Daily Position Report

Market Focus

The S&P 500 Index retreated from a record high and fell more than 4% in afternoon trading, set for its biggest drop since June amid declines in Apple, Microsoft, Amazon and Facebook. The Nasdaq 100 dropped more than 5%, its biggest intraday decline since March. European stocks erased gains and finished more than 1% lower. Treasury yields dipped and the dollar rose slightly.

Global equities are pulling back hard from unprecedented highs as investors question the justification for steep valuations as the pandemic rages on. While data Thursday showed applications for jobless claims fell last week, U.S. investors may need evidence of a fuller economic recovery after a 60% run-up in the S&P 500 since its March lows. At the same time, PMI performance mixed, ISM Non-Manufacturing PMI demonstrated 56.9 which loss expectation of 57 and drop from 58.1 against last month.

Meanwhile, U.S. health officials have told states to prepare for a Covid-19 vaccine to be ready by Nov. 1, an aggressive goal that suggests availability just before the presidential election. Infectious disease expert Anthony Fauci warned of a potential surge in American cases from the coming long holiday weekend.

Market Wrap

Main Pairs Movement

The euro headed for the longest losing streak in over two months amid continued long liquidations and stop orders. The dollar and yen gained as stocks fell. ECB Governing Council members voiced concern about the common currency’s appreciation and its effect on exports.

The greenback ebbed amid after news the trade deficit swelled to the widest in 12 years and as service sector data showed modest growth, while labor market data was mixed. The yen is the only currency that gained against the greenback while commodity currencies lead losses as oil fell for a second session.

GBP/USD slips 0.5% to 1.3281; Risks of an unintended breakdown in Brexit talks are increasingly tangible, which is overlooked by both volatility and current spot levels.

COVID-19 Data (EOD):

Technical Analysis:

USDCHF(H4)

The USDCHF pair is currently trading at 0.9094 during American trading session. Its breakthrough a slightly consolidation range between 0.9111 and 0.9138. meanwhile, 60-MA goes flat since August and 15-MA mixed cross the long-term MA. Furthermore, Swiss franc is still on the slightly downtrend bands accordance with red and purple area. For RSI perspective, index show neutral momentum with 51.3 coincide with the flat 60-MA figures, suggesting a tepid market move in recent.

Resistance: 0.9111, 0.9138

Support: 0.9076, 0.9025

XAUUSD(H4)

Gold dipped steeply with second consecutive day and currently trading at 1930.91 which loss $60 against recent high level. For MA perspective, market trade below 60-MA with it slightly down of flat movement and 15-MA plummet to close to 60-MA. Furthermore, gold currently close to bottom zone that form from August. On the other hands, gold market still show bearish which get tamp down by a yellow downtrend line since July, RSI index suggesting market bearish without signal to downwind.

Resistance: 0.7347, 0.7392

Support: 0.7238, 0.7195, 0.7147

GBPUSD(H4)

After yesterday suggestion for bearish sterling, it consecutive dropped with second days, currently trading at 1.3281. From RSI indicator, it has shown that the pair dipped below the 50 then hold 44 approximately then we expect it will neutral momentum move today. Overall, sterling retreat from highest level but still on ratchet up trend as yellow mid-term uptrend56 support. It is worth noting that 60-MA shows ebbed dramatically, we suggest focusing on first support at 1.3271 which is a seemly prop up level as it kicks off to breakthrough and soar up to recently high.

Resistance: 1.34, 1.3476

Support: 1.3271, 1.3192

Economic Data

Daily Position Report

Market Focus

U.S. market rises along with European market as the nearly relentless rally in risk assets continues, encouraged by some constructive U.S. economic report and moderating COVID-19 inflections. U.S. major indices hold a firm advance after a closely watched report on ADP Non- farm Employment Change on Wednesday morning. Tech shares, except Apple Inc. and Tesla Inc., again lead the charge, followed by automakers and utilities shares, pushing all three indices to open higher. Following by the best month for stocks in decades, investors are now putting a high expectation on a combination of support from the Federal Reserve on a solution for COVID-19.

Lebanon starts the formation of a new government with implementing urgent reforms after the previous leadership quitted. With all disasters happened in Lebanon, French president Macron gives Lebanon the ultimatum, which Lebanon has two months to start reform process and cleaned up its mess. President Macron expressed that if there is no progress on a reformation, then there is no need for the international communities, including United Nation, to help Lebanon.

