That being said, the FTSE is far from a position of power despite early signs that European and American cities have begun to ease restrictions. Therefore, one of the few bright spots for the index may exist in the series of higher highs and higher lows starting in late March and holding above the recent low around 5,670 will be crucial in keeping the formation alive. While the upcoming event risk may provide the spark to make or break the level, evidence for a broader continuation higher might exist even if the immediate reaction to the news is negative – as long as it holds above the recent low. Should it fail however, the FTSE 100 may slip to an area of subsequent support around 5,500. This would muddy the series of successive higher highs and lows and would deal a technical blow in the short-term. If, on the other hand, the event risk passes and market participants are happy with the bank’s intentions, establishing another high above resistance around 6,225 will be important for staging the next leg higher. A gap exists immediately above the area, which may allow for bulls to capture the zone and enjoy a quick rush higher. Either way, price action may remain subdued until Thursday’s rate decision has passed. Join my colleague Justin McQueen for a live webinar of the event in which the resultant price action and implications will be discussed.

Technical Outlook: In my last S&P 500 Price Outlook we noted that the SPX rally had, “extended into a pivotal resistance barrier and the immediate focus is on a reaction up here with the bulls at risk sub-2930 near-term.” A false breakout on April 29th quickly reversed with the index pulling back into the 23.6% retracement of the mid-March rally at 2786 before rebounding. The recovery is now once again approaching critical resistance at 2890-2932 – a region defined by May open, 100% extension of the advance off the yearly low and the 61.8% retracement of the 2020 range. A breach / close above this threshold is still needed to unleash the next leg higher in SPX towards the August 2019 highs at 3026. A break below Fibonacci support would risk a larger price correction with subsequent objectives at 2670.

WEDNESDAY’S ASIA PACIFIC TRADING SESSION S&P 500 futures are only pointing cautiously higher heading into Wednesday’s Asia Pacific trading session. In fact, stocks on Wall Street trimmed a lot of their gains into the close as the Dow Jones and S&P 500 ended the day +0.56% and +0.90%. Comments from Fed Vice Chair Richard Clarida seemed to inspire risk aversion as he mentioned that the unemployment rate “is going to get very elevated”. He also added that it is “going to take time” for the labor market to recover. Meanwhile Texas - one of the early states to relax lockdown measures - saw Covid-19 hospitalizations rise 1,888 in the biggest rise in 3 weeks. These developments may have cooled what was a more robust “risk-on” tone in markets, perhaps raising concerns over the speed of an economic recovery. With that in mind, Asia Pacific equities may see a mixed session Wednesday. An absence of major economic event risk arguably places the focus for foreign exchange markets on sentiment. To that end, if fears of escalating US-China tensions continue rising, the sentiment-linked Australian Dollar could be left vulnerable.

Keep in mind, the near-term rally in USD/CAD emerged following the failed attempt to break/close belowthe Fibonacci overlap around 1.2950 (78.6% expansion) to 1.2980 (61.8% retracement), with the yearly opening range highlighting a similar dynamic as the exchange rate failed to test the 2019 low (1.2952) during the first full week of January. The shift in USD/CAD behavior may persist in 2020 as the exchange rate breaks out of the range bound price action from the fourth quarter of 2019 and clears the October high (1.3383). However, recent price action warns of range bound conditions as the break of the descending channel formation failed to produce a test of the April high (1.4298), with USD/CAD snapping the series of higher highs and lows from the previous week amid the lack of momentum to break/close above the Fibonacci overlap around 1.4130 (100% expansion) to 1.4140 (161.8% expansion). Failure to hold above the 1.4010 (38.2% retracement) to 1.4040 (23.6% retracement) region may spur a more meaningful run at the Fibonacci overlap around 1.3810 (50% retracement) to 1.3830 (100% expansion), which sits just below the April low (1.3850), with the next area of interest coming in around 1.3730 (78.6% expansion).

Rebounding from its record low of 74.50, the rupee traded higher by 48 paise at 73.80 against the US currency on Friday after the Reserve Bank's assurance that steps will be taken to maintain sufficient liquidity in the panick-stricken currency market.  At the interbank foreign exchange, the rupee opened lower at 74.39 and slid further to the day's low of 74.50 against the US dollar as investors panicked weighing turmoil in financial markets due to coronavirus fears. 

