InvestMacro

By CentralBankNews.info
Canada’s central bank left its benchmark target for the overnight rate at a record low of 0.25 percent, as expected, but expanded its easing measures to include the purchase of corporate bonds to help meet the challenge of increased demand for near-term financing by governments, businesses and households, and set up conditions for an economic recovery.
The Bank of Canada (BOC), which has cut its key rate three times this year by a total of 1.50 percentage points, said the necessary efforts to contain the spread of the COVID-19 virus had caused a “sudden and deep” contraction in global economic activity and employment.
“The Bank’s Governing Council stands ready to adjust the scale or duration of its programs if necessary,” BOC said, adding its actions are aimed at bridging the current period of containment and create the conditions for a sustainable recovery and achievement of its inflation target.
This sudden halt in global economic activity will be followed by regional recoveries at different times, depending on the duration and severity of the outbreak in each region.
“This means that the global economic recovery, when it comes, could be protected and uneven,” BOC said.
At this point the economic outlook is too uncertain to provide a complete forecast, BOC said, adding various scenarios suggest economic activity was down 1-3 percent in the first quarter of this year and will be 15-30 percent lower than in the fourth quarter of 2019.
In addition to earlier rate cuts, BOC has already injected some 150 billion Canadian dollars in asset purchases and today said it would continue to purchase at least $5 billion in government of Canada securities per week in the secondary market and will increase the level of purchases as required to ensure the market continues to function properly.
BOC said it was also temporarily raising the amount of Treasury bills it would buy at auctions to up to 40 percent, was developing a new Provincial Bond Purchase program of up to $50 billion as a supplement to its Provincial Money Market Purchase Program.
A new Corporate Bond Purchase Program was also being announced, in which BOC will buy up to $10 billion in investment grade corporate bonds in the secondary market while the bank’s term repo facility would be enhanced to permit funding for up to 24 months.

The Bank of Canada released the following statement:

“The relative value of cash will necessarily zoom higher when stocks plunge.”

By Elliott Wave International

A negative sentiment toward cash had been in place for quite some time.

Let’s go back a little more than a year when our Feb. 2019 Elliott Wave Theorist showed this chart and said:

The average cash holding in mutual funds just fell to an all-time low. All long term sentiment indicators look like [this], except for the ones that look even worse.

These headlines published later in 2019:

• Why you shouldn’t go to cash now — in one chart (Aug. 6, CNBC)
• 3 reasons to stay in a volatile market and not cash out (Aug. 8, Yahoo Finance)

These dismissive views toward cash are what to expect after a historically long uptrend in stocks. Many investors expected equity prices to keep climbing, so why hold cash?

Indeed, as recently as January, one highly prominent professional investor reverted back to the old saying, “Cash is trash.”

However, in the same month, our Elliott Wave Financial Forecast said:

Cash is the only answer to survival in the coming environment.

The just-published April Elliott Wave Financial Forecast followed up with this chart and said:

Equities are the opposite of cash; risk-assets that require the surrender of cash. The relative value of cash will necessarily zoom higher when stocks plunge. The chart inverts the Dow’s recent plunge to show the liftoff for a new bull market in cash. … As [the book] Conquer the Crash stated: “When the stock market reaches bottom, you can buy incredibly cheap shares that almost no one else can afford because they lost it all when their stocks collapsed.”

Speaking of a stock market bottom, are we almost there?

Well, as recently as March 28 (Marketwatch), a major financial website sported this sub-headline:

Coronavirus crash is a buying opportunity for focused, long-term investors

As the April Elliott Wave Financial Forecast relatedly noted:

The evidence of an entrenched and even surging public infatuation with shares is not simply anecdotal. A Bankrate survey of about 2500 U.S. consumers from March 20 through March 24 found that just 11% have taken investments out of the marker in first quarter of 2020, while 13% “added more investments over the last three months.” Another 66% of respondents said “they intentionally left their holdings as is.” Ten percent said “they were unaware of the current economic volatility.” So, buyers or holders of equities accounted for almost 90% of investors through the worst first quarter in the 124-year history of the Dow Jones Industrial Average. Remarkably, 47% said they cut spending over “concerns of the economy.” Just 15% said they did so because of “concerns over the stock market.”

However, Elliott wave analysis of the stock market’s price pattern suggests that many investors will soon wish they had embraced cash instead of stocks.

Now is the time to learn all you can about the Elliott wave model so you can apply this knowledge to the current stock market picture and gain insights into what to expect next.

A great educational resource is the online version of the book, Elliott Wave Principle: Key to Market Behavior by Frost & Prechter, which you can access free when you join Club EWI. Membership in Club EWI is also 100% free.

Get started.

