Daily Market Analysis

Market Focus

Risk-off sentiment across the globe navigates the foreign exchange market’s fluctuation on Wednesday. With the rising coronavirus cases in the U.S., concerns over the recovery of the global economy has driven Dow Jones, Nasdaq, and S&P 500 down on Wednesday, approaching key support indicators.

At the same time, UK health experts have warned the government about the risk of a second wave of coronavirus contagions as PN Johnson continues to lift restrictive measures, which in turn, results in GBPUSD dropping more than 0.80% on the day.

Last but not least, crude oil prices dropped after US release its stockpiles reports. API reported that there is an increase of 1.75 million barrels while the EIA weekly report posts a 1.4 million gain. Both well above the market’s expectation.

Market Wrap

• Dow Jones down 2.72%, S&P500 down 2.59% and Nasdaq slightly dropped by 1.60%
• WTI Aug slightly down $2.3 to $38.07, and Brent Oil Aug down $2.04 to $40.28 near closing.
• Dollar Index up by 0.57%
• Gold down 0.34% and settled around $1761
• AUDUSD down 0.88% to 0.6867
• EURUSD down 0.50% to 1.1250
• GBPUSD down 0.81% to 1.2418
• NZDUSD down 1.27% to 0.6408
• USDCAD up 0.64% to 1.3636
• USDJPY up 0.49% to 107.04

Main Pairs Movement

The dollar appreciated against all of its major rivals, included those considered safe havens. The USDJPY pair recovered to 107 while gold price retreated from a fresh multi-year high of 1779.41 to settle around 1765.

The EURUSD pair came under selling pressure as speculative interest seek for safety in the greenback. Moreover, USD recovers from Tuesday’s lows at 1.3485 for USDCAD and has elevated to levels past 1.3600, hovering at a one-week high region around 1.3630.

On the same note, NZDUSD also dived down from 0.6500 to 0.0.6400 on Wednesday and is one of the worst-performing G-10 currencies today. The overall risk-off sentiment and the dovish monetary policy statement by the RBNZ have punished the kiwi.

COVID-19 Data (EOD):

Technical Analysis:
AUDUSD (H4)

AUDUSD slumped below 0.6890 today after the pair came under a renewed bearish pressure in the American trading hours. Additionally, as a result of the global risk-off sentiment, the pair has fallen more than 0.85% on the day. AUDUSD has been testing the support at 0.6855 and if it penetrates, we expect the pair to consolidate between 0.6793 and 0.6855.

Resistance: 0.6985, 0.7060
Support: 0.6681, 0.6793, 0.6855

USDJPY (D1)

The broad-based strength surrounding the greenback has pushed USDJPY over the 107.00 resistance and has been holding its gain above 106.90. Due to the sharp decline in Wall Street and the lowered US yields, the demand for USD increases drastically, and as a result, rebounds USDJPY pair from its Tuesday’s loss. However, with the risk-aversion sentiment hovering in the background, the demand for JPY is likely to overturn the USDJPY bullish run.

Resistance: 107.20, 107.63, 108.18
Support: 105.09, 105.96, 106.58

GBPUSD (H4)

GBPUSD experienced an intraday pullback after hitting the 1.25390 resistance zone. The greenback buying picked up pace when the US trading session began. The USD bullish run was driven by the intensified concerns over the V-shape economic recovery as an ever-increasing number of new COVID-19 cases kicked in this week. As the GBPUSD is approaching to the psychological support at the rounded 1.2400 region, a break below the zone is needed to confirm the further direction.

Resistance: 1.2537, 1.2689, 1.2810
Support: 1.2207, 1.2331, 1.2400

Economic Data

Market Focus

A little drama took place this morning where White House adviser said the trade deal between China and US was over. US index plunged in a brief moment, but immediately rebounded after President Donald Trump tweeted and clarified “the China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement”. Nevertheless, US stocks rose amid Trump’s supportive stance on sending out another round of checks to Americans.

Prime Minister Boris Johnson announced the biggest relaxation of the UK’s coronavirus lockdown. Hotels, Pubs, restaurants, and cinemas will be able to open their doors from July 4^th. Business groups cautiously welcomed the move and want more government assistance to help companies safely reopen, said British Chambers of Commerce Director General. Johnson warned the possibility of second wave is not ruled out, and “will not hesitate to apply the brakes and reintroduce restrictions, even at national level, if required.”

