Daily Market Analysis

Market Focus

U.S. market was fluctuating with mixed information. Dow Jones gained as investors considered more earning results and potential outcomes for coronavirus- related stimulus. Despite of failing to make progress on a new coronavirus stimulus plan last week, raising the uncertainty about U.S. economy recovery, investors kept up their hope on the market. Technology shares fell as market participants were uncertain amid tensions between the U.S. and China. Moreover, oil price continues to rise after Saudi Aramco announced that the demand for oil will be improved.

After the Trump administration attempted to ban WeChat and TikTok, the U.S.- China tensions continue to escalate further. At the same time, China has decided to impose sanctions on 11 American citizens and other high- profile officials in response to U.S. behaviors including the executive order from President Trump on the sanction of a Hong Kong chief executive. The U.S. and China relation has intensified to the highest point; it is compelling to examine how global markets react amid tensions.

Market Wrap

Main Pairs Movement

EURUSD drops as the dollar comebacks to the game. EURUSD has dipped below 1.1750 and is back to the consolidation zone thereafter. EUR has been in the bearish momentum after the U.S. JOLTS Job Opening report from today and the Nonfarm Payroll data from last week. Moreover, the dollar is held by the situation of COVID-19 in the U.S.; COVID-19 flareups seem to become moderated recently. Cases in the U.S. is now leaning lower while the pace of new deaths is showing signs of dropping as well. Although the pandemic situation in the U.S. is still worse than that in Europe, but the gap is becoming narrower. That being said, the main driver for the dollar will depend mainly on future stimulus arrangements.

USDJPY is fluctuating in a tight range. The dollar has once strengthened to its highest level at 106.21. The dollar is upheld by a 1.8 million rise on the Nonfarm Payrolls in the U.S., making the dollar preserve its bullish momentum at the start of the week. However, Japanese Yen will likely be featured by Japanese Bank Lending program and trade balance data during early Asian session on Tuesday.

The dollar appreciated 0.6% against the Franz on a daily basis, trading at its highest level in a week at 0.9176 as of writing. The Franz was dragged by the unchanged unemployment rate of 3.3% in July in Switzerland, which was lower than the market expectation of 3.1%. Contrarily, the dollar was boosted and reflected by the Nonfarm Payrolls and the JOLTS Job Openings data in July. With all those conditions, it is difficult for the Swiss Franz to stay strong against the dollar.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (H4)

EURUSD is currently trading at 1.1742 during the U.S. session as of writing. The pair has failed to challenge its resistance level at 1.1802, then it retains its bearish stance after-ward. EURUSD continues to maintain in the negative territory since the RSI is currently only at 38 mark in the 4- hour chart. In the meantime, the pair is trading firmly below the 20 SMA. Now, the pair is testing its support level at 1.1742; if it successfully breaks through, it will likely continue to decline.

Resistance: 1.1802, 1.1847, 1.1900

Support: 1.1776, 1.1742, 1.1720

USDJPY(H4)

USDJPY is currently trading at 105.94 during the U.S. session. The pair seems to be neutral and in a consolidation area for nearly a week in the 4- hour chart. Moreover, the pair holds just above the midlines, but lack of strength to challenge its resistance level at 106.18. It is expected to see the pair to keep up its neutral tendency from the perspective of the RSI indicator, currently holding at 58 mark.

Resistance: 105.06, 105.53

Support: 106.18

USDCHF (H4)

USDCHF is currently trading at 0.9157 during the U.S. session, and it once reached its highest level at 0.9178, the resistance level; afterward, the pair goes into a consolidation zone. Both indicators and fundamentals suggest that the dollar is rising against the Swiss Franz. The RSI indicator is currently at 56 mark, which implies that the pair has not reached the position of overbought yet. In the meantime, the pair is firmly trading above the 20 SMA in the 4- hour chart.

Resistance: 0.9218, 0.9386

Support: 0.9066

Economic Data

Daily Market Analysis

Market Focus

US equity market struggles as investors doubt officials will reach a deal on the newly proposed stimulus package. Negotiations between White House and Congress are said to be on the brink of collapse after Thursday’s meeting.

