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Weekly Preview: Technical analysis on USDJPY, GBPUSD, USDCNH, XAUUSD, WTI, SPX

Market Analysis - 3 Min Read Desmond Leong | 23 Mar 2020

Weekly Preview: Technical analysis on USDJPY, GBPUSD, USDCNH, XAUUSD, WTI, SPX

Risk aversion remains the main theme of the market as the Covid-19 makes its way to two of the largest financial centres; London and New York. Death toll rates are soaring as investors remain on tenterhooks with the situation nowhere near its peak. Meanwhile, demand for the USD surged as the crash in stock markets called on the need for cash as investors scrambled to cover margin calls. Meanwhile, the rapid appreciation of the USD has led to an increased chatter of coordinated and in-mass interventions by Central banks, with the Fed stepping in with the reactivation of swap lines to provide a backstop to the ongoing liquidity crisis in the USD. The one-way traffic rally in the USD despite the measures implemented by the Fed is a sign that Central banks' actions could be falling on deaf ears as investors remain firm in their belief that cash is king in times of crisis.

CURRENCY: USDJPY

 

 

Chart by TradingView.com

Price is facing bearish pressure from our first resistance where we could see a drop below this level to our first support level. Ichimoku is also showing signs of oversoldt as well. USD may see a retracement before it goes higher.

CURRENCY: GBPUSD

Chart by TradingView.com

Price is facing bearish pressure from our first resistance where we could be seeing a further drop to our first support level. Ichimoku cloud is also showing signs of bearish pressure in line with our bearish bias. RSI is showing a bearish breakout as well. 

CURRENCY: USDCNH

Chart by TradingView.com

Price is facing bullish pressure from our Ichimoku cloud and 1st support where we remain bullish above this level. Given China’s economy is badly hit and might take long to recover, the CNH could weaken further. 

CURRENCY: SPX

Chart by TradingView.com

Price is facing bullish pressure from our Ichimoku cloud and 100 EMA where we remain bullish above this level. However, given that the stock market is heavily driven by fundamentals and the developments of the Covid-19, a break below our first support level could see a further drop to our second support level. 

CURRENCY: XAUUSD

Chart by TradingView.com

Gold price formed a double bottom reversal pattern and also bouncing off support at 1451.08. Stochastics reacting above ascending trendline support and support level as well. We see a possible short term rise in price towards 1st resistance at 1547.70. Surpassing 1st resistance would confirm double bottom pattern and strengthen bullish bias for further push up towards 2nd resistance. Breaking below 1st support will see price drop lower towards 2nd support at 1394.66.

CURRENCY: WTIUSD (USOIL)

Chart by TradingView.com

Oil prices drifted lower over the course of this week, holding below long term 55-period EMA and also short term descending trendline resistance. RSI indicator is also coming close to testing resistance where price reacted in the past as well. The rebound towards the end of the week could be short lived and we can expect to see another push down below resistances.

The information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted.

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