Market Wrap

Main Pairs Movement

EURUSD falls further to 1.1821 during the U.S. trading session, which is the lowest since last week. The dollar advances broadly today, extending its bounce from a two-year low. The economic report, ADP Non- Farm for the month of August, helped the dollar to climb. In the meantime, the euro comes under pressure after the comment from the European Central Bank as Jens Weidmann, one of European Central Bank council member, who argues that Europe’s monetary support is temporary, and it needs to scaled back after the pandemics.

Oil future drops on Wednesday as it fails to find a support from a hefty weekly drop in U.S. oil supplies and production as output in the Gulf of Mexico, has seen a better- than- expected recovery from Hurricane Laura. According to Energy Information Administration, U.S. crude oil inventories has fallen by about 9.4 million barrels by last week, resulting in Crude oil future to fall around 3 percent at 41.39 as of writing.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD(H4)

The EURUSD pair is currently trading at 1.1841 during American trading session. It extends its declining trend for the third consecutive day. In the 4- hour chart, the EURUSD pair appears to trade stably below the 20 SMA, finding a short- term resistance of 1.1912. As of now, the pair is heading toward its next support level at 1.1817; if it eventually breaks through, it will have rooms to extend its decline toward 1.1780 zone. Meanwhile, the RSI indicator shows that there are still rooms for the pair to drop because the pair is still neutral.

Resistance: 1.1881, 1.1912, 1.1948

Support: 1.1817, 1.1785

AUD/USD(H4)

The AUDUSD pair is trading at 0.7334 during the U.S. session. Today, the Australian dollar is one of the worst performing major currencies, dropping approximately 0.51% against the dollar. In the 4- hour chart, AUDUSD has broken back below 0.7347, which was one of the supports in the short- term. Now, the pair is heading to 0.7238 support zone; meanwhile, it also has broken the uptrend 20- SMA, suggesting a bearish momentum. However, despite of showing a bearish tendency, the MACD signal lines are still above the mid- point; the MACD histogram is showing to sell and although it is bearish, it would be good to see the signal lines join them for a confirmation.

Resistance: 0.7347, 0.7392

Support: 0.7238, 0.7195, 0.7147

GBPUSD(H4)

The GBPUSD pair shows a downward trend on Wednesday, currently trading at 1.3352. From yesterday’s RSI indicator, it has shown that the pair was overbought, resulting in today’s reversal trend. Meanwhile, the bearish divergence of the MACD indicator suggests that the Sterling Pound is overbought. Currently, the pair is testing its closest support level at 1.3327; if it eventually breaks through, it is likely to see the pair to push down and fall into 1.3120 zone with some external factors.

 Resistance: 1.3383

Support: 1.3327, 1.3253, 1.3122, 1.3059

Economic Data

Daily Market Analysis

Market Focus

U.S. stocks notched fresh records, with tech shares in the lead as investors snapped up work-from-home winners. Zoom Video Communications Inc. led a rally in companies well positioned for stay-at-home orders, while Apple Inc. pulled the S&P 500 Index to a fresh high after August’s blowout gain. The dollar erased losses as data showed U.S. manufacturing expanded last month at the fastest pace since 2018. Treasury yields dipped.

Stocks have churned ever higher as investors anticipate a flood of cash coming into the market, with last week’s announcement from the Federal Reserve that the central bank will maintain an easy-money policy adding fuel to the trade. Meanwhile, Chinese factory data Tuesday signaled rising global demand for exports after the initial shock of the pandemic, a good sign for the world economy. Euro-Area Inflation Turns Negative for First Time Since 2016.

On the other hands, Australia’s official cash rate remains at 0.25 per cent after the RBA board decided to maintain current settings amid the coronavirus recession. The board has decided to boost the bank’s term funding facility, which will allow banks and other institutions more funding.

Oil climbed toward $43 a barrel as the pickup in economic activity in the U.S. and China signaled a pronounced recovery in crude consumption.

Market Wrap

Main Pairs Movement

The euro dollar rose above $1.2 for the first time in more than two years as the dollar extended its five-month slide. Euro dollar advanced as much as 0.6% on Tuesday to 1.2011, its highest since May 2018, before setting back to around 1.195 as market cite options-related selling around the day’s highs. Meanwhile, investors have been piling into the euro for weeks, with speculators holding a record bullish position in futures. In contrast, DXY once hit the two years low at 91.7 then rebound after fueled by manufacturing.

