Daily Market Analysis

Market Focus

U.S. stocks are push higher after the Congress is negotiating a new stimulus plan, and most importantly European Union leaders have agreed to support the virus- damaged regions. Along with the financial supports, the U.S. market is added to its highest since February 2020, with positive vaccine news. Several major companies’, including Microsoft, Blackstone, and Intel, quarterly earnings reports are due soon, and the U.S. jobless claims report is set to release this week; the information will play an important role to drive the U.S. market.

European Union has finalized an unprecedented $858 billion recovery fund in order to rebuild EU economies. As EU agrees on the huge recovery package, European stocks and major Indexes surge significantly. Along with the recovery plan, the positive news on Covid-19 vaccine have boosted investors confidence. European markets rise in reaction; especially, Germany’s DAX index is up 1.7% and European equities have outperformed the rest of the global market.

After UK suspended Hong Kong extradition deal, China implies that it will fight back as an accusation, interfering in Chinese internal affairs. In responding to Chinese accusation, UK and US are in the discussion of forming a coalition to resist China. Besides the tension between UK and China, the positive news on a coronavirus vaccine developed by the University of Oxford have boosted the hope on dealing with Covid-19; the findings are promising, but it is still too soon to say.

Market Wrap

Main Pairs Movement

The dollar is confronting the threat as EU recovery plan is determined. The safe-haven greenback continues to struggle as it is facing the questions about its status of being a primary reserve currency. In the meanwhile, the US dollar index is under downward pressure among the risk complex, testing the yearly low near 94.60.

The euro climbs to its highest against other currencies after EU finalizes an agreement on an unprecedent stimulus plan. An upturn momentum in sentiment following the stimulus plan and positive news on Covid-19 vaccine boosts up the euro dollar and European markets.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (H4)

The EUR/USD is traded as high as 1.1540 during the U.S. session. The RSI indicator in 4 hours chart shows that the pair seems to be overbought, but it is still push up by the strong upward momentum of the euro dollar. The pair has broken its first resistance at 1.15, and now it is aiming to break its second resistance at 1.1570. The pair seems to hold strong above the support level at 1.1421 since it has tested the support three times. As a risk sentiment currency, the euro should benefit from future positive vaccine news.

Resistance: 1.1531, 1.1570, 1.1608

Support: 1.1368, 1.1421, 1.1457

GBPUSD (H4)

The GBP/USD is traded as high as 1.2768 as of writing during the U.S. session. In 4-hours chart, the pair seems to be in a bullish mode as the pair continues to surge above the 20 SMA. The RSI indicator indicates that even though the pair seems to be overbought, it consolidates around 69.8502. The support at 1.2604 acts as a strong area since the pair has tested the area 4 times in July. The pair is currently reaching its resistance at 1.2744; it should be able to break its first resistance and examines its second resistance level at 1.2787 in the future as the news came after the coalition between the U.S. and UK against Chinese threat.

Resistance: 1.2744, 1.2787, 1.2851

Support: 1.2545, 1.2604, 1.2653

XAUUSD (H4)

XAU/USD surges to nine- year high level at 1843.47 on Tuesday. As the safe- haven greenback is weak, XAU/USD is boosted. The support level at 1796.30 acts as a strong level since XAU/USD has tested the level 3 times. As new wave of virus infections and raises global concern, gold seems to remain strong. Currently, gold just surpasses its first resistance level at 1840.04, now heading to its second resistance level at 1850.76. Bullish gold seems to have no obstacles en- route to $1850.76 if the situation of the pandemics does not improve.

Resistance: 1840.04, 1850.76

Support: 1796.30, 1815.17

Economic Data

Daily Market Analysis

Market Focus

US stocks advanced to the highest since February as investors were confidence on potential virus vaccine development. On the other hand, former Fed Chairs Yellen and Bernanke were not so optimistic on US economy and commented “the unknown depth and duration of the recession means downside risks are building.” Bankruptcies are among those risks, and they may be just getting started. Meanwhile, talks on the new stimulus package will start at the White House today between Senate Majority Leader Mitch McConnell, Treasury Secretary Steven Mnuchin, and others.

The European Union moved closer to a deal on a massive 750 billion euros economic stimulus package after four holdouts indicated they were ready to compromise on a key provision. The Frugal Four (Netherland, Austria, Demand and Sweden) were satisfied with 390 billion euros grant, and the rest 360 billion euros come as low-interest loans. The EU leaders are due to meet again today to discuss the overall size of the fund and the mechanisms for controlling its spending.