By IFCMarkets

US dollar net short bets increase slowed to $10.50 billion from $9.89 billion against the major currencies during the one week period, according to the report of the Commodity Futures Trading Commission (CFTC) covering data up to April 7 and released on Monday April 13. The change in overall dollar position was due to increase in bullish bets on British Pound and Swiss franc, while bearish bets on Canadian and Australian dollars were cut as they maintained net short positions against the dollar. Bearish dollar bets rose as the Federal Reserve announced about a $2.3 trillion expansion of its financing program with its commercial security funding facility beginning on April 14 to purchase commercial securities issued by corporations, banks and municipalities. At the same time the Labor Department’s dismal jobs report indicated more than expected 701,000 Americans lost their jobs in March.

Market Analysis provided by IFCMarkets

Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

By IFCMarkets

Falling consumer confidence in Australia bearish for AUDUSD

Consumer confidence dropped in Australia in April: it dropped 17.7% after 3.8% decline in March, according to Westpack Banking Corporation Consumer Sentiment survey report. This is bearish for AUDUSD.

Summary of technical analysis

Market Analysis provided by IFCMarkets

By Lukman Otunuga, Research Analyst, ForexTime

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By Orbex

Price action in GBPUSD saw prices pushing slightly higher.

This comes following a rather weak upside breakout on Monday.

GBPUSD was trading flat in the past few sessions within the 1.2485 and 1.2277 levels.

However, with momentum picking up, the pound sterling is making some modest gains.

The upside target at 1.2858 is now likely to be tested for resistance.

Watch for a possible retracement back to 1.2485 for support to form.

By Orbex

By IFCMarkets

On Tuesday, US stock quotes rose in the absence of any significant macroeconomic news. The main positive fact was the reduction in the number of Covid-19 cases per day in New York to a minimum from March 24 – 1649 people compared with 1958 people on Monday. Apple’s stocks grew by 5% due to signs of sales recovery in China. The growth leaders were the securities of the American travel companies Royal Caribbean Cruises (+ 13.4%) and Carnival Corporation (+ 8.7%). The S&P 500 (+3,06%), Nasdaq (+3,9%) and Dow Jones Industrial Average (+2,39%) indexes rose yesterday. Since the beginning of April, the S&P 500 has risen 15%. Today, US stock futures have declined markedly. The IEA published a very negative forecast for global oil demand. Shares of European oil companies plummeted, pulling along the entire global stock market. Today data on retail sales and industrial production for March will be published in the US. The ICE exchange dollar index rose today. Demand for the US currency increased as a result of the poor IMF forecast of a 3% decline in world GDP this year. Investors consider US dollar more reliable in comparison with the currencies of other countries.

European stocks are getting cheaper after the IMF forecast of a 3% drop in the world GDP. At the same time, the decline in European countries GDP may turn out to be even more significant. For example, the IMF expects France’s GDP to fall by 8% this year. European and American companies reporting season covering the 1st quarter of 2020 has now begun. Due to weak reports, the shares of Jupiter Fund Management, a British investment manager, fell by 7%. For the same reason, quotes of Danish companies TomTom (-3.4%) and ASML Holding (-2.2%) decreased. Regarding the United States, market participants so far expect a reduction in the total profit of S&P 500 companies list by 12.3% in the 1st quarter of this year and another 23.6% in the 2nd quarter. No important macroeconomic data were released in the EU either yesterday or today. The euro depreciated amid the IMF forecast of a significant drop in GDP of European countries.

Cheap oil is likely to support the Japanese economy and Southeast Asia as a whole. Today, the Japanese Nikkei lost only 0.45% and the Chinese Shanghai Composite – 0.57%. China released good foreign trade data for March. The account surplus remained. Exports reduced by only 6.6%, which is much less than the forecast (-13.9%). The Central Bank of China lowered bank reserve rates and regulations in order to support mainland Chinese companies affected by the coronavirus pandemic. Accordingly, today’s drop in the Hong Kong’s Hang Seng index was more noticeable than the Shanghai Composite and amounted to 1.2%.

Brent futures are being traded above the psychological level of $ 30 per barrel. International Energy Agency published an apocalyptic forecast for oil. It expects a reduction in world oil demand in April 2020 by 29 million barrels per day (bpd), in May – by 26 million bpd and in June – by 15 million bpd compared to the same months of 2019. At the same time, the agency expects that countries not included in OPEC + will reduce oil production by only 3.5 million bpd. In this case, the cumulative decline in production of all countries will not be 20 million bpd (as announced at the OPEC + meeting), but only 13.5 million bpd. Official data on oil reserves in the US, important for the market, will be published today. According to forecasts, reserves will grow by 10-13 million barrels, which could be an additional negative factor for oil prices.

Market Analysis provided by IFCMarkets

Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

By Orbex

The euro is posting only some modest gains on Tuesday as price rose over 0.50% intraday.