The German Manufacturing PMI in June printed 44.6, surpassing estimate of 41.5. A figure below 50 is indicative of contraction, however it still comes better than May’s 36.6, a sign of recovery in German manufacturing section.

Market Wrap

• Dow Jones up 0.59%, S&P500 up 0.65 % and Nasdaq up by 2.03%
• WTI Aug slightly down $0.31 to $40.37, and Brent Oil Aug down $0.89 to $42.32 near closing.
• Dollar Index down by 0.35%
• Gold surged 0.74% and settled around $1767
• AUDUSD up 0.31% to 0.6929
• EURUSD up 0.42% to 1.1307
• GBPUSD up 0.41% to 1.252
• NZDUSD up 0.21% to 0.6492
• USDCAD up 0.21% to 1.3550
• USDJPY down 0.36% to 106.52

Main Pairs Movement

Gold returned to the spotlight, finally broke through 1760 handle, settled around $1767. It was hardly surprising to Gold speculators, as uncertainty from COVID-19, trade tensions, negative real rate, and a weakening US dollar remained supportive to the precious metal. COMEX August future was traded around $1781 an ounce as of writing, marked the highest price since 2012.

Dollar Index dropped for a second consecutive day, losing 0.35%, settled around 96.66. Demand for US dollar are less acute, major central banks are opting not to roll over Fed offered swap line from March. Fed started to offer foreign exchange swaps to central banks around the world as they suffered a dollar funding squeeze. But demand for dollar swap flattened near the end of April and witnessed a significant drop in June.

COVID-19 Data (EOD):

Technical Analysis:

 EURUSD (H4)

Euro-dollar regained 1.13 handle on Tuesday, climbed to four-days high. The pair has been kept below 1.1348 for the past two weeks, failed to advance beyond this point has created an early shape of double top.  If it breaches 1.1287 on Wednesday, then a bearish reversal will likely take place.  Though an upward breakout is not ruled out as the greenback remains defensive, any further moves above 1.14 is doubtful.

Resistance:  1.1348, 1.14, 1.147

Support: 1.1237, 1.1177, 1.1096

XAUUSD (D1)

Gold pierced through $1760, and settled around $1767, daily up 0.74%. The precious metal made a decisive bullish move after wandering around Bollinger average line for 6 days. It closed outside of Bollinger’s upper band, indicating a retreat should be coming soon. However, RSI is well below 70, suggesting there is still plenty room for further gains. Our stance is still bullish on Gold as long as it stays above $1746 support line.

Resistance: 1791, 1838

Support: 1746, 1681, 1635

USDCAD (H4)

Canadian dollar was the only currency to lost against USD among G-10, up 0.21% to 1.3550. Stabilized crude oil prices continues to underpin the commodity-linked currency. The pair is trapped within a decent downward tunnel, a break below the 1.35 handle would pave the way for it to test 1.3374 again, the lowest price since March.

Resistance: 1.3594, 1.3663, 1.3741

Support: 1.3478, 1.3374

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

After the US data in existing home sales was released, which failed to achieve market expectation, the US dollar’s weakness has navigated the global currency markets’ fluctuation on Monday. Additionally, the US equities markets reject coronavirus fears to focus on the positives with the bulls remaining in charge, as a result, the VIX has fallen over 7%. Meanwhile, the S&P 500 closes 0.63% higher, Dow rallied 0.59%, and the Nasdaq raised 2.03%.

Outperforming sector in the S&P 500 focuses on the retail industry as GAP, Footlocker, and Bestbuy all witnessed a surge of 4%. On the other hand, the underperforming sector remains on the traveling industry as American Airlines, Norwegian Cruise Lines, and Royal Caribbean Cruises all dropped by over 6% as the US traveling industry failed to see any relief amid the increasing COVID-19 cases across the US.

Market Wrap

• Dow Jones up 0.59%, S&P500 up 0.65 % and Nasdaq up by 2.03%
• WTI Aug slightly up by $1. 03 to $40.46, and Brent Oil Aug up by $1.08 to $42.99 while near closing.
• Dollar Index down by 0.64%
• Gold rallied 0.61% and sit around $1754.76
• AUDUSD up 1.09% to 0.6907
• EURUSD up 0.78% to 1.1260
• GBPUSD up 1.02% to 1.1.2468
• NZDUSD up 1.14% to 0.6478
• USDCAD down 0.61% to 1.3521
• USDJPY up 0.05% to 106.90

Main Pairs Movement

The dollar edged lower this Monday, losing ground, particularly in the US afternoon. Mixed data and coronavirus cases in the country surging at “unacceptable levels,” according to Texas governor, were behind the greenback’s selling pressure.

