Easter Monday holiday celebrations keep trading activity muted while COVID-19 updates keep caution fresh in the market.
Summary: Global equities opened for the week on a relatively dovish note as COVID-19 pandemic woes continue to weigh down investor sentiment across the globe. While the weekend saw OPEC cartel and non-member nations agree to a historic supply cut deal that took out nearly a quarter of global oil supply, the update failed to create a sharp impact on price momentum and directional bias.
While most of the major indices and risk assets in the Asian market traded and closed in red, few exchanges in the Asian market and all major exchanges across the European market remained closed on account of Easter Monday celebrations. In the forex market, major forex pairs traded nearly flat within familiar price range, albeit retaining price bias from Friday on the holiday-thin trading session.
Precious Metals: Rare metals have come across the northern winds ever since the Fed announced a 2.3 trillion USD support bill. As T.Yields declined, rare metals peaked on safe-haven demand despite USD’s strength, and precious metals are continuing to ride this momentum with gold breaching past $1710 handle.
Crude Oil: Crude oil price action failed to see any significant changes in international futures of both WTI and Brent even though global supply cuts support the deal agreed upon during the weekend. While the cutback took out nearly a quarter of global supply, demand outlook still remains unfavorable owing to a COVID-19 pandemic disruption of the global economy, resulting in oil prices trading between $20-$29 price range.
DXY: US Dollar index, which measures the price of US Greenback against six major global currencies, remains flat today, mostly stuck around the mid-99 handle. USD is yet to reel from Fed’s support bill announcement and given holiday thin market environment today USD couldn’t make major headways.
On The Lookout: As the world remains immersed in Easter celebrations, there is a lack of updates to help assets gain directional bias in the global market. What little directional strength and bias remain in the market is fully influenced by COVID-19 pandemic related updates, which has enough strength to offset the impact from historic global crude oil supply cut back deal into nothingness. The only positive factor in this scenario is that the US, Italy, and France – the major COVID-19 hotbeds are seeing a slowdown in new victim counts, hinting at pandemic reaching its peak soon.
US President Trump has stated that restarting the US economy is the highest priority but the outcome for such decision will depend upon how much the outbreak is controlled and how fast the pandemic peaks which doesn’t seem like any time in the near future. Confirmed cases in the US, however, have escalated to all-time highs of 555,000, which are more victims than any other country, including ground zero – China.
Trading Perspective: US futures trading in the international market was soft amid holiday thin volumes and caution stemming from the COVID-19 impact. There are no major macro data updates scheduled today either, which suggests Wall Street is set to see muted activity with dovish directional cues amid Easter Monday celebrations.
EUR/USD: The pair holds steady above 1.09 handle, and while it managed to scale past the mid-1.09 handle it failed to hold above critical levels as EURO bulls lacked strength. However, broad-based USD’s weakness helped prevent sharp declines keeping the price well supported above the psychological support level of 1.0890. The pair is set to oscillate within a familiar price range during NA market hours.
GBP/USD: The pair is trading steadily above 1.25 handle, taking full advantage of USD’s weakness and holiday thin market activity. News of UK PM Johnson’s improving health condition also aided GBP bulls. The pair is set to maintain positive price action with strong support found around 1.2480-1.2500 range.
USD/CAD: The pair is trading within a familiar price range, albeit expressing clear dovish bias as CAD felt the impact of a crude oil supply cut back deal despite oil price in the global market failing to make any visible impact. Broad-based USD weakness also keeps CAD supported in the immediate future, which suggests the pair is likely to remain trapped below 1.40 handle regardless of slight oscillations every now and then.
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