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Daily Market Report
11 Mar 2020

GBPUSD

The pound weakened during Tuesday’s American session and lost ground versus the US dollar and the euro. A stronger US dollar against G10 currencies played a role in the GBP/USD slide back to 1.2900. Brexit talks are taking place “exactly as planned” according to the UK government despite the recent turmoil in financial markets and the coronavirus outbreak. More discussions are scheduled for later in March; by that time the Bank of England might have lowered its key interest rates. On Wednesday, Chancellor of the Exchequer Rishi Sunak will present his first budget that would include considerations about coronavirus. It is possible that the Bank of England announces monetary stimulus at the same moment as the budget, in coordination. Data from the US likely to be irrelevant for market participants that will focus on headlines regarding US stimulus package and coronavirus.

From a technical perspective, the GBP/USD pair made a strong reversal that shifted the short-term bias to bearish. From Monday’s high, cable dropped 300 pips, falling back below the 20-day SMA (1.2930). On the downside, a slide below the resistance band between 1.2860 and 1.2880 would weaken the outlook further for the pound, exposing 1.2760/70. A recovery above 1.3020 should strengthen the pair while a close above 1.3120/30 would sign more gains ahead, probably targeting 1.3350/70.

Support levels: 1.2860 1.2800 1.2760

Resistance levels: 1.3020 1.3090 1.3150


DOW JONES

Dow Jones at least erased its Monday crash after sliding down from its all-time high levels as the coronavirus outbreak keeps pressuring the markets. The news emerged in the US that a payroll tax relief and other measures to help businesses to deal with the coronavirus outbreak was enough to lift spirits on Wall Street while Trump said he would announce more details and discuss “a possible payroll tax cut or relief, substantial relief, very substantial relief, that’s big, that’s a big number,” due to an Associated Press report. On Wednesday the markets also will focus on the CPI data set in the US. Its highlighted by Powell multiple times as the main indicator for FED’s monetary policy decision apart from the countermeasures will be taken to protect the US economy against the coronavirus outbreak.

The first target downside is now lined at 25.000 level and below that, 24.680 level (June 2019 and 28 February Low) and 24.000 levels can be followed. Above the 26.000 level, the resistances might be followed at 26.500 and 27.000 levels.

Support Levels: 25.000 24.680 24.000

Resistance Levels: 26.000 26.500 27.000  


UUSUSU

The USD/JPY surged late on Tuesday, once Wall Street held decisively to gains. The improvement in risk sentiment and higher US yields boosted the pair. Investors await more details regarding the fiscal stimulus package in the US. The rally in Wall Street should boost Asian shares at the opening, but the recovery will likely be challenged on Wednesday. Volatility in yen’s crosses is set to remain elevated for the near future. The USD/JPY held to gains even when Wall Street traded in red showing a stronger US dollar. The DXY had the best day in months.

Volatility keeps practically all price targets reachable in the short-term. On Tuesday 100.00 was a possibility and on early Wednesday, if it holds above 105.50, 107.70/108.00 would be an achievable level. The USD/JPY continues to make wild swings, making technical indicators less reliable. The main trend still points to the downside, but a slide under 104.40 is needed to clear the way to more losses. Key support levels below are located around 103.00 and at the 101.00 area. A consolidation around or above 105.50 should add support for another bullish run.  

Support levels: 104.50 103.70 102.80

Resistance levels:  105.80 106.80 107.70

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AAAUDU

In another volatile day, US stocks and crude oil recover some lost ground, but AUD/USD dropped, breaking relevant technical levels. The improvement in risk sentiment failed to boost AUD/USD. The pair weakened as the US dollar recovered from Monday’s slide. US yields rose amid expectations of a fiscal stimulus. US President Trump and advisers meet with Republican senators on Tuesday to discuss a payroll tax holiday. More details are expected to be announced soon. On Wednesday data to be released in Australia includes Westpac Consumer Confidence and mortgage loans.

Volatility continues to be the norm for AUD/USD. On Monday, it travelled 400 pips from low to the top and on Tuesday, 150 pips. Since Tuesday’s Asian session, it has been moving with a bearish bias, and it accelerated during the American session. The AUD/USD failed to hold above 0.6650 and turned to the downside. After breaking 0.6570, the outlook worsened. It bottomed at 0.6460 and then bounced toward 0.6500. Technical indicators in the four hours chart are moving away from oversold levels, suggesting some consolidation ahead. The chart will favour further losses if it drops under 0.6460. The next support lies at 0.6430 and then comes 0.6400. A recovery above 0.6540 would ease the bearish pressure. On a wider perspective, the Aussie needs to break and hold above 0.6660 to open doors to more sustainable gains.