.

UK Foreign Secretary Dominic Raab signaled possible suspension of its extradition treaty with Hong Kong. The move would mark a further diplomatic escalation after UK sanctioned Huawei. China’s ambassador to London has threatened the UK with retaliation and accused it of bowing to US pressure by banning Huawei, and commented “I think the UK should have its own independent foreign policy rather than dance to the tune of the Americans.”

Market Wrap

The safe-haven greenback continued to struggle to find demand against its riskier counterpart, the US Dollar index was down 0.19% as of writing, the first time in four months the dollar tracking index settled below 96. Various drug makers around the world were spurring up equity market, whereas US drug companies such as Pfizer and AstraZeneca have been producing positive results in the early trials of their coronavirus vaccines.

Sterling surged against US dollar as Synairgen, a British drug company, reported yet another positive results for the coronavirus. While a full examination of its treatment is still awaited, the announcement already prompted Cable to raise 0.79% as of writing. The pair seemed to shrug off escalating geopolitical tension between UK and China, nonetheless, the looming issue will come back to haunt Cable eventually.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (H4)

Euro has the upper hand over US dollar and managed to establish a higher high on the four-hour chart. It is now reaching a critical point as the ascending symmetrical triangle is narrowing price into the corner. If sellers successfully defend the yearly high of 1.147, price will likely fall back to the green support region, which ranges from 1.1389 to 1.1369. Conversely, if bulls are bold enough to conquer 1.147 in the short term, next big aim would be 1.544.

Resistance: 1.147, 1.1544, 1.1601

Support: 1.1389-1.1369, 1.1334

GBPUSD (H4)

Cable broke through the symmetrical triangle outlined in the four-hour chart. Bulls are once again facing stern resistance at 76.4% Fibonacci, where it was rejected three times in a month. The decisive spikes during US trading session have very short lower wicks, which could be a sign that bulls have managed to gather enough power to overtake 1.2662 horizontal resistance. Some follow through buying has the potential to lift Sterling to test the four months high at 1.2784.

Resistance: 1.2662, 1.2784, 1.2855

Support: 1.2587, 1.2526, 1.2466

XAUUSD (H4)

Gold’ positive move seemed rather unaffected by the risk-on mood in the equity market. The value preserving metal bounced back from $1795, and is currently clinging to $1818 horizontal resistance. Economic docket remains relative light, and global fundamentals are mixed, thus Gold bidders are still waiting for a significant motive to push price higher. Nonetheless, bullish run will likely to resume from a technical perspective. MACD on the four-hour chart continues to eke out the bulls.

Resistance: 1818, 1836

Support: 1786, 1762, 1742

Economic Data

Weekly Analysis

Market Wrap (Weekly Basis)

EURUSD

It has been a choppy week for EURUSD, but it still managed to push its price higher over the past week, growing from 1.1300 region to 1.1443 and heading to its best level since the spike in March. Looking ahead, news such as WH Economic Advisor Kudlow’s statement of potentially raising fiscal stimulus at the end of July might be able to boost the greenback’s performance; on the flipside, as major US cities began to halt the reopening of local economy, the anticipation of a better economic outlook across the US is becoming more improbable. Nonetheless, as we have found from the technical point-of-view, the MACD is looking particularly positive with the signal lines all set firmly above the zero level, we believe the pair is going to test the resistance level around 1.14 in the upcoming week and is likely to break through. At the same time, we are experiencing an optimistic perspective in 1-year bearish market that we keep mentioning earlier, our book exposure is in our flavor at the same time. We believe that there will be a significant resistance level at 1.15, which was the last highest price level.

XAUUSD

Gold spent some time consolidating in the $1,795-1818 range, and there are some mixed clues this week. Ideally, the COVID-19 spread and the Sino-US dispute should suppress the market’s risk sentiment and help gold maintain its strength. However, Friday’s optimism was supported by expectations of further stimulus measures and virus vaccine news, which seemed to limit the safe-haven demand.  Although the yellow metal has not accelerated at the rate we have seen in last week, the bulls are not ready to let go. On Thursday, due to optimism about the COVID-19 vaccine and US President Donald Trump will not impose further sanctions on Chinese officials responsible for enacting the Hong Kong National Security Law, which caused price of gold fell $13 per ounce intraday. After struggling around $1797, the gold steadily climbs back to $1805 mark with the deterioration of US-China relations and the surge in COVID-19 cases on Friday.

