Stocks up, Bitcoin on fire, US Dollar down

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 back through 1.3000. Look for the major pair to hold up above 1.2000 on a monthly close basis for confirmation.

• R2 1.2648 – 14 April high – Strong
• R1 1.2487 – 4 May high – Medium
• S1 1.2266 – 7 May low – Medium
• S2 1.2165 – 7 April low – Strong

GBPUSD – fundamental overview

Trading activity in the Pound will be thinner on this Friday, with the UK out for the May Day holiday. The Pound has done a good job recovering out from weekly lows, with the currency getting a boost from the news that Fed fund futures have begun to price in negative rates in the US. On Thursday, the BoE held the key rate at 0.1%, while making no changes to asset purchases as expected. Governor Bailey did say 'policymakers could expand monetary stimulus as soon as next month' as the UK 'faces an economic slump that could be the worst in Europe,' and the central bank 'could do more QE' but is 'keeping all options open.' Looking ahead, it will the US jobs report that commands most of the attention on the Friday calendar.

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 in sight, with rallies well capped above 110.00 and dips well supported below 104.00.

• R2 108.09 – 17 April high – Medium
• R1 107.34 – 28 April high – Medium
• S1 105.99 – 6 May low – Medium
• S2 105.83 – 17 March low  – Strong

USDJPY – fundamental overview

Overall, there has been a consistent wave of Yen demand, mostly on the back of broad based US Dollar selling. The market has begun to price in negative rates in the US, which has resulted in more favourable yield differentials for currencies relative to the Buck. Interestingly, all of this has offset what would normally be Yen weakness from the ongoing recovery in global equities. Talk of a second supplementary budget in Japan is making the rounds. Looking ahead, it will the US jobs report that commands most of the attention on the Friday calendar.

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 around 1.0500.

• R2 1.0834 – 13 January high – Medium
• R1 1.0710 – 3 March high – Strong
• S1 1.0508 – 16 April/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 0.6570 – 30 April high – Medium
• S1 0.6373 – 4 May low – Medium
• S2 0.6253 – 21 April low – Strong

AUDUSD – fundamental overview

Australia getting a boost into the end of week, with the currency benefitting from a better risk outlook for the global economy and favourable yield differentials, as US markets begin to price in the possibility of negative rates. The RBA's quarterly SOMP hasn't factored into price action, with projections falling in line with expectation. Looking ahead, it will the US jobs report that commands most of the attention on the Friday calendar.

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 at 1.3665.

• R2 1.4350 – 31 March high – Strong
• R1 1.4265 – 21 April high – Medium
• S1 1.3850 – 30 April low – Medium
• S2 1.3728 – 16 March low – Strong

USDCAD – fundamental overview

The Canadian Dollar was able to shrug off a softer than expected Canada Ivey PMI print, with the Loonie instead focusing on the impressive rebound in the price of OIL, improved outlook for the global economy, and the pricing in of negative rates in the US. Looking ahead, we get the monthly jobs reports out of Canada and the US, which could make for some volatile Canadian Dollar trading.

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 weeks ahead, in anticipation of additional upside. Only a weekly close below 0.5500 would give reason for rethink.

• R2 0.6200 – Figure – Strong
• R1 0.6177 –  30 April high – Medium
• S1 0.5910 – 23 April low – Medium
• S2 0.5843 – 3 April low – Strong

NZDUSD – fundamental overview

The New Zealand Dollar is getting a boost into the end of week, with the currency benefitting from a better risk outlook for the global economy and favourable yield differentials, as US markets begin to price in the possibility of negative rates. The RBNZ purchased NZD450 million of government bonds in today's QE operations, meeting its target. The RBNZ has also announced it will look to purchase NZD1.35 billion of government bonds at next week's QE operations, which is unchanged from this week's purchase amount. Looking ahead, it will the US jobs report that commands most of the attention on the Friday calendar.

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 3000.

• R2 3000 –  Psychological – Strong
• R1 2975 – 30 April high – Medium
• S1 2779 – 4 May low – Medium
• S2 2725 – 21 April 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, 2012 high), while in the interim, look for any setbacks to be well supported above 1500.

• R2 1796 – 2012 high – Strong
• R1 1748 – 14 April/2020 high – Medium
• S1 1641– 8 April low – Medium
• S2 1568 – 1 April 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. Shorter studies are however stretched and warn of a pullback ahead.

• R2 10,477– 9 February/2020 high – Strong
• R1 10,0075 – 8 May high – Medium
• S1 8,400 – 30 April low – Medium
• S2 7,704 – 29 April low – Strong

BTCUSD – fundamental overview

Bitcoin has enjoyed a nice recovery since bottoming in March, with the runup in stocks and hype around the halving event contributing to a lot of the momentum. Interest from well known traditional market participants is helping to generate plenty of buzz as well. At the same time, given the extended nature of technical readings into important resistance, we see this as timing well for a sell the fact as the halving event becomes official.

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 289 – 15 February/2020 high – Strong
• R1 252 – 7 March high – Medium
• S1 200 – Round number – Medium
• S2 175 – 16 April 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.