Market Outlook

ZFX: Market remained cautious ahead of Powell’s speech

13-05-2020 04:23

Tuesday (May 12) Review

Market sentiment became cautious on Tuesday. The Volatility Index (VIX) bounced back and all three Wall Street indexes dropped, of which the Dow lost more than 450 points. Investors are worried the second wave of coronavirus infections, especially after the reopening of the US economy. White House health advisor Fauci warned that the outbreak in the US has not yet under controlled, and the situation may deteriorate if the economy restarts too soon.

The Democrats has announced a new economic stimulus plan more than $3 trillion, but Republicans object the proposal.

Trump once again commented on the Fed policy, calling for negative interest rates. However, several Fed members have shared their views that they have no intention to such decision. Investors now is focusing on Chairman Powell’s speech for the US economy and direction on Wednesday, looking for the guidance from him regarding the negative interest rate policy.

It is reported that Trump may instruct the federal government pension fund not to invest its portfolio in Chinese companies, which involving more than $4 billion.

The global pandemic continued, with 4.2 million confirmed cases worldwide and more than 290000 deaths. The outbreak in Russia has deteriorated further, with more than 230000 confirmed cases already. Investors now are worried the risk of the second wave of outbreak in South Korea, Germany and China.

ZFX analyst Jacob Leung said that so far there is lack of new policies, which can turn the market to “risk on” mode. No good news for the pandemic in the short term and the China-US relation may further impose bearish pressure to the financial market.

AUD / USD

Market remained cautious ahead of Powell’s speech

Support: 0.6450; 0.6400 Resistance: 0.6510; 0.6540

Recommendation: 0.6490 short, target 0.6460, stop loss 0.6515. (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 0.6540 has been long, and the stop loss is 0.6525. (Stop Loss) (Recommended on May 11) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: 520 pips

EUR / USD

Market remained cautious ahead of Powell’s speech

Support: 1.0830; 1.0800 Resistance: 1.0880; 1.0900

Recommendation: Short at 1.0840, target 1.0810, stop loss 1.0865. (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 1.0840 has been long, and the stop loss is 1.0820. (Stop Loss) (Recommended on May 11) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: 405 pips

GBP / USD

Market remained cautious ahead of Powell’s speech

Support: 1.2240; 1.2200 Resistance: 1.2320; 1.2380

Recommendation: 1.2300 short, target 1.2260, stop loss 1.2330. (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 1.2450 long, target 1.2480, stop loss 1.2430. (Cancelled) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: 305 pips

GOLD

Market remained cautious ahead of Powell’s speech

Support: 1695; 1685 resistance: 1710; 1715

Recommendation: Go long 1713, target 1720, stop loss 1707. (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 1705 has been long and has changed target to 1709. (Take Profit) (Recommended on May 11) 1724 long, with a target of 1730 and a stop loss of 1717. (Pending) (Recommended on May 8) (Recommended does not take into account the bid-ask spread factor)

Cumulative profit and loss: 1 USD

USOIL (WTI)

Market remained cautious ahead of Powell’s speech

Support: 25.00; 23.50 Resistance: 26.50; 27.50

Recommendation: short at 26.5, target 25.8, stop loss 27. (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)

Market remained cautious ahead of Powell’s speech

Support: 23500; 23200 Resistance: 24000; 24200

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: 24200 has been long, and the stop loss is 24000. (Stop Loss) (Recommended on May 11) (Pay attention to the OTC quotations may have differences) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: -500 points

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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.

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Ruslan Muratov