For the next week, the gold price not only be affected with the US-China relation and the update of COVID-19 vaccine, but it also be limited by US Treasury bond yields. In the technically side, looking at the chart below, there is a clear channel formation, but it is very steep. The first support will be the $1800 per troy ounce level but beyond that, the channel low could be next up. Any break of the channel low could take the price to the next support near $1786.11 per ounce. In the long run, prices are in a very strong upward trend. This retracement may be a trivial matter as the price makes its way toward $2000 per ounce or the all-time high at $1920.94 per ounce.

GBPUSD

Cable made a strong push after testing the support line at 1.25129 early this week; afterward, it pulls back near to 1.2650 level after testing the resistance at 1.26359. Cable made a U-turn after crossing the 21-day EMA, then found a support at the 50-day EMA. The selling pressure held the upward momentum.

The upward momentum is held due to a lack of a catalyst to get the market moving. Both the U.S. Federal Reserve and the Bank of England are loosening their monetary policies. For an instance, both central banks are working hard to help their households financially improved by providing stimulus. That being said, Cable might react depending on the figures of coronavirus. At the moment, the British pound will probably do better against the U.S. dollar because UK seems to handle the second peak better and the U.S. does. There are more than 70,000 new cases reported and 900 dead daily this week in the U.S. The effort of administrating this pandemic is an essential factor to examine these two currencies.

Daily Market Analysis

Market Focus

Technology shares pushed U.S. stocks lower for the first time in three days after investors rotated out of this year’s top performers. Treasuries gained with American initial jobless claims posting their smallest weekly decline since March. The tech-heavy Nasdaq 100’s 0.7% decline was among the largest of major U.S. benchmarks, with Microsoft Corp. and Apple Inc. leading the losses. The information technology was the biggest decliner in the S&P 500, which had gained more than 2% in the past two days. Netflix Inc., in particular, slumped in late trading after the streaming service reported fewer subscriber additions than forecast.

On the other hand, the Stoxx Europe 600 Index tracked Asian shares lower as Chinese retail sales in June came in softer than expected, even as the economy returned to growth last quarter. The euro was little changed after the European Central Bank kept its emergency monetary stimulus program unchanged.

In conclusion, the economic data equity markets’ performance from the US and China served as essential reminders of the long road ahead to a full global recovery is quashing optimism seen earlier in the week spurred by progress in developing a coronavirus vaccine.

Market Wrap

Main Pairs Movement

The EURUSD pair settled around 1.1380 near daily lows, after an uneventful ECB and mixed US data. Stubbornly high unemployment levels and pandemic concerns weigh on the sentiment. The AUDUSD pair has been unable to advance despite upbeat local and Chinese data, as the American dollar benefited from the risk-off mood at the end of the day. AUDUSD at 0.6970. The Loonie moved sideways in a tight range near 1.3500 during the first half of the day before gaining traction during the American session.

The DXY, on the other hand, is trading on a positive note above the 96.00 mark following the opening bell in Wall Street on Thursday. US Retail Sales and Philly Fed index all come out above estimates.

COVID-19 Data (EOD):

Technical Analysis:

 USDJPY (H4)

Bouncing back from Wednesday’s loss, USDJPY clings onto some modest daily gains above 107 during the US sessions as it penetrated the 107.25 resistance level. Looking at the pair’s performance from last week, we can see that the pair has been zig zagging between 106.63 and 107.40 and has yet to find a strong momentum in either direction. However, by observing at the indicators, we can see that the RSI is entering the positive overbought area, which in turn, suggests a pullback might take place before any trend is formed. Since there is no relevant data await to be released on Friday, the risk sentiment and US equity market’s performance will play a significant role in directing the pair’s movement for the rest of the week.

Resistance: 107.25, 107.60, 107.95

Support: 106, 106.40, 106.65

GBPUSD (H4)

Cable is trading 0.30% lower on Thursday as the pair has retreated from its early gains at 1.2626 to 1.2550. Although the UK employment data came in better than markets’ expectation, the information still fell short to boost sterling. Nevertheless, we believe the pair is about to enter an upbeat momentum because in the 4-hour chart, we can see that the RSI has dropped below the 50 area, suggesting that more space has been cleared for the pair to climb back to the oversold area. On top of that, with an ascending triangle forming, it further proves that the price for the pair should appreciate in the medium term.