The EURUSD pair closed the day with gains around 1.1250 as consumer confidence came in better-than-expected. GBPUSD settled around 1.2460, near its daily high, amid broad dollar’s weakness by the end of the day. The USDJPY pair struggled to capitalize on its intraday bounce to the 107.00 mark and has now retreated to the lower end of its daily trading range. USDCAD, on the other hand, started the new week in a calm manner near 1.3600 but lost its traction during the European trading hours.

COVID-19 Data (EOD):

Technical Analysis:

 EUR/USD (H4)

EURUSD surged on Monday as the greenback corrected lower after rising for four consecutive days. The lower US yields weighed down on the greenback when the 10-year yield fell below 0.676.

On the same note, US Existing Home Sales disappoints the market expectation, dropping by about 9.7% in May. Collectively, the overall weakening of the US dollar has boosted its rival, EUR, to gain traction above the 1.2590 short-term resistance. Nonetheless, as the US 10-year yields has witnessed a rapid bounce back since it hit 0.675 and a few critical US data (New Home Sales, Crude Oil Inventories, GDP, and Initial Jobless Claims) still awaits to be released, we expect the pair to enter a consolidation phase in the near-term.

Resistance:  1.1270, 1.1300, 1.1355

Support: 1.1172, 1.1143, 1.1107

USD/CHF (H4)

USDCHF came under some renewed selling pressure on the first day of a new week. The pair edged lower as the fresh COVID-19 concerns and new cases benefited the safe-haven currency, CHF.

The downtick was driven by a series of factors such as the moderate risk-on appetite across the market and the growing market worries over the second wave of coronavirus infections. After the pair oscillating in the past week, USDCHF is prudently waiting for a break in either direction to determine its next momentum.

Resistance: 0.9533, 0.9586, 0.9650

Support: 0.9390, 0.9425, 0.9464

XAU/USD (H4)

Gold has been on a strong bullish run since the beginning of Monday and is expected to surpass multi-year tops, above the 1765 region. Driven by the dramatic declines in global bond yields, gold is the most targeted hedge asset during economic shocks and uncertain financial market outlook. After the precious metal once again tested the 1765 region, the rally was immediately corrected and is now trading around 1753. However, with the uncertainty continues to worry the investors, it is inferable that XAUUSD would hold a price range above 1700 in the medium-term.

Resistance: 1759.20, 1766.25

Support: 1746.40, 1716,05, 1704.90

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.

GOLD

The price of gold has traded to fresh yearly highs during every single month so far in 2020, and it remains to be seen if the bullish behavior will persist as the rebound from the monthly low (1671) fails to produce a break of the monthly high (1746), which took place during the first week of June. This extended bullish trend can be referred to the continuum of different risky events that took place in each and every month of 2020.

Additionally, this week’s risk-on sentiment tone is boosting the prices of safe-haven metal and crude oil into the end of the trading week. The change in the market mood is possibly led by concerns over the re-escalation of a potential US-China trade war. The concerns rose after Beijing said that it will step up purchases of US agrilcultural products after negotiators from the two sides met in Hawaii.

The precious metal enters a bullish momentum as cyclical currencies and commodities as optimism dulls demand for the safe-haven US dollar, pushing the greenback lower and lifting the antifiat alternatives. Therefore, if the uncertainty that hovered the global economy persists, it is likely to see the precious metal go into another rally next week.

GBPUSD

        Sterling gains the good one in the first day of week while mixed week before the last week. However, poor Average Earning Index and employment situation slap sterling in the face and left uncertainty to the market.

        On the other hands, U.K. prime minister repeated that his government is deeply concerned about the impact of the coronavirus crisis on the local economy. He also said that when the Brexit transition period ends, the government will respond to the U.K.’s economic needs in a creative way.

        On Thursday, sterling had a short-term boost by BoE’s left benchmark interest rate 0.1% unchanged but quickly change course and fell to low. Moreover, BoE expanded its bond-buying program to counter the coronavirus slump but kept some of its powder dry should the labor market worsen more than expected. Other than this, policy makers voted to boost QE by 100 billion pounds.

However, the central bank surprised investors by saying it will slow its purchase pace because stress in financial markets has eased, while reserving the option to accelerate them up again if needed, Bond fell. On the end of this week, sterling has been dragged to fresh three-week lows.