Consumer prices in the euro area are falling for the first time in four years, which is likely to trouble ECB policy markets. A strong currency generally limits inflation by tamping down import prices. At the same time, ECB Executive member Lane said the euro-dollar rate does matter, even though monetary policy doesn’t target the exchange rate.

A surge in China’s yuan to more than one-year high is testing the central bank’s appetite for currency strength. The yuan jumped as much as 0.56% to 6.81 a dollar, the outperformance level since May 2019, as the dollar traded at a two year low.

COVID-19 Data (EOD):

Technical Analysis:

XAUUSD(H4)

Gold’s rally fizzled after comex futures climbed back above $2000 an ounce, with the dollar erasing losses and a U.S. report adding signs of a recovery in global manufacturing. High volatility dragged gold testing it 15-MA at $1970.19. at the meantime, RSI indicator neutral market movement is expecting. Geopolitical event and eco data confidence seem a teeter for both side that pose the unclearly manifest of gold market in short term.

Resistance: 2000

Support: 1959.27, 1926

USDCAD(H4)

USDCAD is currently trading at 1.3064 as the U.S. trading session after it slipped to lowest level at 1.3 since January. Furthermore, RSI index steeply rebound from over sought area to neutral level at 44. As MA perspective, loonie fell after it hit 15-MA then down a little to 1.306. For short term, we expect that loonie would spiral at low level and optimistic commodities market would propel Canadian economy.

Resistance: 1.3111, 1.3138

Support: 1.3025, 1.3

AUDUSD(H4)

Aussie is little changed for second consecutive day and reversed from highest level at 0.741 after RBA unchanged interest rate at 0.25%. RSI index dropped below 70 set around 65 currently. The pair seem solid at range recent high and 0.7342 which is testing the 15-MA and RSI show bullish remain. At the same time, Australia is ahead of GDP figure that would be a good bolster for current exchange rate.

 Resistance: 0.7389

Support: 0.7235, 0.7114

Economic Data

Daily Market Analysis

Market Focus

U.S. markets drift slightly higher as investors assess economic reports and a resurgence of coronavirus cases in Europe. Economic data from most of euro- area seem to worsen than expected, except the U.K. Europe is grappling with a resurgence of pandemic infections, with little appetite amid top officials to resort to stringent restrictions that help control the spread out earlier this year. The slowdown of the economic recovery marks up the dollar and the U.S. Treasuries. In the meanwhile, public eyes are focusing on two companies, Apple Inc., and Tesla Inc. After becoming the first $2 trillion in value earlier this week, Apple Inc. continues to hit a record intraday high, solidifying its market capitalization at more than $2 million. At the same time, Tesla Inc. extends gains to hit a fresh record intraday high, rallying above $2000 per share for the first time ever and bringing its year to date advance to more than 370%. Those performances are exceptionally impressive.

British economy recovers faster than expected in August according to stellar economic reports. But British economy still faces a long way to recover after shrinking by a record of 20% during pandemic periods.  At the same time, U.K.’s Purchasing Managers Index indicates that the business activities have jumped to a seven- year high, showing a decline in business confidence and an increase in planning to shed jobs opportunities. Other than that, British market will focus on the progress in talks for a trade deal with the European Union when the Brexit transition is completed.

Main Pairs Movement

The Canadian dollar falls a little against the dollar as the U.S. has favorable economic data, but the pair loses its traction amid profit- taking before the weekend. The Canadian retail sales have picked up in June and July as the economy begins to reopen from pandemic lockdowns. In the meanwhile, WTI crude is down 1.3% at around $42.28 per barrel, resulting in a depreciation in the Canadian dollar. The USDCAD is currently trading at 1.31915, having 0.04% in average as of writing.

The EURUSD pair drops further around the level of 1.1751, which is the lowest level in the past two weeks as of writing. The dollar is the top performer today after the release of the U.S. PMI and Home Sales report that both are better than expectations. Oppositely, the euro is fading as escalating COVID-19 cases and weak European area growth weigh on the common currency. As a result, investors are expecting the downturn of the euro.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD(H4)

After challenging the resistance level at 1.1879, the EURUSD pair turns into a bearish momentum. From one perspective, the pair is in a short position because It breaks through the uptrend line; however, from another perspective, the pair is under consolidation between 1.1879 and 1.1708. If it eventually breaks through 1.1708, then it suggests a short position. The technical view of ongoing RSI indicator suggests that the pair is neither oversold nor overbought. That being said, it is recommended to wait and see the pair’s further direction.