Resistance: 1.2632, 1.2682, 1.2751

Support: 1.2517, 1.2470, 1.2342

XAUUSD (H4)

Gold prices have dipped down below the psychological support of $1800 after the precious metal has been consolidating between $1810 and $1800 over the past two days. The strong dollar demand is one of the main reasons that weighs down on the Gold’s price. Currently, the markets seem to overlook the intensifying coronavirus outbreak across the US and has switched their attention towards the US-China relationship. However, noting that Covid-19 pandemic is still going to impact the world’s economy in the long run, we expect the buying power and risk-management demands for the precious metal would continue to push the Gold’s price back above the 1800 level if the pair ever retreats back to the 1795 or lower 1790 region.

Resistance: 1800, 1807.22, 1818.12

Support: 1791.31, 1777.27, 1766.01

Economic Data

Daily Market Analysis

Market Focus

 US equity index are riding on positive news from biotech company Moderna Inc., where it reported promising trial result. The vaccine developments brought a rush of optimism to the financial markets that have struggled to make headway recently in the face of record high outbreak figures. However, stocks were faded during mid US session as Chinese foreign ministry said it would take necessary measures including sanctions against American entities and individuals as a mean to retaliate US signing the “Hong Kong Autonomy Act”.

OPEC is confident that it can start easing deep production cuts next month without hurting the rally in oil prices. OPEC and its allies will reduce 7.7 million barrels a day in August as scheduled, down from the current 9.6 million cuts. “As we move to the next phase of the agreement, the extra supply resulting from the  scheduled easing production cuts will be consumed as demand continues on its recovery path,” Prince Abdulaziz said at the start of an OPEC+ video conference, and insisted that OPEC+ wasn’t targeting any particular oil price, but signaled that current levels aren’t high enough.

Bank of Canada kept the interest rate unchanged at 0.25%. Highlights from BoC:

• The bank expects a 7.8% drop in output this year, followed by a 5.1% rebounded in 2021 and growth of 3.7% in 2020.
• Anticipating localized virus flareups, not a “widespread” second wave.
• Will keep overnight lending rate unchanged until inflation returns to 2% target at a sustainable level.
• The border shutdown and travel bans will also have an impact on Canada’s hospitality and travel industries.

Market Wrap

Main Pairs Movement

US dollar demand was hampered by another positive headline from Moderna, the dollar index was down 0.22% as of writing. Investors continued to look past surging confirmed cases worldwide and put faith on potential vaccine development by various drug makers instead. Swiss Franc had the worst performance among its G-10 peers, down 0.46% on Wednesday, speculators were adjusting their position ahead of the European Council’s summit that is schedule to take place during this weekend. The pressure is mounting for EU countries to gather consensus on the proposed enormous recovery fund.

Cable has been benefiting from dollar weakness despite the escalating tension between China and Britain as Beijing accusing UK’s ban on Huawei is political manipulation. The British government decided to terminate their business relationship with Huawei due to cyber security concerns about the company having backdoors to the Chinese army. The pound was also encouraged by upbeat Consumer Price Index, rose to 0.6% from previous 0.5%.

COVID-19 Data (EOD):

Technical Analysis:

 USDCHF (H4)

Swiss Franc was on the defensive against US dollar during Wednesday’s trading, lost 0.46% intraday. Bulls have advanced beyond SMA50, and is currently hovering slightly above SMA100 on the four-hour chart. The descending trend line was unable to withstand bull’s attack, but further confirmation is needed to prove this is not a false breakout. MACD bars favor the bull as well.

Resistance: 0.9535, 0.9603, 0.9647

Support: 0.9391, 0.9325

EURUSD (H4)

Euro-dollar was maintaining its bullish stance, gaining 0.11%. Price has been clinging to Bollinger’s upper region, and RSI was wandering between 60-70 for the past few days. The nearest resistance sits around 1.147, the highest point in the past 17 months. With the existing strong bull run, this resistance level should be challenged within a short period.

Resistance: 1.147, 1.1544, 1.16

Support: 1.1394, 1.1334, 1.1287

USDCAD (H4)

USDCAD has been rejected four times within two weeks and is now ready to test horizontal support at 1.3494.  Bear’s pull was powerful as seen from RSI’s drop from 63 to 30 without any backtracking. If 1.3494 fails to hold, then price will accelerate downward extension to 1.3377 before any significant rebound could take place.

