Daily Market Outlook, March 30, 2020
<h2><span>Daily Market Outlook, March 30, 2020 </span></h2>
<p><b>The global financial market has started the week on the back foot</b><span> as concerns over a prolonged fight against the coronavirus continues to weigh on sentiment. Most Asian equity markets are down this morning, albeit they are off their lows following China’s central bank’s decision to cut the interest rate it charges on loans to banks. Meanwhile Brent crude oil dropped to new lows with front-month prices dropping below $24pb. Concerns of a prolonged fight against the coronavirus remain the main concern and follows US President Trump’s decision to extend the national social distancing guidelines through to April 30. </span></p>
<p><b>As the number of reported cases of covid-19 and related deaths continues to rise</b><span>, government’s remain focused on what measures are still likely to be needed to tackle its spread and its economic damage. Meeting via video-link last week, EU-27 leaders clashed over the best response to the crisis. A number of countries – including Spain, France and Italy – favoured the issuance of EU-backed debt or ‘coronabonds’. However, the idea of the debt burden being shared was shunned by some other member states – including Germany, Austria and the Netherlands – who instead preferred the likes of Italy to ask for funds through other means including the European Stability Mechanism, where they come with strings attached. The task of finding a solution has been left to EU finance ministers, who are expected to hold a conference call this week (possibly as early as today) to find a workable solution.</span></p>
<p><b>For today, March inflation prints from Germany and Spain</b><span> are likely to go largely unnoticed, as the focus remains on the economic fallout from measures aimed at containing the spread of the virus. In that regard, EU-wide confidence measures for March from the European Commission are expected to show sharp declines, echoing the message from national surveys across the EU.</span></p>
<p><b>The trajectory of Chinese data may be a future template for other major economies</b><span>. China’s PMIs plunged to record lows in February, but are expected to rebound in March. The official manufacturing and non-manufacturing surveys (Tue) are predicted to rise to 45.0 (from 35.7) and 42.0 (from 29.6), respectively, though still remaining below the key 50 expansion/contraction level.</span></p>
<p><b>On the CFTC front,</b><span> up till Tuesday last week, non-commercial accounts still built up implied USD shorts, while leveraged accounts moved the other way to increase its net implied USD longs marginally. Longer term plays, asset managers reduced their implied short USD bias for the second consecutive week, but they still sit on large implied short USD positions that have increased compared to pre-COVID levels. </span></p>
<h3><b>Today’s Options Expiries</b><span> for 10AM New York Cut (notable size in bold)</span></h3>
<ul>
<li><span>EURU</span><span>SD: </span><span>1.1050 (420M), 1.1065 (831M), 1.1090-1.1100 (650M), </span><b>1.1125 (2.2BLN)</b></li>
<li><span>USDJPY: </span><span> </span><span>106.85 (415M), 109.15 (700M)</span></li>
<li><span>GBPUSD: </span><span>1.2400 (420M).</span></li>
</ul>
<h3><span>Technical & Trade Views</span></h3>
<p><b>EURUSD (Intraday bias: Bullish above 1.0950)</b></p>
<p><span>EURUSD From a technical and trading perspective, as 1.0950 attracts buyers bulls will be looking for confirmation of last week’s key reversal pattern, with the weekly candle printing a bullish engulfing pattern. A move through 1.1150 will likely inject further upside momentum opening a move to test offers and stops towards 1.13. A breach of 1.0950 would likely see a border corrective phase to test bids back towards 1.0850. Below 1.08 would suggest a false upside break and set focus back to year to date lows</span></p>
<p><img class="aligncenter size-full wp-image-40803" src="http://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.19.16.png" alt="" width="2056" height="1216" srcset="https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.19.16.png 2056w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.19.16-300x177.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.19.16-1024x606.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.19.16-768x454.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.19.16-1536x908.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.19.16-2048x1211.png 2048w" sizes="(max-width: 2056px) 100vw, 2056px" /></p>
<p><b>GBPUSD (Intraday bias: Bullish above 1.1950)</b></p>
<p><span>GBPUSD From a technical and trading perspective, as with EURUSD GBPUSD also printed a key reversal pattern last week as 1.20 now acts as support we can expect to see a test of offers and stop above 1.25. A move back through 1.22 would suggest a broader corrective phase to unwind near term overbought momentum, before another leg higher</span></p>
<p><img class="aligncenter size-full wp-image-40804" src="http://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.22.54.png" alt="" width="2063" height="1218" srcset="https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.22.54.png 2063w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.22.54-300x177.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.22.54-1024x605.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.22.54-768x453.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.22.54-1536x907.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.22.54-2048x1209.png 2048w" sizes="(max-width: 2063px) 100vw, 2063px" /></p>
<p><b>USDJPY (intraday bias: Bearish below 109.50)</b></p>
<p><span>USDJPY From a technical and trading perspective, another bearish weekly key reversal pattern. As 107 acts as support we will likely see a correction back to tests sellers resolve above 109. Bears will look to make a stand above here to force another leg lower targeting an equality objective towards 105. A move back through 110.85 would concern the bearish thesis and expose stops above 111.85</span></p>
<p><img class="aligncenter size-full wp-image-40805" src="http://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.27.34.png" alt="" width="2066" height="1218" srcset="https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.27.34.png 2066w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.27.34-300x177.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.27.34-1024x604.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.27.34-768x453.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.27.34-1536x906.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.27.34-2048x1207.png 2048w" sizes="(max-width: 2066px) 100vw, 2066px" /></p>
<p><b>AUDUSD (Intraday bias: Bullish above .5850)</b></p>
<p><span>AUDUSD From a technical and trading perspective, as buyers defend .5850 look for another corrective leg higher in a three push higher pattern to test the .6135 equality objective from here we should see sellers remerge. Another defence of .5900 would set a platform for a move higher to test .6400. However, a failure at .5900 will open a deeper decline to test .5650</span></p>
<p><img class="aligncenter size-full wp-image-40806" src="http://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.30.54.png" alt="" width="2054" height="1224" srcset="https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.30.54.png 2054w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.30.54-300x179.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.30.54-1024x610.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.30.54-768x458.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.30.54-1536x915.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/03/Screenshot-2020-03-30-08.30.54-2048x1220.png 2048w" sizes="(max-width: 2054px) 100vw, 2054px" /></p>
<p> </p>
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