        Heading to next week, we pay close attention to keep support at first mid-term support around 1.23545 and 1.20915 would be a proper secondary support. We believe forex market is cooling down after pandemic event world wild, sterling as well. So the blue range would be the most probably path in next couple month

EURUSD

The Euro initially rallied in the beginning of the week; however, when the EUR/USD pair broke the 1.1372 level, it gave back the gain, and now pulling- back to test levels below 1.1186.

As a growing number of second wave pandemic infections in many countries and the geopolitical tensions between India and China, the Dollar strengthened due to the risk-off market sentiment. The demand for the safe haven Dollar is boosted against the Euro this week. At the same time, the Dollar is supported by the May retail sales report and the Philadelphia Fed’s Manufacturing index; the 18% increase of the retail sales report and the 162% change in the Manufacturing index was essentially helping economic reopening optimism. As a result, the U.S. Dollar Currency Index rises approximately 0.8% this week.

On the other side, ECB announces to lend out 1.5 trillion euros cheap loan, ensuring banks keep providing credit to companies and households to bolster the economic recovery from the pandemic. The massive QE essentially pulls the Euro down, causing the EUR/USD pair to do down.

Looking ahead to next week, the Euro may tries to rally a bit from the general vicinity if the second wave pandemic situation has a turning point, and becomes more optimistic; if not, the Euro might start to unwind down towards the 200 days EMA because the Dollar is a safety currency, and investors will continuously buy the Dollar.

AUDUSD

In the opening of this week, Aussie got a tough start. Not only the fears of second wave of the coronavirus seem to have swept the market since last Thursday but the risk sentiment was also still under pressure. When the market opened on Monday, the Australian dollar fell about 0.50% to 0.6830, and then benefited from the Fed’s actions. The Fed decided to increase the purchase of corporate bonds, which adds strength to the upside momentum. Further, the US government’s permission of four Chinese flight week entry to Beijing airlines and the expectations of the US-China talks in Hawaii during the week also push Aussie to the week high. However, after rising 2.8% in early trading on Monday and Tuesday, the pair retreated, the weaker-than-expected data confirms concerns that the economic recovery from the coronavirus-induced recession will be slow. Therefore, the Australian dollar have extended the downside break of a near-term key support.

After the fluctuations in the earlier part of the week, the pair gets struggle between 0.6840 and 0.6900. Although the decline in the Australian dollar against the US dollar has taken a breather due to Friday’s optimistic retail data, it may be difficult to show strong returns if global stocks trade in red.

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

U.S. shares resumed fluctuating going into the close of trading with investors weighing the latest economic data and reports about fresh outbreaks of the coronavirus. Elsewhere, the Stoxx Europe 600 declined.

BOE’s Rate Decision:

• the BoE expanded its bond-buying program to counter the coronavirus slump but kept some of its powder dry should the labor market worsen more than expected.
• Policy makers voted to boost quantitative easing by 100 billion pounds.
• While central bank holding the benchmark interest rate at a record-low 0.1%.

However, the central bank surprised investors by saying it will slow its purchases because stress in financial markets has eased, while reserving the option to accelerate them up again if needed. Bond fell, sending the yield on 30-year securities up 10 basis points.

Market Wrap

• Dow Jones down 0.15%, S&P500 up 0.06 % and Nasdaq up by 0.30 %
• WTI July slightly down by $0.88 to $38.84, and Brent Oil July up by $0.8 to $41.51 while near closing.
• Dollar Index up by 0.27%
• Gold down 0.23 % and sit around $1722.93
• AUDUSD down 0.47% to 0.6852
• EURUSD down 0.35% to 1.12050
• GBPUSD down 1.05% to 1.1.2424
• NZDUSD down 0.43% to 0.6429
• USDCAD up 0.26% to 1.36
• USDJPY down 0.04% to 106.97

Main Pairs Movement

The dollar advanced the most in a week as U.S. initial jobless claims exceeded 1.5 million vs est. 1.29 million for a 13^th week, reflecting the challenge of ramping up economic growth. The yen led gains among G10 currency peers amid renewed demand for havens following reports about fresh outbreaks of the coronavirus. On the other hands, greenback also supported amid concerns of a resurgence of the coronavirus in the U.S. nation reopens.

