Dow Jones, Oil Wobble on Virus. Gold Prices, Yen Soar. Fiscal Support Eyed

It was a very choppy week on Wall Street after its worst 5-day performance since 2008. The Dow Jones and S&P 500 gave up most of their upside progress from the middle of the week, leaving behind large upside wicks in acute signs of indecision. At one point on Friday, the VIX “fear gauge” touched highs it last saw since the Great Financial Crisis.

The haven-linked US Dollar fell against the Euro and anti-risk Japanese Yen while shining against the pro-risk Australian and New Zealand Dollars. Emergency 50-bp rate cuts from the Federal Reserve and Bank of Canada failed to soothe financial markets for now. Sentiment-linked crude oil prices closed at their lowest since August 2016 as anti-fiat gold prices soared.

Coronavirus fears will arguably remain in focus as more cases spread outside of China in countries like South Korea, Italy, France and the United States. The limits of monetary policy in an era of low interest rates places the focus for support on fiscal stimulus. While the ECB can cut this coming week, they are already below zero and in the middle of a quantitative easing program.

Markets may tune in on the UK government budget announcement which will offer insight into measures to help support growth amid the Wuhan virus outbreak. Investors may also be awaiting more measures from the U.S. which has approved about $7.8b in emergency funding. Time will tell whether or not that will be interpreted as enough with the trade war impact on global growth still fresh in mind.

Fundamental Forecasts:

Gold Nears Record High as Yields Collapse & Volatility Rages

Gold price action surged toward all-time highs after notching the biggest weekly gain in nearly a decade. Can the precious metal press higher as interest rates implode or will bullion lose its luster?

Euro Forecast: Will EUR/USD Rise Further in Week Ahead?

The markets are convinced the ECB will cut Eurozone interest rates Thursday but, with rates so low already, that’s unlikely to weaken EUR/USD.

Australian Dollar at Mercy of COVID-19 as China’s Economy Slows

The markets are convinced the ECB will cut Eurozone interest rates Thursday but, with rates so low already, that’s unlikely to weaken EUR/USD.

US Dollar Fundamental Outlook Mired by Bets for More Fed Rate Cuts

Fresh data prints coming out of the US economy may do little to influence the US Dollar outlook amid overwhelming expectations for another Fed rate cut in March.

Crude Oil Weekly Forecast: Deal or No Deal – Oil Prices Continue to Slump

Oil remains stuck in bear market territory with prices unlikely to make any sort of rebound until OPEC and its allies agree on substantial output cuts

USD/MXN Outlook: Dollar Pushes Higher as COVID-19 Causes Flight to Safety

The Mexican Peso continues to lose ground against the US Dollar as risk-aversion continues to drive market sentiment.

Dow Jones & DAX 30 Forecasts for the Week Ahead

Stocks remain threatened as investors continue to pressure risk assets and growth-linked commodities. With an upcoming ECB meeting, will markets be offered yet another lifeline in the week ahead?

Technical Forecasts:

Canadian Dollar Outlook: USD/CAD Looks Due for Pop in Volatility

The US Dollar is trying to run against the Canadian Dollar but is having a bit of trouble; volatility is due to rise with other currencies so that may soon change.

US Dollar Decimated, Now What? USD Technical Outlook

The USD outlook took a very sharp turn for the worst recently, there are some levels and factors worthy of attention as we go into a fresh week of trading.

DAX 30 & FTSE Technical Forecast for the Week: Volatility is Back

Equity market volatility remains elevated, as such, with uncertainty continuing to plague global markets, the bottom appears yet to be reached.

Euro Outlook: EUR/USD Coronavirus Breakout Surges to Fresh 2020 High

Euro surged for a second consecutive week with the price breakout stretching to fresh 2020 highs. Here are the levels that matter on the EUR/USD weekly technical chart.

Gold Price Forecast: Gold Goes Ballistic as Fear Grips Global Markets

Gold prices have remained strong and this week caught another shot-in-the-arm as the Federal Reserve hurried in an emergency cut.

Japanese Yen Outlook: USD/JPY, EUR/JPY, AUD/JPY, CAD/JPY Test Support

The Japanese Yen faces key tests against the US Dollar, Euro, Australian Dollar and Canadian Dollar ahead. What is the technical outlook in USD/JPY, EUR/JPY, AUD/JPY and CAD/JPY?

British Pound Technical Analysis: GBP Biased Lower in Choppy Trade

The British Pound has put in a mixed performance amid coronavirus-inspired market volatility but the long-term price trend favors a downside bias.

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