The USD/CAD broke back below 1.4000 for the first time in six sessions on Tuesday as the continuing dissolution of the US labor market failed to excite further risk-aversion fears and the Federal Reserve unveiled a $600 billion lending program for medium sized business part of a $2.3 trillion package to support local and state governments and companies with loans and securities purchases.OPEC and Russia agreed on a tentative production deal which would cut about 10 million barrels a day in May and June. Saudi Arabia and Russia, the largest producers, would reduce their output by 8.5 million a day and all members would cut their supply by 23%, according to news reports.The deal is conditional on Mexico’s approval. Energy Secretary Rocio Nahle Garcia said on Twitter after the Thursday meeting that her country is willing to reduce output by 100,000 barrels far less than the 400,000 assumed in the agreement.This attempt to support oil prices with supply restrictions is far larger than previous efforts by the cartel and is backed by US President Trump. North American shale companies are under severe financial pressure from the more than 50% collapse in crude prices this year. Production costs in the shale fields are generally higher than the more traditional extraction in the Middle East and Siberia.Signs that the pandemic is easing in the US and Europe improved risk sentiment throughout the week. The USD/CAD fell 1.8% and is back to the level of mid-March before the most aggressive Coronavirus inspired fears drove the pair to 1.4668 on March 19, the highest price in four years and the second highest since 2003. The euro gained 1.3% versus the dollar on the week and the USD/JPY was static opening at 108.53 and closing just 10 points lower, though it was down from Monday’s 109.38 high.USD/CAD outlookEconomic damage around the world from the public health measures instituted to cope with the Coronavirus has taken concrete shape with the astonishing US and Canadian jobs losses.In the US almost 17 million people, 10% of the workforce, have filed for unemployment insurance in the last three weeks. In Canada one million workers lost their positions in March and the unemployment rate jumped to 7.8% from 5.6%, its highest since February 2011.Market risk is a matter of perception. In the ascending phase of the crisis in early March the extent of the pandemic and its economic effects were largely unknown but subject to the worst interpretations. The US dollar and US assets were, as they have always been, the refuge of choice. The actual job losses in the US and Canada were far higher than expected but they are now known instead of conjecture and if the knowledge is not reassuring is quantifiable.Five factors began to tilt the risk balance away from the US dollar and toward the loonie this week. First, the pandemic has started to moderate in several countries in a fashion that may predict its end. Second, infection, hospitalization and fatality rates in the US are proving to have been widely exaggerated when compared to real numbers and the models have been adjusted lower by large multiples. Third, government support programs from Washington and Ottawa and the Federal Reserve and the Bank of Canada have restored market confidence in the functioning of the financial system and, more hopefully, that some of the economic pain from closures can be mitigated. Fourth, talk in DC is slowly shifting to how and when to reopen the economy. Fifth, the OPEC production deal, if approved, should put a floor under crude prices until the reviving global economy increases demand.None of these developments are assured but if they continue the US dollar’s risk premium, in general and against the Canadian in particular, will slowly drain away and the stage will be set for Dollar Canada to return to pre-crisis levels.The USD/CAD is supported at 1.3950, 1.3800 and 1.3660 but the rapid nature of the price movement in the last month and the fundamental motivation means that these levels will not endure much pressure. The same stipulations apply to the resistance lines at 1.4075, 1.4180, 1.4300 and 1.4380.