Resistance: 1.3628, 1.3739, 1.3865

Support: 1.3494, 1.3377, 1.3215

Economic Data

Daily Market Analysis

Market Focus

US stocks posted their biggest gain in more than a week amid a late session surge, led by rallies in the energy, materials, and industrial sectors. The dollar weakened to an almost five-week low and Treasuries were little changed.

After the close of regular trading, the SPDR S&P 500 ETF Trust (SPY) jumped on news that Moderna Inc’s Covid-19 vaccine produced antibodies to the coronavirus in all patients tested in an initial safety trial. The S&P 500 climbed as investors weighed earnings season and the economic hit of rising virus cases. Megacap tech shares were initially headed for the first two-day slide since mid-May, before rallying late in the session. Banks were mixed after JP Morgan reported strong trading results, while Wells Fargo tumbled after cutting its dividend and reporting its first quarterly loss since 2008.

JP Morgan Second-Quarter Earnings Takeaways:

• Trading propelled earnings, just as it did in the first quarter. JP Morgan reported record markets revenue, with gains in fixed-income and equity trading. Each beat the average estimate from analysts, though CEO Jamie Dimon does not think this will last.
• Some $10 billion in provisions for possible loan losses reflect a darker outlook for the U.S. economy than the bank had a few months ago, but there’s a good chance the company is being too cautious here. It reckons provisions will not be this high again.
• The consumer outlook is fuzzy. Federal stimulus has clouded this bank’s ability to forecast the degree to which households will continue to pay their bills. Delinquencies are particularly low given the unemployment rate.
• The bank has no plans to adjust its dividends, and Dimon did not rule out the possibility that the bank could buy back stock in the fourth quarter.
• The bank expects the U.S. economy to continue shrinking this ear and next, and it sees the unemployment rate at 7.7% at the end of 2021.

Market Wrap

Main Pairs Movement

The financial markets continue to focus on sentiment instead than on data, with equities leading the way. Upbeat earnings reports overshadow coronavirus-related concerns, which in turn, push EURUSD to near June monthly high at 1.1422.

The USDJPY pair is ending Tuesday with modest losses in the 107.20 price zone, retreating from an intraday high of 107.43 achieved during London trading hours. The greenback enjoyed some temporal demand.

Despite the broad-based selling pressure surrounding the greenback on Monday, the USDCAD pair closed the day in the positive territory above 1.3600. Currently, the Loonie is entering the consolidation above the 1.3600 after advancing to the two-week highs.

COVID-19 Data (EOD):

Technical Analysis:

GBPUSD (H4)

The Cable started the day off quite weak as one of the most underperformed pair, but has currently picked up its price.The greenback is mixed against its G-10 peers as US equity futures turn higher following JP Morgan earnings and a stronger-than-expected US small businesses report. The UK pound, on the other hand, lags as the UK economy was weaker than expected in May. Looking at the indicators, the 200 Simple Moving Average suggests that the Cable is nearby and could reach a strong resistance area at 1.2565. On top of that, with the RSI moving away from the oversold point, we are expecting the pair to go back to a bearish run once the pair fails to penetrate the immediate resistance zone.

Resistance: 1.2565, 1.2637, 1.2673

Support: 1.2470, 1.2405, 1.2342

AUDUSD (H4)

On Tuesday, the Aussie pair rebounded intensively by first bottoming at 0.6920 then came back on top of 0.6970 range. AUDUSD pair staged its comeback during the American session, which is supported by an improved risk sentiment. Currently, a slide across the board as US equity markets turn to the upside, which in turn, boosted AUDUSD. The DXY is falling 0.20%, reaching 96.25, the lowest level in a month. On the 4-hour chart, the Aussie continues to zig zag its way through July between 0.6921 and 0.7000. In order to form a bullish run, the Aussie must first obtain traction above 0.7000; on the other hand, for the pair to post more losses, it must close under the 0.6920. With that being said, Aussie’s movement for the near-medium term depends on substantial economic data, and the upcoming Employment Change data this week should be one to anticipate for.

Resistance: 0.6980, 0.7000, 0.7060

Support: 0.6855, 0.6890, 0.6920

XAUUSD (H4)

Risk sentiment continues to drive the precious metal’s movement in the near-term. The safe-haven metal dropped down to 1790 in the early trading hours today but soon attracted some buying interests and staged an intraday bounce back to the 1810 region. Such constructive set-up further boosted the Gold’s already bullish trend. Looking ahead, with pharmaceutical giant, Pfizer, receiving a fast track status granted by the U.S. FDA for its Covid-19 vaccine, possible relief from the pandemic is implied. With that being said, if the news initiates a risk-on sentiment, a drop in Gold’s price can be expected. Nevertheless, by reflecting to the prior experiences that associate with vaccine development related news, if Gold pullbacks down to the 1790 or other lower levels, it is likely that the strong support, extensive buying power, and worsening economic outlook at that moment will continue to protect the downside.

