Is it all just smoke and mirrors?

GBPUSD – technical overview

The market has rebounded sharply, after collapsing to a +30 year low below 1.1500. This supports the longer-term constructive outlook, with a major bottom sought out ahead of the start to a big run to the topside. Look for the major pair to hold up above 1.2000 on a monthly close basis for confirmation.

• R2 1.2625 – 13 March high – Strong
• R1 1.2486 – 27 March high – Medium
• S1 1.2165 – 7 April low – Medium
• S2 1.2130 – 27 March low – Strong

GBPUSD – fundamental overview

The latest data out of the UK has come in a little softer on the whole, with GDP below forecast, industrial production as expected and the trade deficit larger than anticipated. Still, the Pound has been able to benefit from the US Dollar side of the equation. The latest Fed gesture, discouraging US initial jobless claims and the ongoing rally in equities, have all accounted for broad based USD weakness. NIESR said the UK economy 'could contract as much as 25%' in Q2. Officials were reportedly planning to extend the nation's lockdown. The UK government received an extension on its overdraft at the BoE, and the UK Treasury and BoE temporarily extended the ways and means facility. UK PM Johnson's medical condition has improved. Looking ahead, US CPI and a Fed Mester appearance are the only notable standouts on this thinly traded holiday Friday.

USDJPY – technical overview

We're seeing a pickup in volatility in the major pair, with the market swinging wildly through the upper and lower bound of a massive triangle. Still, there is no clear direction insight, with rallies well capped above 110.00 and dips well supported below 104.00.

• R2 109.72 – 27 March high – Medium
• R1 109.38 – 6 April high – Medium
• S1 107.80 – 3 April low – Medium
• S2 106.92 – 1 April low  – Strong

USDJPY – fundamental overview

Despite the rally in US equities, the Yen has rallied into the end of the week, with the currency paying more attention to broad based US Dollar outflow in response to the Fed's latest gesture, in which it is committed to injecting an additional $2.3 trillion into the US economy. The BoJ lowered its assessment of all of the countries regional economies 'in response to the damage caused to production, consumption and corporate finances' by the virus. It was reported the BoJ 'will likely project' that its economy will contract this year which would mark the first such occurrence since 2014. BoJ Governor Kuroda said 'uncertainty surrounding the economy is very high now, and financial markets are still nervous'. The only notable standout on Wednesday’s calendar comes in the form of the Fed Minutes.

EURCHF – technical overview

The market remains very well capped into offers and the medium-term picture continues to favour the downside. A break back above 1.0710 would be required to take the immediate pressure off the downside. Technicals are however looking extended and the market should be well supported ahead of 1.0500.

• R2 1.0834 – 13 January high – Medium
• R1 1.0710 – 3 March high – Strong
• S1 1.0524 – 20 March/2020 low – Medium
• S2 1.0500 – Psychological – Strong

EURCHF – fundamental overview

The SNB remains uncomfortable with Franc appreciation and continues to remind the market it will need to be careful about any attempts at trying to force an appreciation in the currency. But the SNB will also need to be careful right now, as its strategy to weaken the Franc is facing headwinds from a less certain global outlook, and from a US administration that has put Switzerland on its currency manipulator watchlist. Any signs of risk liquidation in 2020, will likely invite a very large wave of demand for the Franc that will put the SNB in the more challenging position of needing to back up its talk with action, that ultimately, may not prove to be as effective as it once was, given where we're at in the monetary policy cycle.

AUDUSD – technical overview

Technical studies are in the process of unwinding, after the market traded down to its lowest levels since 2003. There is evidence of a longer-term bottom, though the market will need to break back above the December 2019 high at 0.7032 to take the immediate pressure off the downside.

• R2 0.6685 – 9 March high – Strong
• R1 0.6493 – 12 March high – Medium
• S1 0.6115 – 8 April low – Medium
• S2 0.5980 – 3 April low – Strong

AUDUSD – fundamental overview

The Australian Dollar has moved well past this week's ratings outlook downgrade from S&P, with the currency getting a big boost from the resurgence in demand for risk assets. Positive signs out of China, and the Fed's latest gesture to add as much as $2.3 trillion into the economy, have been major drivers of this latest round of Aussie demand. Looking ahead, US CPI and a Fed Mester appearance are the only notable standouts on this thinly traded holiday Friday.

USDCAD – technical overview

An intense market rally has stalled out just ahead of the 2016 high. At this stage, there is risk for a more meaningful period of correction, with potential for setbacks to extend back down towards previous resistance turned support, in the form of the 2018 high.

