ZFX: Optimism move? Investors start to bet on future

Friday (May 8) Review

• The Nonfarm Payrolls last Friday showed 20.5 million job cuts in April, the biggest drop in history since 1939. However, the figures are still better than the expectations of 21.5 million job cuts. The unemployment rate skyrocketed to 14.7%, the highest level since the Great Depression, which was still lower than market expectations of 16%.

• Overall the NFP result was not as bad as expected, boosting the sentiment. Also, investors are now looking forward to the reopening of the major economies, and there was a signs of tension ease between China and the US, further propping up the “risk on” mode. Investors believe that the worst situation has passed and begin to bet on the future. The three major Wall Street indexes all rose, by more than 1%.

• The tension between China and the US is still a focus in the market. Last Friday, Vice-Premier Liu He had a phone call with the US Treasury Secretary Mnuchin and Trade Representative Lighthizer, discussing about the implementation of the Phase-1 trade deal. They agreed to strengthen the macroeconomic cooperation and to improve the atmosphere for implementation of the trade deal. The news was supportive to the risk appetite that putting downward pressure on the greenback and gold price.

• The global pandemic situation is still very uncertain, with more than 4 million confirmed cases worldwide and more than 280000 deaths. Some European countries, Canada and Japan have started to plan to release the lockdown measures by steps. But, on the other hand, signs of second outbreak in South Korea and Germany emerged. For Russia, the outbreak is still severe, with more than 10000 new cases in a single day.

ZFX analyst Jacob Leung said that, in fact the uncertainty is still high, but the whole market so far did not take it very serious. The situation of the global pandemic, the bleak figures, uncertainty of the China-US tension and the possibility of negative rate policy by Fed, were all the variable factors in coming weeks.

AUD / USD

Support: 0.6530; 0.6500 Resistance: 0.6570; 0.6590

Recommendation: wait and see. (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 0.6490 long, not reached, change to 0.6540 long, target 0.6560, stop loss 0.6525. (Pending) (Recommended on May 8) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: 535 pips

EUR / USD

Support: 1.0820; 1.0800 Resistance: 1.0880; 1.0900

Recommendation: Go long 1.0840, target 1.0860, stop loss 1.0820. (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 1.0820 has been long, with a target of 1.0840. (Take profit) (recommended on May 8) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: 425 pips

GBP / USD

Support: 1.2400; 1.2360 Resistance: 1.2460; 1.2500

Recommendations: Long at 1.2450, target 1.2480, stop loss 1.2430. (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: — (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: 305 pips

GOLD

Support: 1700; 1695 resistance: 1713; 1720

Recommendation: wait and see. (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 1705 has been long, not reached the target of 1715, changed to 1709, stop loss changed to 1705. (Holding) 1724 long, target 1730, stop 1717. (Pending) (Recommended on May 8) (Recommended does not take into account the bid-ask spread factor)

Cumulative profit and loss: -3 USD

USOIL (WTI)

 Support: 24.00; 22.50 Resistance: 26.00; 27.00

Recommendation: wait and see. (Pay attention to the OTC quotations may have differences) (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 23.8 short, target 23, stop loss 24.4. (Pending) (Pay attention to the OTC quotations may have differences) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: $ 9.8

US30 (Dow)

Support: 24200; 24000 Resistance: 24650; 24800

Recommendation: 24200 long, target 24400, stop loss 24000. (Pay attention to the OTC quotations may have differences) (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 24000 long, target 24250, stop loss 23800. (Cancelled) (Recommended on May 8) (Pay attention to the OTC quotations may have differences) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: -300 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.