Resistance: 1.1879, 1.1929

Support: 1.1708, 1.1425

GBPUSD(H4)

Sterling fell to the 1.30895 after released statistics in British continued to improve. Retail sales for July rose 3.6% that beat 2% forecast. Multiple PMI indicator also torrid and upbeat the optimistic forecast, Service and Composite boost over 60. On the other hands, Brexit negotiations tension had ratchet up that impact on the pound this week. No deal progress can be expected, and market is pricing for the further risks.

Resistance: 1.327, 1.3338

Support: 1.3007, 1.2746, 1.2256

AUDUSD(H4)

The AUDUSD pair failed to test its resistance at 0.7209, heading into a consolidation range between 0.7209 and 0.7114. The indicators suggest the trend to remain the same; now, the pair is waiting for attempts to overcome the lower limit of 0.7114. It is expected to see AUDUSD to weaken due to the strength of the dollar. With the dollar gathering strength after the release of the U.S. data, the AUDUSD will be likely to lose its traction.

Resistance: 0.7209, 0.7236

Support: 0.7114

Daily Market Analysis

Market Focus

Stocks climbed as gains in giant technology companies drove the Nasdaq 100 to a record, tempering concern that a recovery from the pandemic-induced recession will need more time. Treasuries rose. The rally in heavyweights such as Apple Inc. and Tesla Inc. offset a slide for energy producers and banks amid light trading volume.

Earlier Thursday, equities slumped as applications for U.S. unemployment benefits unexpectedly increased, with initial jobless claims climbing to more than 1.1 million. The report reinforces forecasts that improvement in the labor market will occur in fits and starts, with the latest uptick likely representing a pause in that recovery — rather than a substantial change in direction.

On the trade front, China confirmed plans to talk with U.S. officials soon to review progress on their preliminary deal — a rare engagement between the world’s largest economies as relations deteriorate. Speaking in Arizona earlier this week, President Donald Trump said he canceled those plans because he’s unhappy with the Asian nation’s role in the Covid-19 pandemic.

Market Wrap

Main Pairs Movement

EURUSD close at 1.186 level while dollar swung in disarray market as pressure from progress on the U.S.-Sino trade front was balanced out by geopolitical concerns. In early session, euro managed to rise as much as 0.3% to 1.18639 after Chinese commerce ministry spokesman said China and U.S. have decide to hold a call in near term. Before that, euro ebbed to nadir level at 1.1812 amid thin liquidity.

on the other hands, European Central Bank policy makers expressed uncertainty at their latest policy meeting about economic outlook and the extent to which they will have to deploy monetary stimulus. Notwithstanding bleak prospect in economic aspect, infection is rising across euro boarder that forced some governments to reinstate travel warning and tighten restrictions on mask-wearing and social contact.

At the same time, unemployment is creeping up despite generous furlough schemes in many countries.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD(H4)

After whipsaw at euro market yesterday, it quells the upwind as ECB released the latest meeting record. The price steady around at 60 SMA in the 4-hour chart but 15 SMA turn back his head. At the same time, RSI index is at 48 around that curb the market flow momentum. we believe euro will consolidate at range 1.1804 to 1.18832. however, Euro-area PMIs will be released today that probably induce more fluctuate if data out of the expectation.

 Resistance: 1.1883, 1.1948

Support: 1.1804, 1.1746

GBPUSD(H4)

Sterling hover the yesterday dip as market expected the tension between U.S. and China is undermining, greenback index pulled back as well. On the other hands, U.K. is heading to some crucial eco-data while previous inflation index has beaten the expectation. Other than this, Sterling does not show the torrid as the RSI index under 70 figures but still need be caution that price level is both above 15 and 60 SMA.

Resistance: 1.3235, 1.3275

Support: 1.3086, 1.3131

AUDUSD(H4)

Technically speaking, price is holding around 0.7181 level currently after price dropped to uptrend line. For mid-term, 0.7231 will be a strong bullish signal for Aussie. On the other hands, it hovered space is slowing down as risk appetite appears to tepid in the latter half of the week. But on fundamental perspective, market is wagering inflation will rise in further so Aussie manifest would more depend on commodities market movement.

