FOREX TRADING STRATEGY APR 24 - LOOKING AT A MESS

Apr 24, 2020
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Another trading week is about to end. Take a look at the hottest updates before the weekends so that we can set our trading strategies properly.

About the outbreak

Coronavirus infections in the United States have increased at the slowest pace in 3 weeks, but California has reported the highest number of deaths in a 24-hour period. The number of hospitalizations in New York is relatively stable, but Governor Andrew Cuomo said: "That's not great news." When President Donald Trump gave a mixed reaction and unexpected policy changes, his community support was disappointing everyone.

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Spain has reported the largest number of new infections and deaths in nearly a week. Across Europe, viruses are driving countries to undesirable milestones: a new record of deaths. However, Germany is a bright spot for Europe and Italy has recorded the first recovery from coronavirus.

Analysts warn that Indonesia's relatively loose social containment means that its economy will take longer to recover than other countries in Southeast Asia, in when Japan sought to extend the Golden Week holiday to tame the spread of the virus. The number of coronavirus infections worldwide has reached 2.6 million, with the number of deaths exceeding 187,000.

Gilead down

Gilead shares were attacked for a second time in a week after a summary of a Chinese test of their Remdesivir showed it was a failure. The summary did not clearly show the actual results and this caused Gilead's stock to drop 4.3% to $77.78 at yesterday's close in New York. The World Health Organization, which helped coordinate the global response to the virus, said it had accidentally posted the results on a website to help track the treatments for the disease. The summary shows that this medication does not help patients recover faster; and 13.9% of patients taking the drug died, compared with 12.8% of patients receiving standard care.

Chaotic markets

Asian stocks are likely to have a tumultuous start after the recovery of US stocks faltered in front of a report that a coronavirus drug was giving poor results when tested. Oil bounced back above $16 a barrel as traders looked at production decline as a result of a weakening demand from the coronavirus epidemic. The futures market in Tokyo declined but increased in Hong Kong and Australia. The S&P 500 index lost its previous 1.6% gain to close with very little change, halting the recovery of global stocks after a two-week strong rally as investors assessed a series of newspapers. Income statement along with economic data and latest news about viruses. Data from the United States shows that the total number of unemployed cases has exceeded 26 million in the context of economic downturn caused by the pandemic. Treasury bonds are higher and the dollar is weaker than G10 currencies.

Unanalyzable

Considering the complexity of oil at this time, it is a blessing because current regulations restrict new discount bets to the US Oil Fund (USO) - an ETF that tracks the most valuable oil. Besides the idea of ​​extremely volatile oil prices, traders need to have the view that the price's impact of future contracts will always change, as well as an accurate understanding of how the operations of the ETF fund is currently suspended from issuing shares. 

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Strangely, no one seems to be deterring retail investors from believing that they can use ETFs to profit from the recovery of oil prices. But with the fund's assets held in crude oil contracts subject to change at any time without notice, anyone participating in USO should also realize that the fund has stopped placing direct bets on price direction, according to Cantor Fitzgerald. Peter Cecchini, Cantor's chief market strategist, said: "You don't seem to be able to analyze the direction of the disclosures, because you can't figure out the key points along the curve of future contracts."