• R2 1.4483 – 25 March high – Medium
• R1 1.4350 – 31 March high – Strong
• S1 1.3922 – 27 March low – Medium
• S2 1.3728 – 16 March low – Strong

USDCAD – fundamental overview

The Canadian Dollar has continued to extend its recovery run against the Buck, with the Loonie managing to mostly shrug off a discouraging Canada employment report showing a healthy jump in the unemployment rate and a March employment drop that was the largest on record. It seems the Loonie has been feeling better about prospects for an agreement on OIL production cuts, and the latest Fed gesture, in which the central bank committed to more money printing. Looking ahead, US CPI and a Fed Mester appearance are the only notable standouts on this thinly traded holiday Friday.

NZDUSD – technical overview

There's a case to be made for a meaningful bottom, with the market looking quite extended after dipping below major psychological support at 0.5500. As such, look for setbacks to continue to be well supported in the days ahead, in anticipation of additional upside. Only a weekly close below 0.5500 would give reason for rethink.

• R2 0.6160 – 13 March high – Strong
• R1 0.6100 –  Figure – Medium
• S1 0.5843 – 3 April low – Strong
• S2 0.5777 – 26 March low – Strong

NZDUSD – fundamental overview

The New Zealand Treasury said 'it's becoming more likely New Zealand will see a deeper economic contraction in the June quarter than seen in recorded history' and that it expects a 'substantial fall' in GDP this year. Nevertheless, the Fed's latest commitment to an additional $2.3 trillion into the US economy, jaw dropping US initial jobless claims numbers, and the ongoing recovery in US equities, have all managed to more than offset any Kiwi fallout from the New Zealand Treasury concerns, with the New Zealand Dollar higher into the weekly close. Looking ahead, US CPI and a Fed Mester appearance are the only notable standouts on this thinly traded holiday Friday.

US SPX 500 – technical overview

Setbacks have been intense as the market puts in a longer-term top. The market has collapsed through the 2018 low, with the next major support coming in at the 2016 low around 1800. Extended readings have led to an overdue corrective bounce, but rallies should now be well capped ahead of 2900.

• R2 2850 –  50% Fib Retrace – Strong
• R1 2818 – 9 April high – Medium
• S1 2433 – 2 April low – Medium
• S2 2182 – 23 March/2020 low – Strong

US SPX 500 – fundamental overview

Although we've seen attempts at recovery in response to unlimited QE from the Fed and massive US stimulus, with so little room for additional central bank accommodation, given an already depressed interest rate environment, the prospect for additional runs to the topside, on easy money policy incentives and government stimulus, should no longer be as enticing to investors. Meanwhile, tension on the global trade front, geopolitical risk, and ongoing worry associated with coronavirus fallout, should weigh more heavily on investor sentiment in 2020.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, and suggests the market is in the early stages of a bullish move that follows a multi-month consolidation. The next major level of resistance comes in around 1800 (measured move extension target), while in the interim, look for any setbacks to be well supported above 1500.

• R2 1703 – 9 March/2020 high – Strong
• R1 1690 – 9 April high – Medium
• S1 1558– 24 March low – Medium
• S2 1451 – 16 March/2020 low – Strong

GOLD (SPOT) – fundamental overview

The yellow metal continues to be well supported on dips with solid demand from medium and longer-term accounts. These players are more concerned about exhausted monetary policy, extended global equities, political uncertainty, coronavirus fallout, systemic risk and trade war threats. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an unnerving climax.

BTCUSD – technical overview

Setbacks should be very well supported ahead of the 2018 low, with a higher low sought out in favour of a bullish continuation back above the 2019 high and towards the record high from late 2017 further up. Ultimately, only a weekly close below 5,000 would compromise the constructive outlook. Back above 10,500 further encourages the bullish prospect.

• R2 10,477– 9 February/2020 high – Strong
• R1 7,440 – 7 April high – Medium
• S1 5,660 – 20 March low – Medium
• S2 3,995 – 13 March/2020 low – Strong

BTCUSD – fundamental overview

Bitcoin has felt the impact of global macro pressures, with the currency falling victim to broad based risk liquidation in Q1 2020. However, despite the recent slide, there continues to be good demand from players looking out to the medium and longer term, who see Bitcoin as a safe haven, store of value asset.

BTCUSD - Technical charts in detail

ETHUSD – technical overview

The market is in the process of attempting to establish a meaningful base after stalling out in the latter half of 2019. Look for setbacks to be well supported above the 2018 low, in favour of another big bounce, eventually back towards and through the 2019 high up at 363.

• R2 200 – Psychological – Strong
• R1 176 – 7 April high – Medium
• S1 100 – Psychological – Strong
• S2 90 – 13 March/ 2020 low  – Strong

ETHUSD – fundamental overview

While there is plenty of Ether demand built up, with so much optimism around prospects for the blockchain, given all of the development going on in the decentralised finance space, macroeconomics will likely play a negative role in 2020, with Ether expected to underperform in a mostly risk off backdrop, in light of Ethereum's higher sensitivity and correlation with risk themes.