Resistance: 0.7231, 0.7264

Support: 0.7142, 0.7181

Economic Data

Daily Market Analysis

Market Focus

Stocks are slightly higher after closing at a record for the first time since COVID-19 started amid a rebound in giant technology companies. Major indexes advance as investors are waiting for the latest stimulus plan discussion ahead of the Federal Reserve’s meeting minutes. In the meanwhile, investors are putting the spotlight on Apple Inc.; Apple Inc. has become the first domestic company to reached $2 trillion in value, capping a staggering ascent that began in the pandemic.

European Union endorses sanctions on Belarus after having an emergency meeting for the purpose of protesting against its embattled president, Alex Lukashenko. The European Union discloses that it does not recognize the election result, which is possibly involving in electoral frauds. As a result, the European Union threatens to reroute 53 million euros away from Belarus, which is the fund against the ongoing pandemic. The E.U. wants to avoid a repeat of what happened in Ukraine several years ago, triggering a military intervention and deadliest conflicts in Europe.

Market Wrap

Main Pairs Movement

GBPUSD is currently trading at 1.3157 as of writing. The pair has been challenged the level at 1.32 during the European trading session. However, the pair is mostly driven by the dollar’s drop. The dollar index has constantly dropped since March 2020. The negotiation of a post- Brexit trade deal with the European Union is also one of the triggers to drive the British Pounds. If the U.K. can soon close an agreement with the E.U., then the British Pounds will be benefited.

USDCAD surges to 1.3215 during the American trading session after FOMC Minutes. At the moment, the Canadian acts as a passive role; the pair is mostly driven by the dollar.  As the Federal Reserve acknowledges costs to yield caps and targets such as the expansion of the Fed balance sheet, the dollar index soars to the positive territory. At the same time, the strength of the dollar is boosted by the U.S. Treasury Bond yield. That being said, the pair is currently in the bullish mode.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD(H4)

The EURUSD pair is currently making a correction for most of the day after the surge yesterday. After the pair tested the resistance at 1.1942, it went into a bearish trend. The MACD turns down during the American session, indicating a selling signal. The pair has broken the upward trend line, which means that the upward trend is bygone. What we can see now is whether there are any external factors to push the pair down or hold the downward pressure.       

 Resistance: 1.1881, 1.1942

Support: 1.1755, 1.1418

USDCAD(H4)

USDCAD rebounds after FOMC Minutes, climbing above 1.3200 level. After the USDCAD pair tested the resistance at 1.3156, it turned into a bullish mode. The uptrend push is strong due to breakout of the 20 SMA in the 4- hour chart. At the same time, the MACD turns up during the U.S. trading session. However, if examining the pair from the big picture, the trend is still bearish and as long as the price is under 1.3235, remaining medium- term bearish.

Resistance: 1.3248, 1.3352, 1.3431

Support: 1.3156

AUDNZD(H4)

The Australian dollar falls against the New Zealand dollar, currently trading at 1.0945. The AUDNZD was mostly in the bullish condition since the 27^th of July, but it entered into the negative territory after the 18^th of August. The falling of the pair is mostly caused by the rising tensions that is seen impacting some of the nation’s exports. Examining the trend via technical analysis, the pair seems to plum right after testing its resistance level at 1.1019, then it continues to fall. Currently, the pair is testing the first support pivot at 1.0935. The RSI indicator suggests that the pair is in neutral, and the pair is firmly trading above the 100 SMA in the 4- hour chart. Therefore, the pair is expected to keep up its bullish momentum after it tests the level at 1.0935 if there are not any external factors.

Resistance: 1.1019

Support: 1.0935, 1.0822, 1.0773

Economic Data

Daily Market Analysis

Market Focus

Major U.S. indexes climb, buoyed by Chinese stimulus overnight, as of writing. The S&P 500 aims at its before the pandemic closing- record; the Nasdaq outperforms as a jump in several technological companies. In the meanwhile, China has decided to roll over medium- term loans and keep borrowing costs constantly for banks, assisting to life Chinese stocks as well as investor’s confidence.

After releasing the CPI last week, the Federal Reserve announces that it will soon reveal a subtle plan in how it will conduct monetary policy for the United States. The Fed has officially embraced a more relaxed perspective on inflation, setting the benchmark rate at 1.5%. At the same time, the Fed also suggests that the expectation of imposing a negative interest rates policy would not be an option in the U.S. The Fed believes that it will essentially undermine the entire premise of U.S. banking systems and U.S. financial markets.