Following the ‘clean network’ initiative promoted by US government, President Donald Trump moved to ban the Chinese-owned TikTok and WeChat that will be effective 45 days from now. The surprised announcement sent shockwaves through the tech industry as many American companies who rely on the communication app to conduct businesses with China. China officially reacted with caution on Friday and accused US “is using national security as an excuse and using state power to oppress non-American business.”

US Non-Farm Payroll increased by 1.76 million in July, surpassing expected 1.48 million, but a tremendous decline from June’s 4.79 million. The economic data showed the recovery is lingering amid the pandemic.

Market Wrap

Main Pairs Movement

Gold pared some of its weekly gain, but still closed the week up 2.28%. Bullion went as high as $2075 during Friday’s early session, then bulls took a slap in the face and slumped to $2015 after Non-Farm Payroll figure came on top of market expectation. Heavily loaded long position that was built up since mid-July is attributed to the accelerated pull-back as bidders cheer up their handsome profit moving into the weekend.

The US dollar index jumped to 93.48, NFP data was lending support to the greenback. On the downside, Trump is doing all he can to fight with China, bolstering his core support ahead of US election, but his move to ban WeChat and TikTok may backfires and threatened to put ties with China in greater risk. The dollar initially benefited from haven status early in the coronavirus outbreak but the swiss franc has taken that role lately, USDCHF slumped nearly 6% since June.

USDCAD was the biggest winner among its G-10 peers, up 0.63% on Friday. Canada is targeting C$3.6 retaliatory tariffs, that includes variety of 60 products, in response to President Donald Trump’s new aluminum duty against Canada. Lonnie was previously riding on the backdrop of stabilizing oil price.

COVID-19 Data (EOD):

Technical Analysis:

GBPJPY (Daily)

BPJPY once dropped to the support region highlighted in blue, but price managed to stay above previous lows. The stubborn horizontal resistance of 139.08 has been keeping the bulls from advancing forward in the last six sessions. Nonetheless, long term trendline still favors the bulls, and there is no sight of contestants unless the aforementioned supportive area is breached. Conversely, the bulls will meet its first resistance at 141.3 after 139.08 is defeated.

Resistance: 139.08, 141.26, 144.65

Support: 135.4, 130.8, 127.16

USDJPY (H4)

USDJPY recovered to sub-106 level, daily gained nearly 0.4%.  The pair dipped to 105.3 horizontal support twice within this week’s trading session, but SMA50 on the four-hour chart helped to defend sellers’ attack. The short-term surge is bumping into the dynamic resistance of SMA100, which has been rejecting any upward moves in the past three weeks. The bulls are far from reach since it has to conquer SMA100, resistance of 106.4, and the medium-term descending trendline to gain any meaningful momentums.

Resistance: 106.4, 106.75, 107.4

Support: 105.6, 105.1, 104.6

NZDUSD (H4)

The kiwi erased all its gains from last three days, plunged 1.4% on Friday. The ascending trendline on the four-hour chart has turned into a resistance. Price has hit 0.669 before dropping, which created a lower high, however, the south run was stopped by 0.659 near the closing hours. If it breaches below horizontal support of 0.659, then the risky currency could be constructing a descending tunnel from there. MACD also favors the bears.

Resistance: 0.67, 0.6785, 0.6875

Support: 0.659, 0.652, 0.6447

Daily Market Analysis

Market Focus

US and European equity edged higher amid encouraging news on the vaccine front. Novavax joins the ranks of AstraZeneca Plc, Moderna Inc., Pfizer Inc. and BioNTech SE which has all reported Phase 1 results for the COVID-19 vaccine. The S&P 500 Index headed for a fourth consecutive rise.

The White House and the Congress are working towards a deal by the end of this week on another stimulus package. Uncertainty over the size and pace of government spending has made it tough to predict the outlook over the coming months. Meanwhile, US Treasury department expanded its plans for borrowing at longer maturities in the coming months, and will sell a record $112 billion of securities at next week’s so-called quarterly refunding of maturing Treasuries.

ISM Non-Manufacturing PMI in July rose to 57.1 from June’s 57.1, beating market expectation of 55. On the other hand, ADP Payroll slowed sharply in July, printed 167K compared to previous 4,314 K. The diminishing gains in payrolls is consistent with other economic data that shows the labor market is hitting bottleneck after rebounds in the months of reopening.