Following the breakout off the previous pivot highs near 1.0947, the euro stretched the gains to highs of 1.0971 before pulling back slightly.

However, as long as the previous level of 1.0950 holds, we expect the upside bias to hold.

The current momentum remains somewhat weak, which puts the upside gains towards 1.1030 into question.

By Orbex

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

After finishing another ascending structure at 1.0090, EURUSD has almost completed one more ascending wave. Possibly, today the pair may form the first descending towards 1.0940 and then resume growing to reach 1.0966, thus forming a new consolidation range between these two levels. Later, the market may break the range to the downside and then start another decline with the first target at 1.0900.

GBPUSD, “Great Britain Pound vs US Dollar”

After completing the ascending structure at 1.2635, GBPUSD is moving downwards to reach 1.2520. After that, the instrument may resume growing towards 1.2580, thus forming a new consolidation range between these two levels. If later the price breaks this range to the downside, the market may resume trading downwards with the first target at 1.2400.

USDRUB, “US Dollar vs Russian Ruble”

After forming the consolidation range below 74.34, USDRUB is moving not far from its downside border. According to the main scenario, the price is expected to break 72.60 and then continue falling towards 71.20. Later, the market may start another consolidation range and then resume trading downwards with the target at 68.50.

USDJPY, “US Dollar vs Japanese Yen”

After breaking 107.33 to the downside, USDJPY has finished the first part of another descending wave at 106.92. Today, the pair may correct to return to 107.33 and test it from below. Later, the market may start another decline with the target at 106.10.

USDCHF, “US Dollar vs Swiss Franc”

After completing another descending wave towards 0.9595, USDCHF is moving upwards. Possibly, the pair may reach 0.9630 and then start another decline towards 0.9600, thus forming a new consolidation range between these levels. Later, the market may break the range to the upside and resume growing with the first target at 0.9660.

AUDUSD, “Australian Dollar vs US Dollar”

After extending the ascending wave up to 0.6440, AUDUSD is moving downwards to reach 0.6380. After that, the instrument may start another growth towards 0.6408, thus forming a new consolidation range between these levels. Later, the market may break the range to the downside and then resume trading downwards with the first target at 0.6200.

BRENT

After finishing another descending structure at 29.08, Brent is consolidating below this level. Possibly, the pair may form one more ascending structure towards 29.60 and then resume falling to reach 27.90. Later, the market may start another growth with the target at 31.60.

XAUUSD, “Gold vs US Dollar”

Gold is falling towards 1708.00. Possibly, the pair may reach it and then start another growth towards 1728.00, thus forming a new consolidation range between these two levels. If later the price breaks this range to the downside, the market may correct to reach 1672.00; if to the upside – resume trading inside the uptrend to complete the ascending wave at 1770.0. After that, the instrument may start a new decline with the first target at 1615.00.

BTCUSD, “Bitcoin vs US Dollar”

BTCUSD is consolidating in the center of the range around 6830.00. Possibly, today the pair may break the range to the upside to reach 7100.00 and then resume falling towards 6850.00. After that, the instrument may form one more ascending structure with the target at 7200.00.

S&P 500

S&P 500 is moving upwards to reach 2871.5. Today, the instrument may reach 2856.5 and then form a new descending structure towards 2793.5. Later, the market may start another growth to return to 2871.5 and then resume trading downwards with the first target at 2660.5.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Article By RoboForex.com

GBPUSD, “Great Britain Pound vs US Dollar”

As we can see in the H4 chart, after completing a short-term correction and breaking the local high, GBPUSD has reached 38.2% fibo. The next upside targets may be 50.0% and 61.8% fibo at 1.2892 and 1.3242 respectively, but the current growth is so slow that it may suggest a possible pullback. Another signal to confirm the pullback is a divergence on MACD. If the price breaks the low at 1.1409, the instrument may continue falling towards the post-correctional extension area between 138.2% and 161.8% fibo at 1.1365 and 1.0996 respectively.

The H1 chart shows a more detailed structure of the rising tendency. The pair is approaching 76.0% fibo at 1.2769. At the same time, there is a divergence on MACD, which may indicate a possible reversal towards 38.2% fibo (1.2092).

EURJPY, “Euro vs. Japanese Yen”

As we can see in the H4 chart, nothing has really changed over the previous week. The pair has failed to reach 76.0% fibo at 121.25; right now, it is failing to break the local low at 116.13 and then the key one at 115.85. If it happens, the instrument may continue trading towards the post-correctional extension area between 138.2% and 161.8% fibo at 113.20 and 111.55 respectively.

In the H1 chart, the correctional uptrend has reached 38.2% fibo and judging by the structure of the first descending wave the uptrend is very unlikely to reach 50.0% fibo at 119.50 anytime soon. The downside target and the support are the low at 116.35.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.