Pound drop 1% after BoE rate decision which was widely predicted should keep the lid on government borrowing costs as the Treasuries ramps up bond sales to finance a massive support package to save jobs and keep businesses afloat.

The Swiss National Bank kept interest rates on hold and said aggressive foreign exchange interventions remain its main toll for pushing back against the appreciation in the franc.

COVID-19 Data (EOD):

Technical Analysis:

 GBP/USD (H4)

Sterling had a short-term boost from BoE’s announcement this Thursday, but quickly changed course and fell to its lowest level and breakthrough a critical price around 1.2475 since June 1^st. U.K. will publish Sector Net Borrowing and Retail Sales for the same month, expect jump from bottom at -18.1% to 5.7%.

Resistance: 1.2474, 1.2571, 1.2619

Support: 1.2395, 1.2375, 1.2326

AUD/USD (H4)

AUD was hit hard by its poor local employment data along with increasing new coronavirus cases, which ultimately create a dismal market mood in AUD today. As of writing, the pair has dropped 0.49% on the day to area below 0.6851. In second half of the day, the risk-off sentiment and the heavy selling pressure surrounding major European currencies further boost up the greenback, as a result, the pair closed the day sitting at the support along 0.68460 region. We believe the bullish run of the USD might not overwhelm the market for long as increasing concerns around the second wave of the pandemic is breaking out in the US, hence, AUDUSD should be able to retreat in the following day.

Resistance: 0.69045, 0.69499, 0.70245

Support: 0.67830, 0.68055, 0.68410

USD/JPY (H4)

The yen hit a low of 106.67 on Thursday but after a late buying spree in the U.S. stock markets the pair is now testing 107.00. the main support on the chart for 4 hours is around 12nd June low at the 106.57 area. That seems the solid support after selling from 109.

Resistance: 107.14, 107.44, 107.79

Support: 106.58, 106.29, 105.96

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

Fed’s Chief Powell testifies before Congress for a second consecutive day. Among other things, he claimed that the central bank stands ready to do more to aid the economic recovery if more needs to be done. He also added that “it will be a while before the Fed starts thinking about shrinking its balance sheet.”

On the other hand, UK PM Johnson repeated that his government is deeply concerned about the impact of the coronavirus crisis on the local economy. He also said that when the Brexit transition period ends, the government will respond to the UK’s economic needs in a “creative way”, which in turn, closing GBPUSD at 1.2550.

Market Wrap

• Dow Jones down 0.65%, S&P500 up 0.36 % and Nasdaq up by 0.03 %
• WTI July slightly down by $0.22 to $37.71, and Brent Oil July up by $0.05 to $40.71 while near closing.
• Dollar Index up by 0.04%
• Gold down 0.01 % and sit around $1726.009
• VIX down 0.59% to 33.5
• AUDUSD down 0.1% to 0.6820
• EURUSD down 0.18% to 1.12432
• GBPUSD down 0.12% to 1.25544
• NZDUSD up 0.13% to 0.64595
• USDCAD up 0.15% to 1.3541
• USDJPY down 0.30% to 106.996

Main Pairs Movement

The EURUSD pair has fallen to 1.1206 in a dull trading day as the main focus of the day remained on the rising coronavirus cases in the US. To be precise, Texas reported hospitalizations rose by 11% while the overall country reported over 16,400 new cases before Wall Street closed.

USDJPY pair eased ahead of Wall Street-s close and neared 107.00 as US indexes failed to sustain modest intraday gains. The DIJA and the S&P 500 both closed in the red and the slump is associated with the book from former US Security Advisor John Bolton on Trump. Gold trimmed intraday losses and closed the day little changed at around 1728. Crude Oil prices ended the day little changed, with WTI just below 39.00 a barrel.

COVID-19 Data (EOD):

Technical Analysis:

 USD/CAD (H4)

The USDCAD pair is trading in a relatively tight range on Wednesday and struggles to determine its next short-term direction. The dull trading for USDCAD is mainly caused by the weighed down market sentiment in the greenback as new coronavirus infection cases among Texas and Florida began to see an increase. Additionally, Fed’s Powell’s statements regarding a full US economic recovery is unlikely until the public is confident that the disease is fully contained also added extra concerns. Knowing the increased concerns over the US economic outlook, we are likely to see the Loonie pair entering yet another consolidating phase until market receives a strong bullish or bearish signal.