Market Wrap

Main Pairs Movement

        Gold continues to make historical highs, soared as high as $2055 during US session. Bullion is up almost 35% this year, while the US 10-year treasury yield plunged 71%. Increasing geopolitical tension and depreciating US dollar is setting the stage for Gold to ramp up higher. US and Chinese officials plan to assess the trade accord, namely the phase-one deal, around Aug 15. President Donald Trump has said repeatedly in recent weeks that the deal is not as important to him as before due to China’s fault on spreading the virus.

The dollar index offered bias is extending on Wednesday, pricing around 92.9 as of writing. Previous bounce appears to exhaust ahead of 94, investors are keeping the bearish stance on the buck amid US-China jitters, spread of pandemic, and a very dovish Fed.

COVID-19 Data (EOD):

Technical Analysis:

GBPUSD (Daily)

Cable gained 0.28% on Wednesday after traded in an indecisive manner seen from the last 3 Doji candles in the daily chart. Price once dipped to 1.2984 support, then quickly bounced back in yesterday’s session. That being said, bidders’ strength is outweighing sellers, and upward momentum should be carrying price towards 100% Fibonacci at 1.32. Then, we should wait to see whether speculators are willing to exit their long or push it further to the yearly high at 1.3342.

Resistance: 1.32, 1.3342, 1.3623

Support: 1.2984, 1.2778, 1.2623

USDCHF (Weekly)

USDCHF is still struggling with May 2015 lowest point around 0.9084. Price once dipped to 0.905 handle, and the downtick was exclusively sponsored by the heavily offered tone surround the US dollar. Intraday trading was dominated by sellers, and the bears look to extend their hand into sub-0.905 territory. RSI slipped beneath 30, and MACD indicates more selling is yet to come.

Resistance: 0.9275, 0.9537, 0.9737

Support: 0.905, 0.8909, 0.87

AUDUSD(H4)

Aussie is still within the decent ascending tunnel, gained 0.44% on Wednesday. The run-up has made its trip beyond 0.72 handle, and bulls remain optimistic. ADP Non-farm did little to hamper the bullish mood, and positive pharmaceutical news keeps the risky currency underpinned. RSI retreated back to neutral zone, and MACD turns bullish on the four-hour chart.

Resistance: 0.7272, 0.736, 0.7457

Support: 0.7121, 0.702, 0.6967

Economic Data

Daily Market Analysis

Market Focus

US equity advanced as positive economic data outweighed pandemic pessimism. The White House is concerned about the economic impact of the benefits having expired on Friday, and was said to consider acting on its own to boost unemployment benefits, however it wasn’t immediately clear how Trump administration may be able to act without approval from lawmakers. Nasdaq 100 reached a new record as Apple Inc. and Microsoft Corp. was lifted.

The flareups between China and US continues as Trump administration “will announce measures against “a broad array” of Chinese-owned software deemed to post national security risks,” Secretary of State Michael Pompeo said. President Donald Trump told reporters Friday that he plans to ban TikTok from the US, but his decision has not been announced. Meanwhile, Microsoft tries to salvage deal to buy TikTok as the tech giant will continue to engage Trump and the US government.

US ISM Manufacturing PMI kicked off the week loaded with critical economic releases ahead. The economic activity in the US manufacturing sector expanded at a strong pace in July, the purchasing manager index improved from 52.6 to 54.2, beating market expectation of 53.6

Market Wrap

Main Pairs Movement

The dollar index strongly rebounded last Friday, and the momentum resumed on Monday. Risk assets have been overbought, and heavily weighed on the dollar in July, traders are probably reversing some of that position as market moves into the traditionally volatile month in August.

Gold rose and fell in early week trading session. The previous metal only made marginal new high in the last few sessions, it is looking to consolidate its gain as short-term bidder exits their position.

Oil edged below $40 as OPEC+ producers started unwinding output cuts. The organization and its allies will increase production about 1.5 million barrels a day in August. The increase in supply comes as coronavirus cases accelerated worldwide, Marathon Petroleum Corp., the largest American independent oil refiner, said it will hold the current output as demand for fuels is unlikely to hit pre-pandemic levels this year.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (H4)

Euro-dollar has retreated further south as the US dollar recovered some of its loss, the pair slipped 0.17% as of writing. After peaking to 1.19, price pulled back and constructed a decent head-and-shoulder, which may suggest bearish reversal is on its way, or at least the correction will be deeper. Otherwise, if 1.1793 resistance (the high point of the left shoulder) is beaten, then the head-and-shoulder pattern is broken, and bulls should take back control thereafter. MACD on the four-hour chart favors the bears.