Resistance: 1810, 1818

Support: 1799, 1792, 1787

Economic Data

Daily Market Analysis

Market Focus

US stocks declined after the S&P 500 briefly touched the highest level since the coronavirus pandemic sent markets tumbling worldwide in March. Major US equity index suddenly stumbled during late US session on signs that the virus was constantly breaking record high.

President Donald Trump on Monday criticized health experts’ guidelines for schools reopening were too tough, impractical, and expensive. On the other hand, Fauci on Monday said the surge in coronavirus cases to the country’s failure to shut down completely, then a rush to reopen too soon, and urged a commitment to guidelines to rub out the disease.

China announced sanctions against US officials including Senators Marco Rubio and Ted Cruz, in a largely symbolic retaliation over legislation intended to punish Beijing for its treatment of ethnic minorities in the XinJiang region. The moves come three days after the US sanctioned a top member of China’s ruling Communist Part and three other officials over alleged human rights abuses in XinJiang.

Market Wrap

Main Pairs Movement

The dollar weakened against most of its G-10 peers for most of the day, but momentum quickly took a U-turn near the end of US trading session. Euro-Dollar surged 0.4% as German economy ministry, Peter Altmaier, said that the country is in the process of recovering and that the low point has passed, and commercial relationship with China remains stable, despite the controversy around the Hong-Kong law.

The safe-haven Yen gained upper hand against the greenback as China announced sanctions against US officials, it is up 0.35% on Monday.  The announcement further escalates geopolitical tension between China and US, thus benefited the Yen. US 10-year treasury yield fell 7% as of writing.

Sterling’s resilience against the US dollar has vanished on Monday. The downside move might come from bidder’s profit-taking and escaping from mounting uncertainties as both parties are heading to Brussels this week. Cable dropped 0.53% intraday.

COVID-19 Data (EOD):

Technical Analysis:

 EURUSD (H4)

Sterling took a hit on Monday, retreated to 1.256. Price was once again blocked by 1.2662 resistance and created a double-top on the four-hour chart. It breached 61.8% Fibonacci at 1.2587 and is dropping toward previous low of 1.2526. If 1.2526 fails to withstand Bear’s attack, it could open doors to tremendous downside loss. MACD’s enlarging negative bars also pointed to a continuation of downward momentum.

Resistance: 1.2587, 1.2662, 1.2784

Support: 1.2526, 1.2466, 1.2391

USDJPY (H4)

USDJPY was traded below the 107.29-107.36 resistance band, which previously acted as strong support, and now turned into a stern resistance. The descending trendline is still valid on the four-hour chart, thus an immediate upside breakout is likely to be restricted. That being said, downward near support at 107.1 will be tested within a short period.

Resistance: 107.29 – 107.36, 107.96, 108.55

Support: 107.1, 106.75, 106.4

XAUUSD (H4)

Gold continued to zig-zag its way up towards $1836, and was placed well within the ascending tunnel. Price was traded slightly above $1802 near the end of day trading, and $1800 is gradually attracting plenty of long stop entry as speculators are gaining confidence of the recent rally. That being said, price could receive a decent boost if it retreated to test $1800 and triggers these pending orders.

Resistance: 1818, 1836

Support: 1786, 1761, 1721

Economic Data

Weekly Analysis

Market Wrap (Weekly Basis)

Gold

        Gold relentlessly surged to its highest level at $1818 since September of 2011. Global investors were bulking their position on safe-haven assets, such as government bond and value preserving metals. Large fund is adjusting their portfolio with respect to COVID-19 condition, and the recent spiking number of confirmed cases is reviving fear of lockdowns. The heavy bearish pressure on major equity indices, except for Nasdaq index, is redirecting cash flow to the yellow metal. Gradual recovering US economy and consumer confidence could be hampered, which is the least scenario that the Fed wanted to see. Despite Treasury Secretary Steve Mnuchin promised a new wave of pandemic stimulus package will be delivered by the end of July, the effectiveness could be diminishing in the face of lockdowns. Nonetheless, if Fed decides to step up to another monetary stimulus, Gold will be riding another wave of boost due to improvement of liquidity that the Fed injected to US economy.