Pound/dollar was somewhat shocked – like the British public and the rest of the world – by Prime Minister Boris Johnson's admission to intensive care amid complications of COVID-19. Cases and deaths of the disease continue mounting in the UK, US, and elsewhere, and lockdowns are likely to continue weighing on the economies.This week in GBP/USD: Leadership vacuum amid the peak of the crisisBeing in intensive care is never good news – the report that PM Johnson's condition deteriorated weighed on the pound, and so did the initial release of his hospitalization. Calming words from Downing Street – such as that he does not need ventilation – failed to unnerve traders. Johnson has been elected in a landslide majority only in December and had considerable political clout, and his absence in a national crisis is worrying. Foreign Secretary Dominic Raab is deputizing for him and running the day to day operations, but it is unclear how far he can go with big decisions. Raab, a former lawyer, and a hard-Brexiteer previously competed for the job and is experienced in government. However, the UK's management of the crisis has already come under criticism, first for letting the virus run and later for the lack of tests. Having a less-experienced and less popular interim leader in place is yet another factor weighing on confidence. The death toll from coronavirus continues rising and souring the mood, especially as the University of Washington forecast that the UK may suffer 66,000 mortalities. In the US, the curve also refuses to flatten significantly, with the states of New York and New Jersey suffering rapid spreads. Other parts of the country are not as hard hit for now, and President Donald Trump is considering opening up some parts of the economy. Trump is also warming up to add stimulus to the economy, mulled by House Speaker Nancy Pelosi. Another $1 trillion in expenditure to mitigate the economic effects of coronavirus is under consideration. The reports pushed stocks higher at some point and weighed on the dollar. US jobless claims disappointed once again with over 6 million – yet markets jumped as the Federal Reserve announced a new scheme at the exact same time. The Fed laid out several new schemes that total $2.3 in loans. The new bazooka from Chairman Jerome Powell and his colleagues sent stocks up and the dollar down. UK events: Johnson's health, lockdown extension, economic measuresAt the time of writing, the PM's condition remains stable, but he has not left intensive care. Any update on Johnson may move markets and overwhelm other events. The longer he stays in the hospital, the more significant the pressure on the pound. The UK is set to extend its lockdown for several weeks – at least until a peak in cases can be seen in the rearview mirror. Foreign Secretary Dominic Raab will likely have to take that decision, based on medical experts' advice and alongside his peers in the cabinet. Former health minister Jeremy Hunt suggested that significant restrictions may be extended for at least a month.The shuttering is taking a substantial toll on the economy, and the public is playing along. However, criticism may increase if testing for COVID-19 cases remains limited. Raab may find himself in a tricky situation and without the necessary political capital to deal with an escalation of the crisis.See Coronavirus Exit Strategy: Three critical factors to watch and how they impact currenciesOne option that has been aired is a government of national unity. Keir Starmer, a moderate, has been elected leader and may join forces with the Conservatives amid the deterioration and as long as the PM remains away from Downing Street. Such a move, which is in its infancy, may boost the pound. Chancellor of the Exchequer Rishi Sunak – who would take over if Raab becomes sick – may introduce additional measures to help struggling businesses and workers, and the unemployed if lockdowns are extended. That would also be positive for the pound. The only noteworthy economic release is the British Retail Consortium's Retail Sales figure for March. It will likely reflect a leap as Brits stockpiled ahead of the lockdown.Here is the list of UK events from the FXStreet calendar:UK macro economic events April 13 17 2020US events: Potential restriction easing and consumer dataHas the US coronavirus crisis peaked or not? That question will likely be on the top of the agenda and may see a struggle between health officials and the White House. Trump would like to return to normal as soon as possible, to boost the economy and his reelection chances.However, Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases (NIH), said it is time to intensify efforts, not loosen them. In any case, the decision mostly rests with state governors. The longer the shutdowns last, the worse for the economy and stocks – and better for the safe-haven dollar.Governors will likely make decisions according to the health situation in their states so that the daily updates may have the most substantial impact on currencies. The epicenter has been New York, but with some signs of peaking, the focus may move to other places in America. Retail sales for March stand out, and they may show a discrepancy between the headline figure and core numbers. Overall, shopping may have risen – or at least not collapsed – as Americans were stocking up on supplies. However, excluding volatile items, expenditure has likely dropped amid massive layoffs. It is also essential to note that the figures have unlikely captured the full extent of the economic damage in March, and the whole picture will be available only with revisions due in the following report. The Federal Reserve's Beige Book – usually a "gray" document – will shed some light on what central bankers here from businesses and the picture will likely be gloomy. The publication precedes the next Fed decision.Weekly jobless claims remain a wildcard, with figures in the millions, but likely without a clear consensus. This publication, for the week ending on April 10, is the first one where the four-week rolling average will have already captured four consecutive reports in the millions. The smoothed-out indicator will likely provide a baseline for the employment situation.