Resistance: 1.1793, 1.1896, 1.1996

Support: 1.1712, 1.1651, 1.1601

GBPJPY (Daily)

The symmetrical triangle formed on the GBPJPY daily chart has been broken to the upside, and the pair is on the sixth consecutive win. Short-term bulls are meeting solid resistance around 139.1, and bullish momentum will be boosted if this level is conquered. Technical indicators on the daily chart is mixed, where RSI stood above 70 indicatives of an overheated price, but SMA200 and MACD are supportive to the bulls.

Resistance: 139.1, 144.653, 148.27

Support: 135.259, 130.614, 125.388

USDJPY (Daily)

        USDJPY rebounded on Monday as March’s horizontal support at 104.54 held off sellers’ attack, gained 0.2% intraday.  However, the greenback is not out of the woods yet, and the pair remains depressed by the purple descending trendline. In order to gain useful momentum, the bulls will have to overcome 106.09, as it is struggling with right now, then stand above the aforementioned trendline. RSI is pulled back from oversold region towards the midpoint of 50. Bearish bars from MACD is shrinking on the daily chart.

Resistance: 106.09, 107.93, 109.22

Support: 104.54, 102.36

Economic Data

Daily Market Analysis

Market Focus

U.S. market continues to fall amid the concern of a resurgence of COVID-19 and a selloff in giant oil businesses. Energy shares, such as Exxon and Chevron, lead declines in the S&P500. Along with recent poor fundamentals, U.S. economic rebound might make it tougher for equities to gain further momentum. Risk sentiments continue to take place while the greenback continues to behave weaker. Nonetheless, there is good news, which the U.S. Senate just passes the House’s HERO Act, which can potentially be view as a temporary savior for American economy.

The British government announces to tighten its lockdown policy again across a large part of northern England. In the meanwhile, France and Spain also consider locking- down their regions. If the lockdown policy is imposed, it will essentially lead the euro- area into another economic shrinkage. Meanwhile in Asia, Tokyo also announces that a tighter restriction is considered to be necessary if coronavirus situation worsens. To sum up, global economy might confront another economy contraction while waiting for a coronavirus vaccine.

Market Wrap

Main Pairs Movement

        The dollar Index sinks below 93.00 since 2010. The dollar continues to stay under pressure in the ongoing scenarios of the unabated COVID-19, weak fundamentals, and low U.S. yield. The dollar against its main peers is down about 4.5% in July, which is the worst in a decade. The greenback, one of the most reservable currencies, is dragged down by the election issue raised by President Trump, and the disappointment over America’s response to COVID-19.

EURUSD erased the day’s gains; however, the euro still stayed on track for its best month since early 2010. EURUSD dropped about 0.51% at 1.1790 as of writing under the onset of dismal economic reports from Europe. Although the dollar extended its declines, the euro still gave up its gain due to the potential economic contraction in the eurozone.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (H4)

        Despite of declining around 0.50% in a daily basis, GBPUSD in general is still in an upward momentum. The RSI indicator on the 4- hour chart shows that EURUSD is in an extreme overbought condition at the level of 82%. Currently, two support pivots await at 1.2966 and 1.2748. EURUSD should be expected to carry its monthly bullish momentum as the pair is firmly trading above the 20 SMA in the four- hour chart.

Resistance: 1.3159

Support: 1.2966, 1.2880, 1.2748

AUDUSD(H4)

        AUDUSD finished its fifth straight day in the positive territory. On the 31^st of July, USD bounded back as the U.S. Senate approved the stimulus plan and the Fed promised to help the domestic economy. AUDUSD retreated back to the zone of correction. The pair currently traded closely on the 20 SMA with a strong support level at 0.7153, followed by 0.7135 and 0.7081. Since the pair is currently in the stage of correction, this coming week will be crucial for the pair to determine its direction.