Market Wrap

Main Pairs Movement

The dollar drops about 0.60% on a daily basis against the Aussie as a deadlock in the U.S. stimulus negotiations weighted on the dollar. At the same time, the dollar is undermined by the existence of a further escalation in tensions between the White House and Beijing; besides the recent controversy on WeChat and TikTok, the U.S. Commerce Department also discloses that it adds 38 Huawei facilities to the blacklist, inflaming concerns over a further escalation in U.S.- China relations. With all the downsides, the dollar is under pressure, pushing the AUDUSD pair higher today.

The dollar index drops around 0.20% during American trading session as of writing. The dollar index is falling as investors are uncertain of the currency as a foreign reserve. According to major banks like Bank of America, their recent survey shows that more than 40% of investors expect the amount of the dollar reserves to drop; 30% of them expect the euro to keep up its bullish mom

COVID-19 Data (EOD):

Technical Analysis:

USDCAD(H4)

The USDCAD is trading around 1.3197 as of writing. The USDCAD pair has failed to challenge the 20 SMA in the 4- hour chart from last week, and now is retesting the downtrend line, signaling high bearish pressure. The first resistance level at 1.3247 is seen as the first downside signal. A valid breakthrough suggests a selling signal. The pair is currently heading to test the support level at 1.3177; if it rebounds, it is likely to be a buy signal. Adding up to the rebounding condition, the RSI indicator seems to almost reach the lower bound at 32.63 mark., implying an oversold. As of now, it cannot confirm the future movement of the pair yet.

 Resistance: 1.3247, 1.3351, 1.3414

Support: 1.3177, 1.3090

EURUSD (H4)

The EURUSD pair has been trading in a narrow consolidation zone between 1.1772 and 1.1881 for more than a week. The pair is currently trading along with the 20 SMA and the mean in the Bollinger Band. In the meanwhile, the RSI indicator suggests that the pair is still in neutral at a 61 mark. With recent news and fundamentals, the euro still remains the bulls; however, if the pair wants to breakthrough its first resistance, the momentum must need a dynamic push.

Resistance: 1.2004, 1.1881

Support: 1.1772, 1.1714, 1.1591

USDCHF(H4)

The USDCHF pair is under selling pressure, and it just merely breaks through its crucial support level at 0.9066. A downside breakout suggests a further drop in the upcoming period; currently, the pair is trading its multi- year lows. Moreover, the pair is trading firmly below the 20 SMA while Ichimoku Cloud also suggests that the pair is in the bearish trend in the 4- hour chart. Thus, USDCHF is anticipated to continue its downward trend.

Resistance: 0.9066, 0.9131, 0.9220

Support: 0.8929

Economic Data

Daily Market Analysis

Market Focus

US equity market was mixed as stimulus negotiations linger. The White House and the Treasury is $1 trillion away from reaching a deal, “we have made clear to the administration that we are willing to come down $1 trillion if they will come up $1 trillion. We are willing to resume negotiations once they start to take this process seriously.” House speaker Nancy Pelosi said Wednesday. Meanwhile, Treasury Secretary Steven Mnuchin accused it was Pelosi who refused to compromise, and commented that “Congress could pass a relief plan of ‘a little more than $1 trillion’ and deal with any additional stimulus that’s needed later.”

The United Arab Emirates has confirmed that Israel has agreed on halting its plans to annex Palestinian territories, a potentially historic breakthrough that President Donald Trump said will facilitate peace in the Mideast. “The UAE and Israel agreed to cooperation and setting a roadmap towards establishing a bilateral relationship.” Said Abu Dhabi Crown Price Mohamed Bin Zayed says.

US Jobless Claims fell below 1 million for the first time since this year’s pandemic began, suggesting the US stimulus package is effectively helping to heal its economic wound amid a slowdown in coronavirus infections.

Market Wrap

Main Pairs Movement

Euro and the sterling had an upper hand over US dollar amid signs that faster US inflation is consuming the greenback’s real yield. The lack of interest in the US long-bond auction has caused the spread between the 5-year and 30-year bond yield to rise to the highest level in more than a month. The Treasury sold $26 billion worth of 30-year bonds at a high yield of 1.406% and awarded 20.72% of bids at high. The 10-year Treasury surged to its highest level since mid-June, up 5% as of writing.

Aussie ignores upbeat employment data, declined 0.29% near closing hours. Australians gained 114.7K new jobs position in July, declined from June’s 210.8K, but still came on top of market expectation of 40K. Aussie outperforms Kiwi, AUDNZD climbed 0.3% as RBNZ indicates it would prefer a weaker currency, the antipodeans pair is on a ten-days winning streak.

