ZFX: Massive 3-day rally! Good news boost the markets
Review:
On Thursday (March 26), financial markets continued to improve as the U.S. Senate finally passed a $2 trillion stimulus plan. The three major Wall Street indexes all rose sharply by more than 5%, the Dow regained the 22000 level and technically returned to the bull market (bounce back about 21% from the low, based on closing). Fed Chairman Powell’s assurance that there will be no problems with unlimited QE, supporting the move.
Even though the initial claims announced on Thursday reached a record high of 3.283 million, far more than the market expected, it did not have a significant impact on the market sentiment. Americans are covered by the unemployment benefits and as a result, investors expected more economic stimulus measures.
In addition, G20 members have stated that they are committed to taking all measures to deal with the global pandemic, further driving the risk appetite in the market. G20 leaders promised after the video conference that they would budget US$5 trillion in fiscal expenditures, including credit guarantee programs and other economic measures, to mitigate the impact of the global pandemic on the economy.
What more important is that Fed Chairman Powell said in an interview, expressing the United States is likely to fall into recession. But, as long as the epidemic is under control, he is confident that the US economy will soon recover, emphasizing that the Fed will do everything to support a strong economic rebound. Regarding criticism that the Federal Reserve cannot buy bonds indefinitely, Powell said that there is no problem, ” not going to run out of ammunition.”
The global new coronavirus epidemic continues to be worrying, with the number of confirmed diagnoses worldwide increasing. Currently, more than 510000 people have been infected and more than 23000 people have died.
ZFX analyst Jacob Leung said that several news have regained momentum in the financial market. Even if the global epidemic is still severe, it is expected that this negative factor will not be the main theme this week.
For the market trends, the volatility is still high. The dollar index continued to be under pressure, falling below 100 and approaching the 99 level. After the consolidation at $1600 mark, gold price jumped to $1640 level. However, weak oil market has not seen improvement under the good news, and US oil (WTI) tested $23 level again.
AUD/USD
Market theme / sentiment: The Australian dollar surged after correction.
Support levels: 0.6050; 0.6000 Resistance levels: 0.6130; 0.6200
Recommendation: 0.6000 long, target 0.6050, stop loss 0.5970. (It is recommended not to consider the bid-ask spread factor)
Position follow-up and profit and loss: 0.5850 long, target 0.5880, stop loss 0.5830. (Cancelled) (It is recommended not to consider the bid-ask spread factor)
Cumulative profit and loss: 535 pips
EUR/USD
Market theme / sentiment: The dollar is under pressure so the euro is getting higher.
Support levels: 1.1000; 1.0950 Resistance levels: 1.1100; 1.1150
Recommendations: 1.0950 long, target 1.0980, stop loss 1.0920. (It is recommended not to consider the bid-ask spread factor)
Position follow-up and profit and loss: – (It is recommended not to consider the bid-ask spread factor)
Cumulative profit and loss: 365 pips
GBP/USD
Market theme / sentiment: Sterling surged with no big news, mainly due to weak dollar.
Support level: 1.2100; 1.2000 Resistance level: 1.2300; 1.2350
Recommendation: 1.2300 short, target 1.2200, stop loss 1.2370. (It is recommended not to consider the bid-ask spread factor)
Position follow-up and profit and loss: – (It is recommended not to consider the bid-ask spread factor)
Cumulative profit and loss: 230 pips
GOLD
Market theme / sentiment: Weak dollar supports gold price above $1600.
Support levels: 1600; 1580 Resistance levels: 1635; 1650
Recommendation: The spread widen, wait and see. (It is recommended not to consider the bid-ask spread factor)
Position follow-up and profit and loss: — (It is recommended not to consider the bid-ask spread factor)
Cumulative profit and loss: -70 USD
USOIL(美国原油)
Market theme / sentiment: Oil prices have no support even if risk appetite improved.
Support: 23.50; 22.50 Resistance: 25.00; 26.00
Recommendation: No recommendation due to significant spreads in OTC quotes.
Position follow-up and profit and loss: —
Cumulative profit and loss: $ 9.8
Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX is not responsible for any form of loss caused by any trading operations conducted in accordance with this article. Please be firm in your thinking and take appropriate risk control.