Zooming into a closer picture, Gold is undergoing a correction near $1800. The commodity is currently placed near the edge of an ascending trendline, if price could find firm acceptance above $1800, further upside gain looks to be promising. If not, it would spend some time consolidating within $1780 – $1800 range.

GBPUSD

        Having witnessed an abrupt end to the Brexit negotiations during the last week, EU diplomats are to meet their British counterparts in London for the second of the six-week talks. Market seemed to ignore the lack of progress from all these Brexit talks. On Wednesday, British Chancellor Rishi Sunak announced his plan to combat the economic pessimism. The fiscal stimulus is worth up to 30 billion pounds and emphasize on helping companies retaining furloughed workers. He also introduced a 5% cut to sales tax in the hospitality sector to help alleviate the pain from stagnated tourism.

Even the safe-haven greenback was gaining strength from renewed pandemic fear, Sterling was surprisingly resilient against the US dollar, capitalized 1.18% within this week.

EURUSD

ECB is set to leave its monetary policy unchanged in its July meeting, the central bank has injected 600 billion euros into its economy through the Pandemic Emergency Purchase Program (PEPP) up until June. Member of the monetary authority wanted to assess the effectiveness of its stimulus aid before taking another move to spur the united economy, while Christine Lagarde said ‘we have done so much that we have quite a bit of time to assess incoming data carefully.’ EU leaders will be meeting face-to-face on July 17-18 to discuss the ambitious 750 billion euros fiscal plan, which they had previously failed to compromise on.

EURUSD closed the week 0.44% higher near 1.13 handle this week; however, EURUSD had dipped on Thursday after performing well and reaching 1.13708 over the last few days of this week.

Market Focus

US equity market turned south on concerns that resurgence in coronavirus cases will lead to second wave of lockdown across US, which is distinct possible as Fauci mentioned on Wednesday ‘any state that is having a serious problem, that state should seriously look at shutting down’. United States reported more than 60,000 new COVID-19 case yesterday, setting a single-day global record. Financial stocks were among the worst performers on the S&P 500 index, pushing the gauge to a one-week low.

US Treasury Secretary Steve Mnuchin said the next coronavirus stimulus legislation can be passed by the end of July. The newly proposed funding targeted broader range of business that were affected by the pandemic, “the vast majority of these loans were hard-working business where the money went to pay employees and they’ll be forgiven” Mnuchin said on CNBC Thursday.

UK Chancellor Rishi Sunak announced 30 billion pounds of tax cut and extra spending, including lump sums for companies retaining furloughed workers and a cut to sales tax in the hospitality sector.

Market Wrap

Main Pairs Movement

The safe-haven greenback gained traction amid renewed fear of another pandemic lockdown, most G-10 currencies was put on the back foot against US dollar, while dollar index surged 0.41%. Sterling was barely held off dollar’s attack thanks to Sunak’s fiscal stimulus to help revive UK economy. Lonnie had the worst performance amid falling oil price, partly due to looming uncertainty on meeting July 15, Russian energy minister Alexander Novak said on Thursday that they have not yet made any decisions on possible changes to the OPEC+ oil output cut deal.

US 10-year bond yield fell 8% on Thursday amid risk-off mood across financial market. However, Gold dropped 0.31% as the precious metal is currently becoming expensive to buy, given the rising number of confirmed cases in US, another short squeeze scenario in gold market is not ruled out.

COVID-19 Data (EOD):

Technical Analysis:

GBPUSD (H4)

Cable is well suited above the yellow trend line on Thursday but was unable to break 1.2667 resistance, which matches perfectly with 76.4% Fibonacci. Bullish bars from MACD is shrinking and price is pressured down towards 1.2606 support, where trendline meets 61.8% Fibonacci. If this level could fend off bearish attack, it could surge to 1.2753. Otherwise, it could take huge plunge if trendline fails to hold off given the current strong dollar demand.

Resistance: 1.2667, 1.2753, 1.2855

Support: 1.2606, 1.253, 1.247

USDJPY (H4)

USDJPY is clinging to SMA100 and lacks any firm directional bias. There is an obvious downward wedge pattern shown on the four-hour chart, which usually acts as a sign of rebound. However, MACD suggests price should continue to run south. In this case, SMA100 could help to navigate price momentum, bullish if price moves beyond SMA100 and bearish if price is capped by SMA100.

