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Market View

Volatile opening after ECB’s €750bn new purchase program

Thursday, March 19, 2020 12:14 PM GMT

EU stock markets have a "fragile" opening as European Central Bank announced a €750 billion new pandemic emergency purchase program called PEPP.  The program concerns private and public sector securities to face the risks of the overall outlook for the euro area due to COVID-19.  Additionally, many EU members started banning the short-selling equities as there was a possibility to have a unanimous decision as an EU union. GER30 was up to +0.93% but currently is down, FRA40 is at +2%, IBEX +1% and UK100 turned negative too. Regarding their technical views, GER30 has formed RSI and MACD positive divergence while FRA40 has created a short-term double bottom.

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 GER30 240m chart

FRA 240m chart

In the Asian Market, KOSPI was temporarily suspended as suffered a loss of -8.4%, the worst since October 2008. S.Korea health authorities announced the highest daily number of new infections by 152 in over a week. Therefore, most indices followed the bearish momentum and ended lower (Nikkei -1.04%, HangSeng -2.61%, Shanghai SE -0.98%. Japan’s inflation surprisingly dropped to 0.4% YOY in February while all industry activity increased by 0.8%.

The US pre-session looks bearish as futures are losing ground. Many major US carmakers announced their US factories suspension (GM, Ford and Fiat Chrysler), as well as Nissan, followed their move. US President Donald Trump passed the $104 billion coronavirus relief yesterday while FED’s Kashkari believes that the US Congress needs a speedy action as layoffs rise.

Reviewing the majors, US dollars hit 3 years high and its counterparts are going down aggressively. Reading the daily and weekly charts, GBPUSD is currently bouncing at a major support level, 4 year’s low while EURUSD is reaching the oversold RSI levels again. On the other hand, USDJPY remains strong and is heading at 78.6% Fibonacci level. AUDUSD is getting oversold in RSI on the monthly timeframe.

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EURUSD daily chart

GBPUSD weekly chart

USDJPY daily chart

AUDUSD monthly chart

Checking the ZuluTrade’s Traders Sentiment, the community is buying GBPUSD and GBPJPY while is selling EURUSD, USDCAD, and USDCHF.

 

Today’s economic calendar includes the following news:

Switzerland - SNB Interest Rate Decision

UnitedStates - Initial Jobless Claims (Mar 13)

Disclaimer

The views expressed do not constitute investment or any other advice /recommendation /suggestion and are subject to change. Reliance upon information in this material is at the sole discretion of the reader. Opinions expressed in the report do not represent the opinion of ZuluTrade Social Trading Platform and do not constitute an offer or invitation to anyone to invest or trade.

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