GOLD TECHNICAL PRICE OUTLOOK: XAU/USD WEEKLY TRADE LEVELSGold priceupdated technical trade levels - Weekly ChartXAU/USD surges into weekly uptrend resistance – weekly close in focusNew to Gold Trading? Get started with this Free How to Trade Gold -Beginners GuideGold prices surged nearly 4% this week with the XAU/USD rally testing uptrend resistance ahead of the extended holiday break. While the broader outlook remains constructive, the immediate advance may be vulnerable IF price closes below this threshold. These are the updated targets and invalidation levels that matter on the gold weekly chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this XAU/USD trade setup and more.Notes: In my last Gold Weekly PriceOutlook we noted that the XAU/USD rally was, “testing the first major resistance hurdle here at the yearly high-close. From a trading standpoint, the advance remains vulnerable while below this threshold.” The level in focus was 1673 – price is trading above this level in early New York trade on Thursday with parallel resistance catching the intraday highs for now. We’re looking for a reaction up here.A close below slope resistance would leave the advance vulnerable heading into the extended holiday break. Initial support rests at the January highs at 1611 backed by 1586 and the April open at 1574- now medium-term bullish invalidation. A topside breach from here exposes subsequent resistance objectives at the yearly swing high at 1703 and the 78.6% retracement / pitchfork resistance at 1733/37 – look for a larger reaction there IF reached.Bottom line: The gold price rally is testing uptrend resistance and the focus is on the weekly close with respect to this slope. From a trading standpoint, a good spot to reduce long-exposure / raise protective stops. While the broader outlook remains constructive, be on the lookout for possible near-term exhaustion here IF price holds below this trendline – ultimately, a larger pullback may offer more favorable entries with a breach of the highs exposing longer-term technical resistance above 1730. Review my latest Gold Price Outlook for a closer look at the near-term XAU/USD technical trading levels.GOLD TRADER SENTIMENT – XAU/USD PRICE CHARTA summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +3.04 (75.26% of traders are long) – bearishreadingLong positions are11.29% higher than yesterday and 10.13% higher from last weekShort positions are0.65% higher than yesterday and 1.52% higher from last weekWe typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger Gold-bearish contrarian trading bias from a sentiment standpoint.
Overall, USD/JPY is trending upwards. Recently, USD/JPY has been ranging across.Currently, USD/JPY is testing the support level of 108.500 and the next resistance level is at 110.000.
Overall, NZD/USD is ranging across. Recently, NZD/USD moved higher, breaking the resistance level of 0.60300.New Zealand banks will be closed on Monday in observance of Easter Monday. Lower trading volume and volatility is expected during the New Zealand trading session.NZD/USD’s next support level is at 0.60300 and the next resistance level is at 0.62200.
Latest data from EPFR that traces the trading trend of funds suggests that in the week from March 26th to April 1st,net purchase of inverse ETF totaled an unprecedented US$6.04 billion, which shows that investors remain mostly bearish about the market, despite US stock market’s recent rally.Dow Jones Index daily pivot points: 22940---23240S1: 22668 R1: 23813S2: 21945 R2: 24235
Harga minyak merosot lagi pada akhir perdagangan Selasa (Rabu pagi WIB), di tengah membengkaknya pasokan minyak mentah dan melemahnya permintaan bahan bakar karena pandemi Virus Corona, sementara investor semakin hati-hati atas ekspektasi bahwa produsen terbesar dunia akan segera menyetujui pengurangan produksi.Harga minyak mentah berjangka West Texas Intermediate (WTI) untuk pengiriman Mei, jatuh 2,45 dolar AS atau 9,4 persen menjadi menetap di 23,63 dolar AS per barel, mempercepat kerugiannya di sore hari menjelang laporan persediaan minyak mentah mingguan AS.