Gold experienced yet another volatile day, surged 1.97%. The precious metal is gaining traction amid weaker tone surrounding the US Treasury bond yield, and the deadlock stimulus negotiation.

COVID-19 Data (EOD):

Technical Analysis:

USDJPY (Daily)

USDJPY finally made a breakthrough from its medium term descending trendline, though the pair was little changed on Thursday. Price looked pass 106.1 resistance, and is clinging to DMA50 as speculators wait to find trade incentives from Friday’s US Retail Sales or progress in stimulus talks. That being said, the bulls should find acceptence above DMA50 after escaping from the shorter period downtrend highlighted in purple, and try to contest July’s highest point around 107.9. RSI remains netural, while MACD is bullish on the daily chart.

Resistance: 107.9, 109.2, 110.2

Support: 106.1, 104.5, 102.4

USDCAD (H4)

USDCAD was extending its slide, and touched the lowest level since February, closed the day down 0.17%. The previous rebound looks faint and the bears took the chance to plunge price toward 1.3215. MACD is reinforcing the bearish bias, and some follow-through should take price further down to 1.3125. Conversely, any attempted recovery will find stern resistance at 1.3342.

Resistance: 1.3342, 1.3494, 1.3628

Support: 1.3215, 1.3125, 1.3035

EURUSD (Daily)

Euro-dollar pared half of its gain on Thursday, still up 0.25%. The pair could be undergoing a bearish head-and-shoulder pattern on the daily chart as price closed below left shoulder’s high. Traders will be closely watching the formation, if price settled above the head, then it is likely the upward momentum will carry price toward 1.19 horizontal resistance, and possibly 1.2078.

Resistance: 1.192, 1.2078, 1.2203

Support: 1.171, 1.1543, 1.1378

Economic Data

Daily Market Analysis

Market Focus

An American biotechnological company, Moderna Inc. reached an unprecedented deal of $1.5 billion with the Trump administration to supply 100 million does of its experimental vaccine for COVID-19. Under the deal, Moderna Inc. will provide about 100 million does, with the price of around $30.50 per person. In the meantime, the U.S. government also has made agreements with other biotechnological and pharmaceutical companies for potential COVID-19 vaccines, including Johnson and Johnson and Sanofi…etc. With all the potential progress, it essentially elevates the U.S. market.

U.S. stocks and U.S. equities surges in an across the board rally as investors reacts the rebound of gold, the development of vaccines, and Treasury yields retreat to nearly seven- week highs. The S&P 500 gradually approaches the record level prior to when the COVID-19 crashed markets, and the Nasdaq climbs, led by the health care, technology, and utilities sectors.

Market Wrap

Main Pairs Movement

EURUSD has gone into a consolidation phase in the 1.1780 price zone as of writing. The euro seems to be a little stronger than the dollar after the reveal of U.S. consumer price index report surprises on the upside. U.S. consumer price index comes in higher than expected in the month of July, posting 0.6% verse 0.2% expectation. On the euro side, although the Industrial Production data is slightly worse than the expectation, the shared currency capitalized on risk flows and gathered strength against the dollar.

After surging around 30% this year, the precious metal, gold has once fallen below $1900 per ounce level, and continues its bearish momentum for the second- straight day. The huge pullback suggests that a price movement is driven more by short- term trading than a fundamental shift in sentiment. Another main factor to drag gold down is the boosted by global stimulus plans to support countries’ economies. As the global economy is suffering from catastrophes caused by the pandemic, countries are doing their best to save and revive economies.

COVID-19 Data (EOD):

Technical Analysis:

GBPUSD(H4)

GBPUSD extends its decline as of writing. In the 4- hour chart, it shows that a mere bearish mode has contained intraday attempts to advance; at the same time, the pair is currently trading below the 20 SMA. The pair is currently testing its first support level at 1.3029; the bearish momentum will likely accelerate toward 1.2973 level after breaking through its support level. Additionally, MACD indicator advises a selling trend on the doward reversal.

Resistance: 1.3068, 1.3155

Support: 1.3029, 1.2973

USDCHF (H4)

USDCHF remains neutral as consolidation is extending. With its resistance level at 0.9192 intact, several failures to challenge the resistance suggest that a further fall is still expected. However, the pair is expected to remain in a consolidation zone for a while since it is trading on the 20 SMA; in the meanwhile, the RSI indicator at the 45.58 mark shows that the pair is neither overbought nor oversold. Though, if the pair eventually breaks through 0.9107, it will likely confirm short term bottoming toward 0.9065.

