ZFX: Spot gold breakthrough! Market sentiment retreats after holiday
Review:
Before the Easter holiday, the financial market sentiment improved, as the Fed announced another $2.3 trillion economic stimulus plan, coupled with the expectation that OPEC+ could reach the production cut agreement, supporting Wall Street to further test the recent highs. However, after the holiday, optimism faded again. The Dow fell more than 1% on Monday (April 13), but the Nasdaq rose for three consecutive trading days.
Finally, OPEC+ and the other major oil producers have reached the historical production cut agreement with an estimation of around 20 million barrels cut per day. However, so far it is not that supportive to the oil market, and the WTI crude futures are still trading at the level of $22 on Tuesday, which in fact dropped from the high before the news.
ZFX analyst Jacob Leung said that even though the market is currently predicting a daily cut of 20 million barrels, it still may not be enough to solve “oversupply” issue. As mentioned earlier, the decline in demand due to the coronavirus outbreak is expected to be over 20 million barrels a day. Also, the implementation period of the agreement is just too short, provided that not all the members will fulfill their own target usually.
The US figures last week were in general not that good. The initial jobless claims in the US was recorded as 6.606 million, the preliminary of the University of Michigan Consumer Confidence Index fell to only 71 in April, and the US consumer price index fell 0.4% in March, which is the largest monthly drop since 2015, prompting investors to be cautious.
US President Trump has indicated that he hopes to restart the economy as soon as possible, but it is reported that there are still differences inside the administration. Trump just emphasized that he can make the final decision soon.
However, the global outbreak has never been better, and the “worst-case scenario” is not very convincing. According to the latest news, more than 1.91 million cases have been confirmed in more than 210 countries around the world, and nearly 120000 people have died. ZFX analyst Jacob Leung said that 2 million is just a matter of time, and the investment market will eventually return to reality.
For the market trends, gold prices rose over $80 during the holiday, that spot gold topped $1700 on Monday, which was a clear break. ZFX analyst Jacob Leung said that the liquidity problems in the market earlier are easing, and all the measures of Fed have put pressure on the dollar. It is not really surprising that the gold market was benefited. The gold market may still perform well due to the uncertainty, especially news of the corporate earnings ahead this week.
AUD/USD
Market theme / sentiment: The dollar is weak and the commodity currency is good.
Support: 0.6400; 0.6350 Resistance: 0.6450; 0.6500
Recommendation: 0.6380 short, target 0.6350, stop loss 0.6400. (Recommendation does not take into account the bid-ask spread factor)
Position follow-up and profit and loss: 0.6170 short, target 0.6130, stop loss 0.6200. (Cancelled) (Recommendation does not take into account the bid-ask spread factor)
Cumulative profit and loss: 555 pips
EUR/USD
Market theme / sentiment: The EU agreement still has uncertainty, limiting the euro rally.
Support: 1.0910; 1.0860 resistance: 1.0970; 1.1000
Recommendation: Go short 1.0970, target 1.0950, stop loss 1.1000. (Recommendation does not take into account the bid-ask spread factor)
Position follow-up and profit and loss: 1.0900 has been long, with a target of 1.0930. (Take profit) 1.0820 short, target 1.0800, stop loss 1.0850. (Cancelled) (Recommendation does not take into account the bid-ask spread factor)
Cumulative profit and loss: 400 pips
GBP/USD
Market theme / sentiment: The British Prime Minister ’s condition is okay, and the British pound continues to go higher.
Support: 1.2530; 1.2490 Resistance: 1.2600; 1.2700
Recommendation: wait and see. (Recommendation does not take into account the bid-ask spread factor)
Position follow-up and profit and loss: 1.2340 short, target 1.2300, stop loss 1.2370. (Cancelled) (Recommendation does not take into account the bid-ask spread factor)
Cumulative profit and loss: 290 pips
GOLD
Market theme / sentiment: Gold price jumped sharply, weak dollar would be the main factor.
Support: 1705; 1690 resistance: 1740; 1760
Recommendation: Go long at 1696, target 1705, stop loss 1687. (Recommendation does not take into account the bid-ask spread factor)
Position follow-up and profit and loss: 1639 short, target 1631, stop loss 1644. (Cancelled) 1658 has been long and hit 1666. (Take Profit) (Recommendation does not take into account the bid-ask spread factor)
Cumulative profit and loss: -54 USD
USOIL(美国原油)
Market theme / sentiment: The news of the production cut agreement has no support to oil prices so far.
Support: 28.00; 27.00 Resistance: 29.50; 30.00
Recommendation: At present, there is a large difference in OTC quotes, no recommendations are made.
Position follow-up and profit and loss: —
Cumulative profit and loss: $ 9.8
US30(道指)
Market theme / sentiment: The market sentiment turns to be cautious so that the U.S. stock market has not yet broken through.
Support: 23400; 23100 Resistance: 24000; 24600
Recommendation: 23300 short, target 23100, stop loss 23500. (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: 23000 long, target 23150, stop loss 22900. (Cancelled)
Cumulative profit and loss: —
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.