Coming into May, it’s likely that GBP/USD will eventually see greater volatility. If Britain and the EU fail to make some progress in the two rounds of week-long trade negotiations,scheduled on May 11th and June 1st respectively, it will have some noticeable impact on the pound’s fluctuation before mid-2020. After a month of jittering in March, April has been rather peaceful for the pound. GBP/USD once plunged to a 35-year low of 1.1413 in March, while GBP/EUR also fell to 1.0527, a record low in 11 years. But both pairs have experienced some rally afterwards. The EU-Britain negotiation regarding new trade measures introduced since January 1st has recently come to a deadlock. June 30th will be the deadline for extending the negotiation, yet the British Prime Minister Boris Johnson has repeatedly emphasized that an extension is unlikely to take place. Latest statistics from CFTC show that as of the week ending April 21st, speculators at Chicago’s International Monetary Market(IMM) are holding net shorts in pound for the first time in the past 12 months. During the last 6 weeks, speculators have been reducing holdings of GBP long positions. GBP/USD daily pivot points: 1.2434 — -1.2457 S1 1.2410 R1 1.2506 S2 1.2351 R2 1.2543

Yesterday, USD weakened against most major currencies except GBP and EUR. The U.S. Conference Board Consumer Confidence data (Actual: 86.9, Forecast: 88.3, Previous: 118.8 revised from 120.0) released yesterday was worse than forecasted. The U.S. Advance GDP q/q data (Forecast: -4.0%, Previous: 2.1%) will be released later at 2030 (SGT). The Federal Open Market Committee (FOMC) will be announcing their interest rate decision tomorrow at 0200 (SGT). It is expected that the FOMC will be holding interest rate unchanged at a target range of <0.25%. The FOMC may also reiterate and provide more specifics on the recent measures being carried out. There will also be a press conference after the decision at 0230 (SGT). During this time, volatility is expected of USD.

Overall, EUR/USD is trending downwards. Recently, EUR/USD moved higher, breaking the resistance level of 1.08000. Last Friday, European Commission’s Head of Task Force Michel Barnier said that a joint decision between the EU and UK would be taken on 30 June on whether the Brexit transition period will be extended. EUR/USD’s next support level is at 1.00800 and the next resistance level is at 1.10000. With the poor flash PMI data released last week, look for selling opportunities of EUR/USD.

Yesterday, USD weakened against most major currencies except EUR and CHF. The U.S. Unemployment Claims data (Actual: 4427K, Forecast: 4350K, Previous: 5237K revised from 5245K) released yesterday was worse than forecasted. Also, the U.S. Flash PMI data released yesterday indicated an unprecedented decline in business activity for the month of April. - Flash Manufacturing PMI (Actual: 36.9, Forecast: 35.1, Previous: 48.5 revised from 49.2) - Flash Services PMI (Actual: 27.0, Forecast: 30.5, Previous: 39.8 revised from 39.1) The U.S. Durable Goods Orders m/m data will be released later at 2030 (SGT). - Core Durable Goods Orders m/m (Forecast: -6.1%, Previous: -0.6%) - Durable Goods Orders m/m (Forecast: -12.0%, Previous: 1.2%) If the released data are worse than forecasted, USD may weaken.

Yesterday, USD weakened against most major currencies except EUR, NZD and CHF. The U.S. Unemployment Claims data (Forecast: 4350K, Previous: 5245K) will be released later at 2030 (SGT). The U.S. Flash PMI data will be released later at 2145 (SGT). - Flash Manufacturing PMI (Forecast: 35.1, Previous: 48.5 revised from 49.2) - Flash Services PMI (Forecast: 30.5, Previous: 39.8 revised from 39.1) It is forecasted that the manufacturing and services sectors contracted further in March due to the COVID-19 pandemic. If the released data are worse than or as forecasted, USD may weaken.

Overall, USD/JPY is trending downwards. Recently, USD/JPY has been ranging across within the support level of 107.300 and the key level of 108. USD/JPY’s next support level is at 107.300 and the next resistance level is at 109.000.