Resistance: 0.9192, 0.9220

Support: 0.9107, 0.9065

CADJPY(H4)

CADJPY extends its bullish momentum as of writing. The pair is testing a new 2- month high, 87.90, back in June 2020. In the short- run, the RSI indicator suggests the condition of overbought, reflecting a positive momentum. In the 4- hour chart, trading firmly above the 20 SMA suggests a bullish mode for CADJPY. That being said, CADJPY is looking for an upside recovery, shifting to bullish in the short run.

Resistance: 80.697, 80.937

Support: 80.004, 79.632, 79.114

Economic Data

Daily Market Analysis

Market Focus

President Donald Trump is considering a tax cut on capital gains and American hospitalization for coronavirus fell to their lowest in a month. “We’re considering a capital tax cut, which could create a lot more jobs,” Trump said on the White House news conference. The president has to issue an executive order to bypass the Congress in order to bring the 20% long-term capital gains rate cut. US sets to sell record $112 billion in notes and bonds in this week’s refunding auctions. Heavy corporate debt issuance and a surge in investor risk appetite are sending stocks higher around most of the world.

White House economic adviser Larry Kudlow said China is fulfilling its phase-one trade obligation on commodity prices, and commented the deal is still valid with China. Producers from both sides would be happy to see the trade deal is not compromised by the recent China-US diplomatic tension, which could lift some of the pressure on the Yuan and US dollar.

Russia registered its first coronavirus vaccine, although the registration is conditional and further trials will continue. In the US, severely damaged states such as New York, California and Texas reported falling hospitalizations. Meanwhile, coronavirus infections surpassed 20 million globally.

Market Wrap

Main Pairs Movement

EURUSD failed to capitalize on the upbeat German ZEW Economic Sentiment for August, which soared to 71.5 from previous 59.3. The printed figure far outperformed market expectation of 58, the rally in consumer’s confidence has been boosted by the landmark rescue fund. Money managers are said to be the most optimistic on the outlook for the common currency in almost a decade, the previously agreed 750 billion euros rescue package has lifted concerns over the bloc’s structural risks.

GBPUSD edged marginally lower on Tuesday as BoE deputy governor Dave Ramsden says the central bank is ready to step up QE if economy slows. Ramsden expects UK economy to slowly recover from pandemic’s damage, and commented BoE is fully committed to buy as much as it needs.

Gold’s biggest drop in seven years is triggered by massive profit-taking from huge funds, the precious metal plunged 5.69% ($115) as of writing. The US 10-year Treasury yield jumped the most since June ahead of an expected flood of government and corporate debt issuance, up 11% as of writing.

COVID-19 Data (EOD):

Technical Analysis:

USDCAD (H4)

USDCAD is well kept below the downward sloping trendline, dropped 0.3% near the closing hours. The bears are capping any extension beyond 1.34, but price looks to contest 1.3342 resistance before declining further south. If temporary rebound could find supportive momentum to overcome 1.3342, then bidders may have a chance to break the descending trend and turn the course around. Otherwise, the pair will be eyeing 1.3215, then 1.3133 horizontal support line.

Resistance: 1.3342, 1.3494, 1.3628

Support: 1.3215, 1.3133

EURGBP (Daily)

EURGBP has been rejected by resistance of 0.9042, and traveled south towards the neckline of the double top highlighted in the daily chart. Downward momentum may not be strong enough to create a sharp breakthrough, as seen from the previous hump that buyers and sellers were not committed to take price to either ways. That being said, price could be stuck around the 0.895 support, possibly forming a double bottom followed by the double top.

Resistance: 0.9042, 0.9141, 0.9317

Support: 0.895, 0.8834, 0.87

GOLD (Daily)

Gold relentlessly plunged 5.69%, sending price back to July 27, and closed the day around $1912. Price settled near 23.6% retracement, which is constructed from lowest $1381 to highest 2075 between July 01 2019 to August 07 2020, and could act as potential support. If the precious metal breaches the retracement support line, then it should look to contest the trendline support as highlighted in purple. Conversely, $1976 could be capping any upward surge if the bulls attempt to reclaim its position.

Resistance: 1976, 2075

Support: 1810, 1729

Economic Data