.0783. This is a move outside the 5-day range (1.0810-1.0890). Hence with momentum indicators in the medium and long term remaining strongly negative and with the asset price in a descending triangle since February, a sustenance of a decline below 1.0800 could turn the attention March lows again. However we need to see a decisive daily or weekly candle below 1.0770.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

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Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 22nd April 2020.

Gold Analysis – 22 April 2020.



XAUUSD, H1

Bank of America (BofA) has a bullish view on gold and expects the prices of the precious metal to hit the $3,000 mark per ounce within the next 18 months, according to the bank’s latest report titled “The Fed can’t print gold.” (Barrons.com)¹

At the moment, everything is about the current crisis and what we can do to avoid a deeper economic recession. With the central banks providing more stimulus packages, however, the question is how banks and governments going to cover the cash pumped into the market. As we can see in the BofA report, it is true: the FED can print money, but not Gold. The FED can print money, but it cannot guarantee that it will be good enough for economic engines to restart again, as we do not know how societies will react after this storm. What if, after the international lockdown, people’s habits change and they do not go out right away to spend money on more international travel, have parties or sit in cafes, like they were doing before? In this case, retail sales and services, and, as a result, GDP, will not be able to recover to its previous numbers in a short space of time.

Collective habits always lead the way in showing how an economy is going to grow, this means that the above-mentioned possibilities, does not mean that we will have a worse life or situation in the future, but simply that we will have different ways of socializing, and that, for as long as we are in the “Transition period”, safe havens will be in demand as investors decide where to invest more in the future, which will help the yellow metal and some other safe havens like the USD to grow in the middle term and even longer, perhaps for the next 1-2 years.

Gold technical overview – H1 chart
RSI is flat at 50. The price moved above the OBV trend line, but is also flat, while Parabolic SAR dots are forming under the candles, supporting the bulls. $1694 and $1670, the the upper and lower Bollinger bands, are the resistance and support levels at this time, while gold is trading at the very important level of 1685.

Pivot point: 1682.26
Resistance levels: 1704.26 / 1719.68
Support levels: 1667.12 / 1644.84
Today, the expected trading range is between 1644.84 support and 1704.26 resistance.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

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Click HERE to READ more Market news.

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 21st April 2020.

FX Update – April 21 – USD Remains Bid.



EURUSD, H1

Currencies have once again adopted a risk-off positioning formation as global stock and commodity markets tumble. The Yen, closely followed by the Dollar, have taken the lead in the outperforming pack while the commodity currencies have taken a lead in the underperforming group. Asian stock markets saw their biggest single-day sell-off in a month while the pan-Europe STOXX 600 equity index fell by nearly 2.5% as S&P 500 futures declined by over 1.5% after the cash version of the index closed out yesterday 1.8% for the worse. Yesterday’s oil rout spooked investors, and while some economies are starting to reopen from lockdowns, the road back to normalcy is clearly going to be a long one. Amid this backdrop, the narrow trade-weighted USD index printed a thirteen-day high at 100.37 while EURUSD concurrently ebbed to a four-day low at 1.0819. The Yen outperformed, moderately against the Dollar, but more so against the Euro and even more versus the underperforming commodity currencies. USD-JPY printed a five-day low at 107.29, while EUR-JPY forayed into 19-day low territory. AUD-JPY, a forex market barometer of risk appetite in global markets, and a currency proxy of China, declined by some 0.7% in making a two-week low at 67.40. AUD-USD printed a four-day low at 0.6270. USD-CAD rallied to a 15-day high at 1.4266. While yesterday’s rout in the expiring May WTI contract, and the aberration of negative pricing has come and gone, June futures today have been highly volatile, opening above $21.0, diving to a low at $11.79 before rebounding back above $15.00. One potential support for oil prices is the fast reducing space at crude storage facilities, which is likely to force oil producers into big output cuts. President Trump, also, said that the US is considering halting Saudi oil imports.