Resistance: 0.7220

Support: 0.7153, 0.7135, 0.7081

USDJPY (H4)

        USDJPY gained traction during American trading session. After 5 days of depreciation, the pair was up around 0.4% on a daily basis at 105.13, which was the highest since last week. USDJPY has high possibility to retreat due to the breakthrough of the 20 SMA in the 4- hour chart. Current resistance level at 104.32 seems to be weak because the pair only test it once. On the other hand, the second resistance level at 105.06 is a strong pivot for the pair due to previous consolidation.

Resistance: 105.06, 104.32

Support: 105.59, 106.77

Economic Data

Daily Market Analysis

Market Focus

President Donald Trump floated the idea of delaying this year’s US election on Thursday, suggesting “with the Universal Main-In Voting (not Absentee Voting, which is good), 2020 will be the most INACCURATE & FRADULENT Election in history.” Meanwhile, we witnessed what the pandemic could do to US economy, US second-quarter GDP shrank 9% from the first, that is equivalent to an annualized declined of 32.9%. This is the worst figure printed in all time, surpassing the annualized quarterly decline in 1947.

German GDP arrives at -10.1%, worse than expected -9%, and is down from previous -2%. However, German unemployment change did come out on top of expectation, printed -18K compared to 43K, and is up from last month’s 68K.

Main takeaways from July FOMC statement:

• Fed is committed to using its full range of tools to support growth amid the “tremendous” hardship from the virus.
• Recent economic data have gotten worse, the outlook is highly uncertain.
• Fed will wrap up its review of monetary policy strategy, tools and communication in the near future.
• Powell calls on fiscal policy makers to provide additional support and says he welcomes Congress working this week toward more aid.

Market Wrap

Main Pairs Movement

The dollar index has fell to the lowest point since May 2018 after President Donald Trump brought up the idea about postponing November’s US election. The dollar strength tracking index has recorded a six-consecutive week decline, totaling to a decline of 4.6% since mid-June. A mixture of worsening pandemic, China-US geopolitical tension, Fed’s pessimistic stance, and US election uncertainty are attributed to the drop.

        British Pound carries on with its rampage, gaining 0.76% against US dollar as of writing. The disappointing GDP figure has hampered the greenback further south, and provide bidding incentive for other currencies such as the Euro and Sterling. On the other hand, UK and Japan are close to a trade deal that would partially replace the free-trade agreement with European Union.

COVID-19 Data (EOD):

Technical Analysis:

GBPUSD (Daily)

Cable were committed to overcome 1.3 hurdle on Thursday’s session. Upward momentum is still intact despite RSI soared to 80.7, stepped deeply into the overbought region. We might see slight pull back around 1.312 before sterling continue to advance to 100% Fibonacci at 1.32 handle in the daily chart. If price retreats from 1.312, we expect 1.298 to act a reliable support.

Resistance: 1.320, 1.3342, 1.3623

Support: 1.2984, 1.2778, 1.2623

USDCHF (Weekly)

USDCHF is sitting on top of its five-year low price, around 0.9084. The safe-haven Swiss Franc further benefitted from a selloff in the US equity market, RSI suggests the pair is oversold. The back-to-back solid bearish marubozu candle indicates that bear could open the door to prices not seen since the Swiss Franc black swan event. If the bearish breakout does happen, the first support the bear encounters will be around 0.8909, followed by 0.8699.

Resistance: 0.9275, 0.9537, 0.9737

Support: 0.9084, 0.8909, 0.8699

USDCAD (H4)

USDCAD is heading toward 1.3494, where the bears were rejected three times, and is currently turning into a stern resistance. MACD shows bullish signal on the four-hour chart, however the big trend still favors the bear as price is well beneath the two major downward trend lines in the short and medium term. To the downside, price has to break the 1.3377-1.332 support region before it could meet further support at 1.3215.

Resistance: 1.3494, 1.3628, 1.3739

Support: 1.3377-1.332, 1.3215, 1.3133

Economic Data

Daily Market Analysis

Market Focus

Fed Chairman Jerome Powell signifies that the Federal Reserve will do whatever it can to help the U.S. economy and its labor market. The U.S. stocks climb on speculation as investors are looking for a potential rebound through a batch of corporate earnings and the economic stimulus from the Fed. In the meanwhile, the Fed is promising to extend its lending governments, businesses, and individuals until early 2021; especially, the Fed starts injecting a considerable sum of money in pharmaceutical companies to help produce ingredients to fight against COVID-19.