Support levels: 0.6440 0.6400 0.6320

Resistance levels: 0.6540 0.6590 0.6625

XAAAGG

Silver is keeping its double whammy trading and struggling to find a clear way on the market. While the white metal declines with Gold in risk appetite trading, also its industrial metal label dragging it down during the risk aversion trading periods. As the coronavirus outbreak is now a clear threat to the global economy, while Gold is favoured as safe-haven, Silver will most likely to stay under pressure with the decline in industrial production worldwide and demand.

Silver failed to stay over 17.00$ and retraced back to the upper-16.00$ trading zone. If Silver tests below the important 17.00$ level, the supports can be followed at 16.33$ (%61.8 14.29$-19.65$) and 15.55$ (%76.40 14.29$-19.65$) can be targeted. On the top side, the resistances are lined at 17.60$ (%38.20 14.29$-19.65$), 18.38$ (%23.6 14.29$-19.65$) and over that 18.70$.

Support Levels: 17.00$ 16.33$ 15.55$

Resistance Levels: 17.60$ 18.38$ 18.70$

EURUUS

The US dollar staged a recovery that gained speed during the American session on Tuesday, sending EUR/USD back under 1.1300. US President Trump and advisors meet with Republican senators to discuss an economic stimulus package. Speculations about other stimulus measures dominated the news flow during US trading. Wall Street recovered some of its losses on another wild day. Data from the Eurozone showed the GDP grew by 0.1% during the fourth quarter, in line with previous estimates. A recession in the EZ seems likely particularly if the impact of the coronavirus persists. On Thursday, the European Central Bank is expected to announce easing measures.  US inflation data is due on Wednesday but it could be irrelevant for market participants. The annual CPI rate is seen at 2.2% in February down from 2.5%.

The EUR/USD lost relevant technical levels, like 1.1330 and extended the correction. It bottomed at 1.1275. In the four hours chart, price is back below the 20-SMA and Momentum dropped below 100; also the RSI is moving south, far from oversold readings suggesting there is more room for the pair to slide. The next target might be located around 1.1250;  below, the 1.1180 area emerges as a strong support that should be respected. A recovery back above 1.1335/40 would put the euro back into business and ready for a test of 1.1400. Overall, the 1.1500 zone remains a crucial resistance, unlikely to be broken on the next sessions, particularly if volatility continues to diminish.

Support levels: 1.1280 1.1220 1.1100

Resistance levels:  1.1340 1.1390 1.1440

GOOGOG

Markets tried to find balance on Tuesday trading while Gold eased from its 2020 highs and equity markets faced some buying reaction from the dips. As the coronavirus outbreak now escalates outside China, markets are following the countermeasures taken by the government closely. While the government in Italy expands the quarantine rules to the whole country, the US President Trump told Republican Senators that two options for coronavirus economic relief plan would be to waive payroll tax through year-end or make the tax cut permanent -source at meeting held on Tuesday.

If Gold manages to stay over 1.650$, the resistances might be followed at 1.700$, 1.750$(December 2012 peak) and 1.785$ (2012 multi-time peak). Below the 1.650$, the supports might be followed at 1.615$, 1.600$ and 1.557$.

Support Levels: 1.650$ 1.615$ 1.600$

Resistance Levels: 1.700$ 1.750$ 1.785$


OOOIII

WTI had a correction on Tuesday trading after the heavy plunge seen on Monday trading. As the conflict between Russia and Saudi Arabia regarding the production cuts triggered the sell-off, markets are trying to digest the issue and re-position their trades. Russia's Energy Minister Alexander Novak said that the door for an OPEC+ cooperation was not closed but added that the Russian oil market was still competitive despite falling oil prices. On the other hand, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman stated that there was no point to hold another OPEC+ meeting in May or June and added “In a free market, every oil producer needs to demonstrate its competitiveness, preserve and increase its market share,"

Above the 35.00$ level, WTI might test 36.12$ and 37.00$ levels. Another selling attempt below the 34.45$ (9th of March decline %50.00) can face supports at 32.79$ (9th of March decline %38.20) and 31.00$ levels.

Support Levels: 34.45$ 32.79$ 31.00$

Resistance Levels: 35.00$ 36.12$ 37.00$


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* All the Moving Average support and resistance levels are dynamic by nature. Means when the price approaches the Moving averages, slight variation occurs in the forecasted Moving Average support and resistance levels. Previous few days’ intraday levels are also signicant while trading the current day as the price tend to hover around these levels for some time. Levels in red indicate strong, critical or vital.

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Please remember that trading financial markets carry a high degree of risk to your capital. It is possible to lose more than your initial stake. Leveraged products may not be suitable for all investors, therefore please ensure you fully understand the risks involved and seek independent advice if necessary.

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