ZFX: Oil prices bounce back? Sentiment turns supportive

Wednesday (April 22) Review

• The oil prices finally bounced back after the dramatic drop earlier. The June WTI crude futures was up 19% mainly due to the expectation of a further production cut from OPEC+. Oil inventories surged less than expected, and tensions have been heightened between the US and Iran after Trump’s instruction, also triggering the rebound. In addition, the market is looking forward to the new economic stimulus package from the US. The three major Wall Street indexes all rose, regaining Tuesday’s lost ground, as risk appetite improved across markets.

• EIA report showed that the crude oil inventories last week surged by 15 million barrels, roughly in line with expectations. The figures to some extent stabilized the oil prices as it eliminated some extremely bearish expectations.

• The global outbreak of new coronavirus remains a key concern for investors, with more than 2.6 million confirmed cases worldwide and more than 180000 deaths. Although some countries have passed the peak period, the WHO warns that the new coronavirus will still exist for a long period of time.

• Pelosi, Speaker of the US House of Representatives, said that the Congress will pass a nearly $500 billion economic stimulus plan on Thursday. On the other hand, President Trump revealed that the next step would be the stimulus packages of infrastructure.

• Trump said that the United States is now safely restarting economic activities and will encourage each state to release the lockdown measures by step.

ZFX analyst Jacob Leung said that the recent fluctuations in market are mainly due to the collapse of oil prices, so stable oil prices will definitely help the market sentiment. However, obviously market sentiment is extremely sensitive over the past few months, and even if oil-producers become more proactive in discussing production cuts, the imbalance issue in the oil market may not be resolved in the short term. On the whole, the pandemic or the oil situation will still be expected to be uncertain until the mid of May.

AUD/USD

AUD / USD fundamentals or market sentiment – market conditions have stabilized, but Aussie is suppressed by strong dollar.

Support: 0.6280; 0.6260 Resistance: 0.6330; 0.6350

View: The Australian dollar is ranging recently.

Recommendation: 0.6350 short, target 0.6330, stop loss 0.6365. (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: 530 pips

EUR/USD

EUR / USD fundamentals or market sentiment – the dollar is still strong, euro is ranging.

Support: 1.0800; 1.0750 Resistance: 1.0840; 1.0880

View: Euro is ranging but volatile.

Recommendation: Go long at 1.0810, target 1.0830, and stop loss at 1.0785. (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 (Stopped) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: 420 pips

GBP/USD

GBP / USD fundamentals or market sentiment – the British Pound has rebounded, with volatility.

Support: 1.2300; 1.2270 Resistance: 1.2350; 1.2380

View: Sterling has not changed its downtrend.

Recommendation: 1.2360 short, target 1.2330, stop loss 1.2400. (Recommendation does not take into account the bid-ask spread factor)

Position follow-up and profit and loss: 1.2350 has been short and has hit the target of 1.2300. (Take profit)  (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: 385 pips

GOLD

GOLD fundamentals or market sentiment – the gold market suddenly in pace with risk appetite, while the dollar still strong.

Support: 1690; 1680  resistance: 1715; 1730

View: The economic stimulus plan may affect the fundamentals of the gold market, so wait and see.

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

Position follow-up and profit and loss: 1683 has been short, and the stop loss is at 1690. (Stopped) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: -42 USD

USOIL

USOIL (WTI) fundamentals or market sentiment – news of further production cuts is positive, oil price tends to rebound.

Support: 14.00; 13.00 Resistance: 16.50; 18.00

View: The rebound shows like a triangle, wait for a breakthrough.

Recommendation: Oil OTC quotes still have big differences, and no recommendations are made at this time.

Position follow-up and profit and loss: —

Cumulative profit and loss: $ 9.8

US30

US30 (Dow) fundamentals or market sentiment – oil prices rebounded, which supported the rebound of US stocks.

Support: 23200; 22900 Resistance: 23500; 23800

View: The Dow bounced back at 23000 level, short-term sentiment turns positive.

Recommendation: 23200 go long, target 23400, stop loss 23000. (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: 23200 has been long, with a target of 23300. (Take profit) (Pay attention to the OTC quotes may have differences) (Recommendation does not take into account the bid-ask spread factor)

Cumulative profit and loss: 0 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.