European stocks fluctuate throughout the session as investors are digesting a flood of earning reports from major banks and at the same time waiting for the result of a Fed meeting. For the market recaps, European markets are optimism about a new U.S. stimulus plan, the rising hopes of a potential vaccine, and decisions from the Fed.

Aussie market is in the rapid revival stage with a 32% ascend since March; however, the Australian share market edged slightly lower today due to waiting for an important meeting of the U.S. Fed. On the other side, Australia slipped into the stage of deflation, which giving the government the opportunity to intervene some service charge. In the short- term, Australia might be beneficial from deflation; however, in the long- term, Australia might face higher rates of unemployment and debt obligations.

Market Wrap

Main Pairs Movement

        Gold is in the gaining position, trading at 1962.75 as of writing, for a nine straight- day period amid the global pandemic crisis. As the dollar continues to stay fragile, gold continues to surge to an all-time high; gold is winning over a wider fan base of pension funds, private wealth specialists, and insurance companies. Major banks have already forecasted a rally to $2,300 while the yield on U.S. treasuries is record low. Investors start transferring their risk sentiments to the traditional safe- haven commodity, gold.

British Pound continues to appreciate against the dollar after the release of the initial outcome from the U.S. Federal Reserve. As the Fed rate remains unchanged, GBPUSD’s bullish momentum carries on dollar weakness, currently testing the 1.3006 level. Nonetheless, the pound is in an unclear stage due to the uncertainty surrounding Brexit. It is expected to see the dollar falls further tomorrow as the GDP(Q2) for the U.S. is going to release.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (H4)

EURUSD is in a steady and stable upward trend as the dollar continues to be in a bearish momentum after the U.S. Fed meeting. The Euro is underpinned by the impetus of safe- haven seeking and USD sell- off. EURUSD is now challenging its resistance level at 1.1805, with a strong supporting pivot at 1.1719 and 1.1596. As of now, EURUSD is still securely trading above and beating its 100 SMA.

Resistance: 1.1805

Support: 1.1752, 1.1719

AUDUSD (H4)

AUDUSD is in a bullish momentum, now testing 0.7182 after the announcement from the Fed. The Australian dollar is upheld by the safe- haven sentiment as the Dollar Index continues to drop and get weaker. AUDUSD is now testing its resistance level at 0.7182 with the firm supports pivots at 0.7122 and 0.7092. If it eventually breaks through, AUD is expected to have blue skies in the 0.73 area, backed by Australia’s historically large trade and Chinese’s industry- driven economic rebound. AUDUSD is anticipated to carry on its bullish momentum as the pair is firmly trading above the 20 SMA in the four- hour chart as of writing.

Resistance: 0.7182

Support: 0.6996, 0.7092, 0.7122, 0.7151

USDJPY (H4)

Japanese Yen has reached its 4- month low at 104.84 against the dollar as of writing. The 20 SMA in the 4- hour chart maintains its bearish trend above the current level. The Yen is underpinned by its two strong support levels, 105.59 and 105.04. If the dollar remains the weakest after the announcement from the Fed, the pair is expected to break through its current resistance level, 104.89.

Resistance: 104.89

Support: 105.04, 105.35, 105.59, 106.74

Economic Data

Daily Market Analysis

Market Focus

The Fed extended most of its emergency lending programs by three months, to help revive the desperate economy. Since mid-March, the Federal Reserve has opened nine emergency programs aimed at injecting liquidity into short-term credit markets and extending credit to businesses and local governments. The facilities have the potential to deploy trillions of dollars, but so far have only about $100 billion in loans outstanding.

Swiss Franc reached its strongest since June 2015 as investor sought havens ahead of Wednesday’s Fed interest rate decision, the rate is widely expected to remain unchanged, thus the focus shifts to Fed’s stance on current monetary policy and how much more liquidity they are willing to give out.

The European Union decided to keep its external borders closed to travelers from most countries including U.S. for at least two more weeks amid surging number in coronavirus cases. The resurgence in COVID-19 cases worldwide is hampering European efforts to pull its economy out of sliding recession.

Market Wrap

Main Pairs Movement

        Dollar index was taking a breath from heavy selling pressure, it recovered 0.12% on Tuesday. However, the pound is still charging into the greenback, recorded a eighth straight win, closed the day up 0.53%. The risky currency is lifted to four months high by the current risk-on mood in the financial market and dollar weakness. Gold surged nearly $40 in early Asian session and briefly touched $1982, but the precious metal quickly plunged back to $1907 probably due to enormous profit-taking orders. Nonetheless, it still closed the day up $16, settled around $1958.