Last Friday, USD weakened against all major currencies after a risk-on mentality of market participants was sparked by President Trump’s announcement that some parts of the U.S. will be opening up, allowing some states and employers to drop most social distancing practices within four weeks. Also, positive partial data from experimental drug trials on severely ill Covid-19 patients at the University of Chicago hospital was reported by a health-oriented news website last Friday, creating an optimistic view on a possible vaccine.

CRUDE OIL AND GOLD TALKING POINTS: Crude oil prices sank as the prospect of huge supply meeting very limited demand glowered over the market Imminent May futures contract expiry didn’t help Gold prices inched higher through the session and remain well supported despite a break of their recent uptrend US crude oil prices plummeted in Monday’s Asia Pacific morning as the market continued to worry about a coronavirus-related collapse in demand even as supplies remain ample despite production cuts. The price of West Texas Intermediate for May delivery fell to $15.43/barrel, with the futures contract due to expire this week for that month. Prices are now at lows which haven’t been seen for more than twenty years.

GOLD PRICE TALKING POINTS Gold continues to pull back from the yearly high ($1748) even though the International Monetary Fund (IMF) forecasts global growth to contract 3.0% in 2020, and the price for bullion may face a larger correction as it carves a series of lower highs and lows. GOLD PRICE CARVES LOWER HIGHS AND LOWS AMID PLANS TO REOPEN US ECONOMY The price of gold fails to test the November 2012 high ($1754)as the Trump administration outlines a three-phased approach to reopen the US economy, and the bullish momentum may continue to abate over the coming days as the Relative Strength Index (RSI) reverses course ahead of overbought territory. Hopes of a V-shaped recovery appear to be dampening the appeal of gold as St. Louis Fed President James Bullard insists that “it is entirely possible and feasible we can get past the crisis mostly in the second quarter,” and a growing number of Federal Reserve officials may adopt an improved outlook as the central bank takes unprecedented steps to combat the economic shock from COVID-19. However, New York Fed President John Williams, a permanent voting-member on the Federal Open Market Committee (FOMC), warns of a protracted recovery as “it's going to take longer to get us back to where we want to be.” Mr. Williams went onto say that “I don't see the economy being back to full strength by the end of the year”during an interview with CNBC, and the weakening outlook for growth may force the FOMC to retain a dovish forward guidance at its next interest rate decision on April 29 as the IMF sees the US economy contracting 5.9% in 2020. It remains to be seen if the FOMC will continue to push monetary policy into uncharted territory as the committee “remainscommitted to using its full range of tools to support the flow of credit to households and businesses to counter the economic impact of the coronavirus pandemic,” but the unprecedented response may ultimately lead to unintended consequences as the Fed relies on its balance sheet to cushion the US economy. With that said, the low interest rate environment may continue to act as a backstop for goldas marketparticipants look for an alternative to fiat-currencies, and the broader outlook for bullion remains constructive as the reaction to the former-resistance zone around $1450 (38.2% retracement) to $1452 (100% expansion) helped to rule out the threat of a Head-and-Shoulders formation, with a similar scenario arising in March as the price of gold reversed course from the monthly low ($1451). However, the price of bullion may continue to pullback from the yearly high ($1748) as it initiates a series of lower highs and lows, while the Relative Strength Index (RSI) reverses course ahead of overbought territory.

HOW TO TRADE 2020 BITCOIN HALVING Leading up to and following a Bitcoin halving, markets frequently witnessed high periods of volatility. However, price swings may be tamed by traders who have priced in the anticipated change and positioned themselves ahead of it. Since Bitcoin’s inception in 2009, there have been two halvings occurring at four-year intervals – on November 28, 2012 and July 9, 2016. Bitcoin prices rose approximately 18 percent in the month before the halvings of 2012 and 2016. They added an additional 8 percent after the first instance but fell 16 percent following the second one. Volatility this year may be particularly difficult to gauge because of two opposing forces that could amplify or dampen high-magnitude price swings.

