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ZFX: Another history! Dramatic plummet of oil prices

ZFX: Another history! Dramatic plummet of oil prices
ZFX: Another history! Dramatic plummet of oil prices

Monday (April 20) Review

 

  • The volatility of oil prices remained in focus on Monday. The WTI crude futures finally collapsed dramatically to negative territory, crashed more than 300%. The crazy plunge in oil prices triggered risk aversion in the financial markets, and the three major Wall Street indexes all fell, which the DOW declined the most by 2.44%.

 

  • Except the guidelines for reopening the US economy and “Remdesivir”, the market has no further good news after Monday opening. Safe-haven assets were again benefited in risk-off movement. Funds moved to the greenback, U.S. Treasury bonds, and of course the gold market. Gold price once rose above $1700 on Monday US session.

 

  • Regarding the dramatic move of the oil prices, US President Trump said that it would be just in “very short term”. He pointed out that “this is a great time to buy oil” and wanted to seek for the approval of the Congress, as there is 75 million barrels capacity for the strategic petroleum reserve.

 

  • For the coronavirus pandemic, the number of confirmed cases worldwide exceeded 2.47 million, and more than 170000 death. However, the market now believes that the outbreak in the United States and Europe are slowing down.

 

  • U.S. Democrats and Republicans have still not reached an agreement regarding a new economic stimulus plan, a package exceeding $450 billion, on Monday. Trump said he expects a Senate vote “hopefully” on Tuesday.

 

 

ZFX analyst Jacob Leung said that the whole market will closely monitor the oil prices move in the coming days. Although the weakness of oil market can be expected, the “historical” drop was still shocking, which ultimately turned the sentiment bearish. The WTI crude futures will now switch to contract in June, and the oil market may be stabilized a bit temporarily. However, in the mid to long term, the oil “Black Swan” shows that we still need to wait for the major oil-producers’ actions. It would be still pessimistic if there is no more policies implementation.

 

 

AUD / USD fundamentals or market sentiment – ​​The Australian dollar has recently moved closely with the global stock market in same direction.

ZFX: Another history! Dramatic plummet of oil prices - ZFX

Support: 0.6280; 0.6260 Resistance: 0.6330; 0.6350

 

View: The Aussie dropped back sharply from the top showing high volatility ahead.

 

Recommendation: go long 0.6280, target 0.6310, stop loss 0.6260. (Recommendation does not take into account the bid-ask spread factor)

 

Position follow-up and profit and loss: 0.6350 has been long, with a target of 0.6370. (Take profit) (Recommendation does not take into account the bid-ask spread factor)

 

Cumulative profit and loss: 550 pips

 

 

EUR / USD fundamentals or market sentiment – ​​the dollar strengthens but the drop in euro was relatively limited.

ZFX: Another history! Dramatic plummet of oil prices - ZFX

Support: 1.0800; 1.0750 Resistance: 1.0870; 1.0900

 

View: The euro correction may be ended, but the overall trend is still neutral.

 

Recommendation: Go long 1.0810, target 1.0840, stop loss 1.0780. (Recommendation does not take into account the bid-ask spread factor)

 

Position follow-up and profit and loss: 1.0890 has been long, and the stop loss is 1.0875. (Stopped) (Recommendation does not take into account the bid-ask spread factor)

 

Cumulative profit and loss: 440 pips

 

 

GBP / USD fundamentals or market sentiment – ​​the dollar strengthens and the pound is under pressure.

ZFX: Another history! Dramatic plummet of oil prices - ZFX

Support: 1.2350; 1.2300 Resistance: 1.2430; 1.2460

 

View: Sterling seems making ranging breakthrough, tends to be bearish.

 

Recommendation: 1.2450 short, target 1.2420, stop loss 1.2480. (Recommendation does not take into account the bid-ask spread factor)

 

Position follow-up and profit and loss: 1.2500 short, target 1.2470, stop loss 1.2530. (Cancelled) (Recommendation does not take into account the bid-ask spread factor)

 

Cumulative profit and loss: 335 pips

 

 

GOLD fundamentals or market sentiment – ​​risk on again, favored the gold market.

ZFX: Another history! Dramatic plummet of oil prices - ZFX

Support: 1685; 1675 resistance: 1695; 1705

 

View: Gold price rebounded, but not really bullish.

 

Recommendation: 1700 short, target 1695, stop loss 1706. (Recommendation does not take into account the bid-ask spread factor)

 

Position follow-up and profit and loss: 1695 has been short, not yet reached the target of 1685, change target to 1688, stop loss 1695. (Hold) (Recommendation does not take into account the bid-ask spread factor)

 

Cumulative profit and loss: -42 USD

 

 

USOIL (WTI) fundamentals or market sentiment – ​​the oil market is still extremely depressed and the decline has not stopped.

ZFX: Another history! Dramatic plummet of oil prices - ZFX

Support: 21.50; 20.00 Resistance: 23.50; 24.50

 

View: oil prices keep weak and go further down.

 

Recommendation: Big differences in OTC quotes in the oil market, and no recommendations are made at this time.

 

Position follow-up and profit and loss: —

 

Cumulative profit and loss: $ 9.8

 

 

US30 (Dow) fundamentals or market sentiment – affected by oil market shock, US stocks are under pressure.

ZFX: Another history! Dramatic plummet of oil prices - ZFX

Support: 23200; 23000 Resistance: 23800; 24000

 

View: The Dow was finally dragged down by oil prices and tested the support level.

 

Recommendation: 23200 go long, target 23500, stop loss 22900. 23600 go long, target 23800, stop loss 23400. (Pay attention to the OTC quotes may have differences) (Recommendation does not take into account the bid-ask spread factor)

 

Position follow-up and profit and loss: 24350 long, target 24550, stop loss 24100. (Cancelled) (Pay attention to the OTC quotes may have differences) (Recommendation does not take into account the bid-ask spread factor)

 

Cumulative profit and loss: -100 points

 

 

Risk Warning: The above content is for reference only and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations conducted in accordance with this article. Please be firm in your thinking and do the corresponding risk control.