EURUSD ebbed to a four-day low at 1.0820, with the pair driven once again by a broader move in the Dollar. EURUSD continues to trade a little to the south of the halfway mark of the volatile range that was seen during the height of the market panic in March. The rapid deployment of monetary stimulus measures by the Fed, and expectations for more, have impacted the Dollar in recent weeks, having satiated what had been a surge in demand for the world’s reserve currency.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date : 20th April 2020.

Events To Look Out For This Week



In the US, weekly jobless claims will remain every week’s highlight. In Europe and the rest of the world, meanwhile, trade and manufacturing data, along with Inflation data, will be the most data-heavy releases. Lastly, European finance ministers will meet again to discuss a way forward.

Monday – 20 April 2020

PBoC Interest Rate Decision (CNY, GMT 01:30) –The People’s Bank of China injected $100 billion into the economy through a reduction in reserve ratios for banks, while it also offered discounts to banks’ reserve ratios of between half and 1 percentage point from their original level.

Tuesday – 21 April 2020

RBA Minutes and Gov. Lowe Speech (AUD, GMT 01:30 & 05:00) – The RBA minutes should provide guidance as to whether the RBA members are actually prepared for further easing. The bank in its last meeting refrained from cutting interest rates,  while pledging to maintain its new (as of March) yield target on 3-year bonds at 0.25%. This, coupled with the Australian government’s fiscal response, was considered a big enough policy response to the prevailing headlines caused by domestic and global coronavirus containment measures.

Average Earnings (GBP, GMT 06:00) – Average Earnings excluding bonus are expected to have grown by 3.2% in February. The ILO unemployment rate is expected to have declined slightly at 3.8% (3M).

Economic Sentiment (EUR, GMT 09:00) – German ZEW economic sentiment for April is expected to have improved slightly at -43.0, after plunging to -49.5 from 8.7 in March.

Retail Sales (USD, GMT 12:30) – February is expected to have flattened (0.0%) for headline retail sales while the ex-auto figure is expected to be unchanged.

Wednesday – 22 April 2020

Consumer Price Index (GBP, GMT 06:00) – Prices are expected to have eased in March, with overall inflation expected to stand at 1.7% y/y, and core at 1.5% from 1.7% y/y last month.

Consumer Price Index and Core (CAD, GMT 12:30) – The average of the three core CPI measures for March is expected to come out lower than last month, at 2.1% y/y from 2.2% y/y.  Economic data is on the back burner as the market grapples with the fallout from COVID-19. Canada has closed its border to all but Americans. PM Trudeau revealed a stimulus plan which is worth about 1% of Canada’s economy.

Thursday – 23 April 2020

European Council Meeting

Retail Sales (GBP, GMT 06:00) – UK retail sales expected to finally give the  first real insight into the UK’s post-lockdown economic hit.

Markit PMI (EUR, GMT 07:30-08:00) – The prel. April manufacturing PMI is forecasted to register a downwards reading  to 40.0  following the 44.5 last month. Services, on the flip side, are seen higher at 39.0 from 26.4.

Jobless Claims (USD, GMT 12:30) – US initial jobless claims fell -1,370k to 5,245k in the week ended April 11 after easing -252k to 6,615k in the week ended April 4. The disruptions from COVID-19 and the government’s policies including containment and relief measures are expected to continue boosting claims to unprecedented levels.

Friday – 24 April 2020

German IFO (EUR, GMT 08:00) – German IFO business confidence is seen drifting to 77.2after it fell back to 86.1 – the lowest reading since 2009. Germany is in lockdown, even if restrictions are still not quite as strict as in other countries, with death rates still relatively low. Still, it is clear that there will be a sharp recession.

Durable Goods (USD, GMT 12:30) – Durable goods orders are expected to fall -13.0% in March with a -23% plunge in transportation orders, after a 1.2% headline orders increase in February that benefited from a 4.6% transportation orders rebound.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.