The Kiwi was left behind by its peer Aussie, dropped 0.26% and up 0.16% respectively. The fact that New Zealand suspended its extradition agreement with Hong Kong could damage ties between the two countries, which could draw potentially retaliation from China. NZDUSD is drove down as speculators generally want to pull their money out before things turn ugly.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (Monthy)

EURUSD slipped 0.29% on Tuesday, but is still on its way towards 1.1815, where the 12-year descending trendline intersects with horizontal resistance line on the monthly chart.
If price could penetrate this pivotal resistance, then bulls have chance to take back the driver seat after a long wait.

Resistance: 1.1818, 1.2238, 1.2803

Support: 1.145, 1.0517

USDCHF (Weekly)

USDCHF dropped 0.22%, and is currently hovering above its five-year low, settled around 0.9179. The Swiss Franc is underpinned by USD sell-off and safe-haven seeking. RSI is one step from entering the oversold region, printed 30.8 as of writing, and MACD is keeping its downside bias on the weekly chart. Bears look to test 0.9084 support in the near term, which we might see some rebound from there.

Resistance: 0.9275, 0.9537, 0.9737

Support: 0.9084, 0.8909, 0.8699

GBPUSD (Daily)

Cable’s bullish momentum has managed to conquer 76.4% Fibonacci, and is heading toward the intermediate resistance at 1.3 handle. If the pound takes out this important resistance, price could accelerate toward yearly high of 1.32, which will be tough to crack. To the downside, horizontal support lies around 1.2778, followed by 1.2623-1.2526 region, then to 1.2306.

Resistance: 1.2984, 1.3201

Support: 1.2778, 1.2623-1.2526, 1.2306

Economic Data

Daily Market Analysis

Market Focus

U.S. stocks rebounded today as investors disregarded increasing coronavirus cases and the tensions between the U.S. and China. In the meanwhile, as the unveil of having another batch of stimulus check in the U.S., investors betted on their hope on more stimulus to revive a battered domestic economy ahead. Nonetheless, as the fight against coronavirus continues, the Fed Chairman Jerome Powell signaled that the rate might be going to stay near zero for longer, resulting in a weaker dollar.

The European Union’s Brexit negotiator expressed confidence at the possibility of a new deal with the U.K. The two major stumbling blocks are the state aid, environmental standard, labors standards, and British fishing waters. The EU anticipates the deal to be done by October and ratified by the end of the year. If Brexit can be finalized soon, it will definitely be a good news for both sides.

After the U.S. ordered to close down the Chinese consulate in Houston, in retaliation China shutdown the U.S.’s consulate in Chengdu, China. This incident is one of the worst tensions between the U.S. and China since 1979. Amid the rising tensions between the world’s two biggest economies countries, investors start turning their risk sentiments into gold, pushing gold price to a next level.

Market Wrap

Main Pairs Movement

        XAU/USD surged to an all- time record at $1945.26 as of writing on Monday. Global investors concern about worsening US- China relations, forcing them to take refuge in the traditional safe- haven, gold. In the meanwhile, as the Fed continues to print the currency, such as the stimulus check, it will continue to hurt against the value of the dollar; the U.S. Dollar Index has fallen to 93.64 since 2019, which eventually provides a strong boost to the precious metal, gold.

Japanese Yen advances to its highest level since March as the rising tensions between the U.S. and China. USD/JPY falls 0.9% to 105.17 under the bearish pressure. The demand for the safe- haven, Yen is rising due to investors are looking for an alternative risk sentiment. USD/JPY can be expected to continuously fall after the U.S.’s stimulus check, putting a pressure on the greenback.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (H4)

EURUSD is trading at 1.1745 as of writing. The RSI indicator in the four- hour chart suggests that EURUSD is overbought at the level of 76%; however, despite of overbuying, it seems to have no signs of upward exhaustion according to a solid trend above the 20 SMA. The first support sits at 1.1595, followed by 1.1541. If the dollar continues to decline as the US- China tensions continue to escalate, it is not surprised to see EURUSD to climb above 1.1762.