Resistance: 107.93, 108.55, 109.2

Support: 107.08, 106.53, 106

AUDUSD (H4)

Aussie continued to cap below 0.6967-0.7 resistance band. The risky currency is looking to break its current upward trendline, if it does so, price will be pulled back to 0.6897, followed by 0.6803. However, if at all the bulls mange to stay positive and conquer 0.7 hurdle, it could run widely toward 0.7121.

Resistance: 0.7, 0.7121, 0.7199

Support: 0.6897, 0.6803, 0.6669

Economic Data

Risk Warning:

Trading Forex and CFDs involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. Please read our legal documents and ensure that you fully understand the risks before you make any trading decisions.

The information provided is of a general nature only and the advice has been prepared without taking account of your objectives, financial situation or needs.

Daily Market Analysis

Market Focus

Tech Stocks extended gains while XAUUSD successfully climbed over $1810 on Wednesday. US tech shares surged as investors looked past tensions between Washington and Beijing and sought out companies thought to be insulated from rising COVID-19 cases. For instance, Apple and Amazon were among the high-flying tech stocks that advanced, pushing the Nasdaq Composite higher.

On the other hand, most stocks fluctuated between small gains and losses on S&P 500. Gold topped $1,800 an ounce, while Treasury yields climbed, and the dollar slipped. Moreover, Chief market analyst from Miller Tabak concluded that “as S&P 500 are getting close to the top end of its range, it looks like investors are going with the ‘safe’ route, which is buying tech, gold, and Treasuries”

Stocks in Europe gave up gains early in the trading session after Prime Minister claimed that regional leaders will probably fail to agree on a massive spending plan aimed at reviving their economies.

Market Wrap

Main Pairs Movement

GBPUSD is trading above 1.2550, shrugging off Germany’s Merkel comments that Brexit talks made little progress and may end with no deal. Adding to that, UK Chancellor Sunak presented fiscal plans including a retention bonus for firms that re-hire workers. USDJPY is extending its break below the 107.50 level, undermined by the relentless selling in the US dollar across its main competitors. AUD is having a great session on Wednesday as it trades higher against all the majors, with the 0.70 psychological level turning into a resistance level. The DXY is losing upside momentum and slips back to the sub 97.0 area following the opening at Wall Street. Last but not least, an unexpected build in US crude stockpiles once undermined WTI’s price in the early trading hours, pushing the price down to 40.35; nonetheless, it has bounced back to 40.85.

COVID-19 Data (EOD):

Technical Analysis:

 EURUSD (H4)

EURUSD is performing well on Wednesday as the pair has rallied 0.60% higher with extended retreat in the greenback. Building on top of the strong US equity market, investors are shrugging off EU disagreements amid rising coronavirus statistics. The RSI is approaching the overbought zone but there appears to be some room on the upside. At the same time, the MACD signal lines remain above the mid-point, suggesting a bullish trend is on the rise.

Resistance: 1.1349, 1.1380, 1.1400

Support: 1.1203, 1.1227, 1.1261

USDCAD (H4)

The Loonie is trading 0.72% lower on Wednesday as the greenback undergoes selling pressure. At the time of writing, the price is dropping to the 1.3500 psychological zone. Additionally, with oil moving higher and USD struggling, the Loonie is now looking to test lower levels, which is around 1.3485, a strong support price level that has been both support and resistance in the past. With the RSI has hit the oversold region, we believe that even though the pair is likely going to decline further with the ongoing greenback sell-off sentiment, there could be a rebound back in the medium term.

Resistance: 1.3567, 1.3632, 1.3719

Support: 1.3485, 1.3439, 1.3356

XAUUSD (H4)

The precious metal extended its bullish trend today and rose above the highest level since 2011 at $1818. XAUUSD retreated moved off from the highs and found support around $1810. XAUUSD is about to post the strongest close since September 2011 as the demand for the safe-haven metal prevails on a scenario dominated by ultra-easy monetary policy across the world. On the upside, the next resistance should be seen at 1825 while the 1797 region becomes the most immediate support. At this point, we expect the gold would fluctuate between 1800 and 1818 until further business or financial news shake sentiment.

Resistance: 1818, 1825, 1840

Support: 1765, 1778, 1797

Economic Data

Risk Warning:

Trading Forex and CFDs involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. Please read our legal documents and ensure that you fully understand the risks before you make any trading decisions.

The information provided is of a general nature only and the advice has been prepared without taking account of your objectives, financial situation or needs.