Resistance: 1.36275, 1.36860, 1.37350

Support: 1.35060, 1.34680, 1.33760

GBP/USD (H4)

GBPUSD formed a bearish pattern on the 4-hour chart and closed today at 1.2542 region. The falling suggests investors’ concerns over a slower than expectation economy recovery in the UK have kicked in. One notable data released today is that UK’s inflation met the expectations with 0.5% in May. Nonetheless, as the pair ended the day bouncing back from the low 1.2512 to above the 1.2540 support, we expect the pair to gain traction and recover today’s loss.

Resistance: 1.25920, 1.26315, 1.26815

Support: 1.24730, 1.25030, 1.25390

USD/JPY (H4)

The yen dropped below 107 once and close at 106.99. It is really differently as shares market keep risk-on while yen fell. After 3 day rallied on 12nd June, yen solid at range from 106.85 to 107.665. 4 hours charts indicate yen in set 107 to 107.5 in recent days and give it great support and resistance in short term. At the same time, we expect that will potential breakout in short term especially we are looking forward downturn. However, we can’t rule out it still hold at the short-term consolidation.

Resistance: 107.51, 107.665, 107.795

Support: 106.95, 106.86, 106.585

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

Stocks rose for a third day as optimism over a recovering U.S. economy overrode concern that coronavirus cases are worsening in locations ranging from Texas to China. Treasury yields rose and the dollar strengthened.

At the same time, U.S. reports showed it retail sales soared by a record 17.7% in May. Still, separate data also showed U.S. industrial production rebounded by less than forecast –15.27% in May after a record slump a month earlier. The S&P 500 climbed 1.9% with energy, health care and materials lending all 11 industry sectors higher in the biggest gain in more than a week.

The Trump administration is preparing a nearly $1 trillion infrastructure proposal as part of its push to spur the economy, according to people familiar with the plan.

Key takeaway for Fed’s testimony:

• Fed chairman said the U.S. economy may be entering a period of significant improvements in employment, but on that will leave the labor market “well short” of the robust levels seen just before the pandemic.
• The levels of output and employment remain far below their pre-pandemic levels and significant uncertainty remains about the timing and strength of the recovery.
• Powell said policy makers were in the early stage of evaluating that using yield-curve control.

Market Wrap

• Dow Jones up 2.02%, S&P500 up 1.88 % and Nasdaq up by 1.75 %
• WTI July slightly up by $0.81 to $37.93, and Brent Oil July rallied by $0.94 to $40.66 while near closing.
• Dollar Index down by 0.36%.
• Gold up 0.08 % and sit around $1726.53
• VIX down 2.12% to 33.7
• AUDUSD down 0.43% to 0.6889
• EURUSD down 0.52% to 1.1264
• GBPUSD down 0.25% to 1.2573
• NZDUSD down 0.36% to 0.6451
• USDCAD down 0.23% to 1.3541
• USDJPY down 0.01% to 107.32

Main Pairs Movement

Greenback advance versus most of its G-10 currency peers after Beijing city officials said schools will be shut amid a resurgence in coronavirus cases, stock demand for havens. On the other hands, Fed chairman said significant uncertainty remains about the timing and strength of the recovery.

The yen and the franc also climbed versus most counterparts. The Bank of Japan left its main monetary policy settings untouched and revised the estimated size of its virus response measures, while pledging to do more if needed. Treasury yields rose as traders digested Fed’s comments that the economy may be bottoming.

COVID-19 Data (EOD):

Technical Analysis:

EUR/USD (H4)

EUR/USD retreated from daily high at 1.134 around, with increasing consolidation pattern in the short-term. So far, we expect it will sink into choppy pattern around range between 1.1204 and 1.14. There is no major eco data in this week, but Brexit news will give it momentum.

Resistance: 1.1356, 1.14, 1.149

Support: 1.1230, 1.1204, 1.112

XAU/USD (H4)

Gold rose slightly up for the as U.S. Fed statement that give it some hedge purpose for uncertainty economy recovery from the pandemic. Notwithstanding uncertainty surround the market throughout outbreak in China but dwindle fears on shares market performance is driving most on gold. Meanwhile, gold is consolidating between 1680 and 1745 without obviously move in short term.

Resistance: 1746, 1754.81, 1766.23

Support: 1665, 1691, 1710

USD/JPY (H4)

Although USD has outperformed most of its rivals today with its upbeat Retail Sales data, USDJPY did not show any apparent trend. However, the 4 hour chart candlesticks did show the pair to have long tails and short bodies throughout the day. This is probably because even though the US data has surpassed investors’ expectation, demands for safe-haven assets are still high amid current uncertainty over the global economic outlook. With that being said, we expect the USDJPY pair to fluctuate between 107.210 and 107.650 until the next major event takes place.