US DOLLAR ASEAN WEEKLY RECAP The US Dollar mostly aimed higher this past week against ASEAN currencies such as the Singapore Dollar, Malaysian Ringgit and Philippine Peso. It lost ground however to the Indonesian Rupiah, resulting in an overall down week for my ASEAN-based US Dollar index. Weakness in the haven-linked Greenback notably slowed as of late despite a cautiously optimistic mood on Wall Street as equities rose over the past 5 days. The resilience in the Rupiah comes amid upbeat commentary from Bank of Indonesia’s Governor Perry Warjiyo who mentioned last week that intervention needs “have been largely reduced”. As I mentioned prior, the USD continued to focusing on external developments to find direction against currencies in the developing Asia Pacific region. This will likely continue being the case in the week ahead. LAST WEEK’S US DOLLAR PERFORMANCE US Dollar Fundamental Outlook: SGD, IDR, MYR, PHP Focus on Earnings ASEAN-Based US Dollar Index averages USD/SGD, USD/IDR, USD/MYR and USD/IDR Confirmed coronavirus case growth in Singapore, Malaysia, Indonesia and the Philippines has been slowing on average. The weekly chart below overlays these cases alongside my ASEAN-based US Dollar index. The latter averages USD against SGD, MYR, IDR and PHP. This is also following the cautious easing in global reports such as in countries like the United States, Italy and France.

CANADIAN DOLLAR, CRUDE OIL, US DOLLAR, STOCKS, EARNINGS - TALKING POINTS: Canadian Dollar down as crude oil, stocks drop to start the week Anxiety ahead of key Q1 earnings reports maybe risk-off catalyst US Dollar buoyed by haven demand, anti-fiat gold prices lower The Canadian Dollar led the way lower among its G10 FX counterparts financial markets started the trading week in a defensive mood. Bellwether S&P 500 futures fell – pointing to a broadly risk-off disposition – as financial markets. Crude oil prices sank to the lowest level since 2001, which probably explains some of the Loonie’s outsized losses. The haven US Dollar traded broadly higher, pressuring anti-fiat gold prices. Investors’ dour disposition may reflect anxiety ahead of a busy week for corporate earnings report that look set to paint a bleak picture of the damage wrought by the coronavirus outbreak. Perhaps most worryingly for cyclical assets like stocks and commodity-linked currencies, early signs of stabilization in the Covid-19 infections tally may be shifting the markets’ focus to the outbreak’s long-term economic impact.

AUD/USD RATE RETAINS ASCENDING CHANNEL FORMATION AHEAD OF RBA MINUTES AUD/USD continues to track the upward trending channel carried over from the previous month as the Reserve Bank of Australia (RBA) abandons the dovish forward guidance for monetary policy, and the minutes from the April meeting may heighten the appeal of the Australian Dollar if the central bank tames speculation for additional monetary support. The update to Australia’s Employment report may encourage the RBA to adopt an improved outlook as the economy unexpectedly adds 5.9K jobs in March, and Governor Philip Lowe and Co. may continue to change their tune over the coming months as officials insist that “smaller and less frequent purchases of government bonds will be required” if market conditions continue to improve. The unprecedented efforts taken by monetary and well as fiscal authorities should help to curb the slowdown in economic activity, but the RBA may come under pressure to further support the economy as the International Monetary Fund (IMF) sees global growth contracting 3.0% in 2020.

MAJOR OIL TRADER’S COLLAPSE, RISK APPETITE. TALKING POINTS: Oil trading giant Hin Leong has filed for bankruptcy protection Markets are now weighing the exposure of its lenders Energy prices’ collapse seems to have claimed a major player In every major crisis there comes a point at which weakening economic numbers translate into corporate scalps and the nodal Singapore energy market has reached that point. Its biggest oil trading firm Hin Leong Trading has filed for bankruptcy protection, seeking to restructure nearly $4 billion in debt. If course, the energy sector has taken an unprecedent hit. The coronavirus has shredded energy-demand forecasts even as major producers saturate the market with cheap oil. Oil prices have collapsed to lows not seen since 2001, even after major production cuts which have so far done nothing to revive it.

EURO TECHNICAL PRICE OUTLOOK: EUR/USD WEEKLY TRADE LEVELS Euro updated technical trade levels & sentiment – Weekly Chart EUR/USD in consolidation within April monthly opening-range Critical support at 1.0657 – breach above 1.1187 needed to shift broader focus higher.