ZFX: Hopes for coronavirus treatment! Optimism maintains

Friday (April 17) Review

• The poor performance of the economic figures released by the US recently had just little effect on the market sentiment last Friday. President Trump announced the guidelines for reopening the economy, which boosted the market sentiment, and the good news from “Remdesivir” developed by US pharmaceutical companies also boosted the hopes on a potential coronavirus treatment, supporting the three major Wall Street indexes all rose, with the Dow rose nearly 3%.

• The Conference Board Leading Economic Index(LEI) for the US declined 6.7% in March, the biggest monthly decline in its 60 years history, but it still was slightly better than the expected which was 7% drop. The data reflects that the outbreak has caused a severe impact to the US corporate, and it is expected that the US economy will contract severely.

• Crude oil demand was still be a big market concern, which is dragging down the investment sentiment. The WTI crude futures kept weak, dropping more than 8% last Friday. In the Monday opening, the WTI plunged further to $14.5 level, a more than 20% drop. The market is still worried that the coronavirus outbreak will continue to hit the global energy demand, and the US may face an even more serious problem for the oil market imbalance.

• The number of confirmed cases worldwide exceeded 2.4 million already and more than 160000 death. However, the increase in numbers all over the world shows that the outbreak situation has eased, and the latest news is that many countries are planning to release the lockdown measures by phase.

• President Trump said that it will be soon reaching an agreement on an additional economic stimulus plan, final decision may be made on Monday.

• The People’s Bank of China announced that it will lower the 1-year loan prime rate (LPR) by 0.2% to 3.85%, while the 5-year LPR will be lowered by 0.1% to 4.65%, both are in line with the market expectations.

ZFX analyst Jacob Leung said that so far the global pandemic is obviously not yet under control, and the performance of the global economy is also very worrying, but the bullish news keep supporting the market sentiment, at least in the short term. If we observe the trend of the dollar, US Treasury and the gold market, showing that no signs of the risk aversion, investors may be just cautious but not pessimistic.

AUD / USD fundamentals or market sentiment – The Aussie recently closely moved together with the global stock market.

Support: 0.6330; 0.6290 Resistance: 0.6370; 0.6400

View: The Australian dollar is consolidating again, dominated by the sentiment.

Recommendation: go long 0.6350, target 0.6370, stop loss 0.6330. (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 0.6340 has been long, first hit the target 0.6360. (Take profit) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: 530 pips

EUR / USD fundamentals or market sentiment – the Euro is mostly driven by the Dollar.

Support: 1.0850; 1.0800 Resistance: 1.0910; 1.0940

View: The euro failed to break down lower, turned to be neutral.

Recommendation: go long 1.0890, target 1.0910, stop loss 1.0875. (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 1.0885 has been short, and the target is 1.0870. (Take profit) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: 455 pips

GBP / USD fundamentals or market sentiment – the UK extended its lockdown measures, triggering Pound volatility.

Support: 1.2400; 1.2300 Resistance: 1.2520; 1.2550

View: Sterling is tended to be ranging likely.

Recommendation: 1.2500 short, target 1.2470, stop loss 1.2530. (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 1.2520 has been short, changed target to 1.2500. (Take profit) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: 335 pips

GOLD fundamentals or market sentiment – risk aversion cooled down, and the gold market is now under pressure.

Support: 1670; 1650 resistance: 1705; 1715

View: The gold price made a double top pattern, seems entering adjustment.

Recommendation: 1695 short, target 1685, stop loss 1706. (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 1699 has been short, hit target of 1685. (Take profit) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: -42 USD

USOIL (WTI) fundamentals or market sentiment – keep falling and nearly whole market was bearish in the short term.

Support: 23.50; 22.00 Resistance: 25.00; 26.50

View: Oil prices may still go further lower in the short term.

Recommendation: There is a significant difference in the OTC quotes in the oil market, and no recommendations are made.

Position follow-up and profit and loss: —

Cumulative profit and loss: $ 9.8

US30 (Dow) fundamentals or market sentiment – Oil prices and economic figures hit the sentiment, limited the uptrend of the US stocks.

Support: 24000; 23800 Resistance: 24300; 24700

View: the market is mixed, bearish news caused a consolidation for DOW.

Recommendation: 24350 long, target 24550, stop loss 24100. (Pay attention to the OTC quotes may have differences) (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 24100 has been long and the stop loss is 23800. (Stopped) (Pay attention to the OTC quotes may have differences) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: -100 points

Risk Warning: The above content is for reference only and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations conducted in accordance with this article. Please be firm in your thinking and do the corresponding risk control.