Resistance: 1.1762

Support: 1.1438, 1.1541, 1.1595

XAUUSD (H4)

Gold continues to surge and breaks its all- time record at 1945.26 as of writing. Although the RSI indicator in the four- hour chart indicates that XAUUSD is in the condition of overbought at the level of 86%, it seems to have no signs of downward trends. Meanwhile in the Bollinger Bands indicator and the 20 SMA, gold is firmly trading above the mean and the 20 SMA, showing the signs of continuous uptrends. The first support sits at 1931.73, followed by 1915.23 and 1895.86. If investors’ risk sentiment deteriorates, it will cause a higher volatility in gold, which will likely continue to break its all- time record.

Resistance: 1946.79

Support: 1895.86, 1915.23, 1931.73

USDJPY (H4)

USDJPY continues to retain a bearish mode as the greenback is tanking. Although the RSI indicator in the four- hours chart indicates that USDJPY is oversold at the level of 19%, trading strongly below the Bollinger Bands and the 20 SMA reject USDJPY to rebound. The support level at 106.8 seems to be a strong pivot for the pair due to severally consolidated tests. It is likely to see the pair to break its first resistance level at 105.09 if the risk sentiment starts taking place.

Resistance: 105.09, 104.85

Support: 106.12, 106.80

Economic Data

Market Focus

Diplomatic tension continued to escalate between China and US, where Beijing ordered the US to shut a consulate in Chengdu in an eye-for-an-eye retaliation. The Chinese Ministry of Foreign Affairs said Friday that the consulate’s closure was a “legitimate and necessary response to the unjustified act by the US.” US equity market suffered from the deteriorating investors’ confidence.

Australia will inject another A$20 billion monetary stimulus to help job market as Central Bank president Philip Lowe warned of lingering economic recovery amid the COVID-19 pandemic. The current wage subsidy program will be extended by six months until the end of March 2021.

UK Retail Sales jumped by 13.9% in June, the figure came on top of estimated 8%. The upbeat consumption is attributed to the gradual reopening of the economy. Meanwhile, the latest round of negotiations on Brexit ended on Thursday without any significant progress on the post-Brexit trade deal. UK’s chief negotiator David Frost said that they will not be able to strike a deal with the EU by July deadline.

Market Wrap

Main Pairs Movement

Gold topped $1900 an ounce for the first time since 2011 as China-US geopolitical tension underpins safe-haven assets. A weaker dollar and expectations of rising inflation amid massive liquidity injections from central banks around the world also help the yellow metal to gain intense traction lately. Other risk hedging currencies, such as Swiss Franc and Japanese Yen were also surging against US dollar. The dollar index dropped to the lowest level since September 2018, settled around 94.35 as of writing.

Aussie and Kiwi, which act as proxy for China, were put on the back foot against the greenback. Both traded slightly toward the downside, the clash between China and US carries on and prompts fresh risk-off sales of the risky currencies.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (D1)

Euro-dollar is on a six-consecutive days rampage, totalling to a gain of 2.21%. The furious roar has breached mutiple resistance lines, and bulls are taking price toward the ceiling of the highlighted trend tunnel in the daily chart. RSI is reaching 78 as of writing, which indicates the pair is overheated, any further ramp ups could be tempting for bidder to exit their current long positions.

Resistance: 1.1543, 1.1452, 1.131

Support: 1.171, 1.1816, 1.1920

USDJPY (D1)

USDJPY dropped to its lowest level since March on Friday, settled slightly above 106. A break below from 106 could open the door to wide support range, where the first significant support sits around 104.54, followed by 102.4. MACD has been wandering in sallow region due to the sideway trading since mid-June.

Resistance: 107.93, 109.22, 110.16

Support: 104.54, 102.36

USDCHF (Weekly)

Price slipped through 0.9275 key resistance on the weekly chart. The bearish Marubozu candle points to a firm descending trend, and the pair seems very vulnerable to 0.92 handle. RSI hovers around 32, and the last time that USDCHF entered oversold region was dated back in August 2011, thus it would be interesting to see bidders’ reaction as it gets closer to 30. If bidders fail to defend 0.92, Swiss Franc could attack the five-year old horizontal support at 0.9084.

Resistance: 0.9275, 0.9537, 0.9737

Support: 0.92, 0.9084, 0.8909