Reserve Bank of New Zealand recently increased the size and scope of the QE program and implied that further expansion will take place if necessary.NZD/USD daily pivot points: 0.5969S1: 0.5923 R1: 0.6015S2: 0.5898 R2: 0.6060
AUD/USD closed up 1.5% on Monday, being the daily best performer of major currencies.AUD/USD daily pivot points: 0.6050--0.6070 S1: 0.6013 R1: 0.6129S2: 0.5945 R2: 0.6175
According to the latest statistics, euro speculative net longs increased by 12,957 to 74,247 contracts, among which speculative longs increased by 2,687 to 155,047 and speculative shorts decreased by 10,270 to 80,800 contracts.
While we expect AUD/USD to return to the higher range of 0.65, the question is when that will happen. AUD/USD daily pivot points: 0.6083---0.6111S1 0.6008 R1 0.6154 S2 0.5950 R2 0.6242
USD/CAD ran into resistance a couple of weeks back via the 2016 highs, initially the pullback was looking like it might be shallow but then a minor wave of selling hit. The selling may be over now, with the Friday low at 13920 acting as the line-in-the-sand to watch.
The British Pound has declined by 7.67% in value against the Canadian Dollar since March 9. The currency pair tested the lower boundary of an ascending channel pattern at 1.6534 during last week's trading sessions.
GBP/NZD may face selling pressure ahead if the pair fails to re-mount the January uptrend which has served as a key inflection point at several intervals. Over the past few weeks, traders have expressed an interest in climbing higher as demonstrated by the far-reaching wicks but ultimately failed. The lack of confidence could lead to capitulation and catalyze a selloff until GBP/NZD hits the familiar 1.9878-2.0000 support range.
Euro recovery may be losing steam near 1.11 vs US DollarBreak of trend line support needed to confirm bearish turnTrader sentiment studies continue to argue for the upside
It’s been a month of extremes in global markets as a shocking and historically aggressive equity sell-off finally found some semblance of support this week.The US Dollar put in a strong rally as risk aversion was heating up in the middle of March, gaining as much as 8.8% over a ten-day-period.With the S&P 500 digging into support and the US Dollar tempering gains, both reactions to recentFOMC actions – the big question now is whether the worst is over or whether there’s more selling yet to come.
Bank of England announced on Thursday to hold interest rate at the record low of 0.1%. Policymakers noted that the central bank will closely observe the situation and take any further measures when necessary to prevent financial shrinkage.Chartered Bank noted that once public health emergency situation is improved, the British government’s response on the large scale should be able to quickly revive the economy, and in combined with strict containment measure similar to that taken by China and Italy, it’s expected that the pound will continuously rally.Pound has been among the G10 currencies with the least satisfactory performance year to date, falling 11% against US dollar so far. According to Chartered Bank’s assessment of fair price, the pound has dropped to a record low against dollar.GBP/USD daily pivot points 1.2001---1.2133S1: 1.1907 R1: 1.2359S2: 1.1615 R2: 1.2519
Canvasing opinions here. I've seen Mean Reversion strategies work for some time, and then more recently Trend Following has worked well since the spiking Volatility. What works during the period when volatility starts to fall?
AUD/USD Current Price: 0.6065Wall Street edged sharply higher, keeping commodity-linked currencies up.Gold surged to a fresh weekly high of $1,643, retreated ahead of the close.AUD/USD at its highest in over a week near 0.6100.
S&P 500 Index, Dow Jones and Nasdaq surge on Wednesday as the US stock market benchmarks rebound for the second consecutive trading session.FOMC asset purchases and the Fed liquidity backstop, combined with hopes for a $2 trillion coronavirus stimulus package, likely fuels the recovery in stocks.The VIX and other cross-asset volatility benchmarks are starting to slide after spiking to levels not seen since the global financial crisis.
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