Resistance: 107.510, 107.655, 107.795

Support: 107.055, 106.860, 106.585

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

The dollar swung at equities’ rhythm this Monday. The greenback benefited from safe-haven demand throughout the first two sessions of the day, amid concerns of a second wave of coronavirus contagions across US states and Chinese cities. However, during the US session, the Fed announced that it would begin buying a broad, diversified portfolio of corporate bonds, which in turn, sends Wall Street main indexes into the green and causes the dollar to turn south.

Despite US Treasury yields finished the day with little changed, trimming early losses when Wall Street recovered, the pandemic concerns still hover in the background.

Market Wrap

• Dow Jones up 0.62%, S&P500 up 0.83 % and Nasdaq up by 1.71 %
• WTI July slightly up by $0.81 to $37.07, and Brent Oil July rallied by $0.92 to $39.78 while near closing.
• Dollar Index down by 0.44%.
• Gold down 0.33 % and sit around $1725.15
• VIX down 4.68% to 34.4
• AUDUSD up 0.76% to 0.69192
• EURUSD up 0.60% to 1.13222
• GBPUSD up 0.55% to 1.2604
• NZDUSD up 0.43% to 0.64736
• USDCAD down 0.06% to 1.35720
• USDJPY down 0.03% to 107.332

Main Pairs Movement

The EUR/USD pair took the 1.1300 level, settling around 1.1315. The GBPUSD pair flirted with 1.2600 but remained below the level, as the UK and the EU confirmed that there would not be an extension to the transition period beyond December 31.

The Canadian dollar strengthened relatively quickly as a flurry of risk-on headlines hit the headlines during US session. The AUD/USD pair is trading near 0.6915, trimming intraday losses and setting at its highest in two days as Wall Street’s recovery offered support. RBA Meeting’s Minute is coming up soon.

Commodity-linked currencies advanced against the greenback, boosted by equities. Gold, on the other hand, closed the day unchanged reverting an early slump. Lastly, crude oil price edged higher, also backed by equities.

COVID-19 Data (EOD):

Technical Analysis:

 EUR/USD (H4)

EURUSD has been trading above 1.1250 throughout the day, up from the lows as the market mood improves. With the greenback coming under renewed selling pressure in the second half of the day, the pair gained traction and has risen more than 0.55% on the day. The bullish run is based on news that suggest the Fed will begin buying corporate bonds to support the market’s liquidity. As the EURUSD pair enters a consolidation, we expect the pair to fluctuate between 1.12145 and 1.13625.

Resistance: 1.1350, 1.1390, 1.1497

Support: 1.1230, 1.1185

XAU/USD (H4)

The XAUUSD went on a sharp recovery after hitting day lows in 1705 and regain around $25. The sudden boost was driven by the weakened USD as market sentiment began to anticipate a brighter future on Monday’s afternoon. Due to the fact that the concerns over new COVID-19 cases discovered in China and in several states in US, the market is likely to go under pressure if economy postponed its reopening. Under this circumstance, we believe the demands for safe-haven metal is going to support XAUUSD above 1705.

Resistance: 1746, 1755, 1765

Support: 1665, 1690, 1710

GBP/USD (H4)

The pound jumped from session lows against the dollar on Monday as the U.K. and E.U. agreed to intensify post-Brexit talks. PM stocked hopes that an outline could be reached by the end of next month. Sterling rose 0.37% to 1.26 the highest level from session low of 1.245.

Resistance: 1.2739, 1.2811

Support: 1.25425, 1.2485, 1.24515

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.

GOLD

Gold markets went on a rally during the week, wiping out the loss from the previous week. However, the market entered a phase of consolidation since Wednesday and has been going up and down between 1723 and 1745 for the remaining of the week. As a market that is quite volatile, the current gold’s fluctuation is enabling short-term traders to make a profit for themselves if they trade back and forth in the market. However, in the long-term, the current rally and consolidation is likely to extend upward.

Considering the fact that there are still plenty of macroeconomic reasons and data that can increase demands for the safe-haven metal, gold’s price will enter a bullish run. For example, with the concerns over the virus, the central banks around the world continue to devalue the paper currencies that they back, which would send gold price higher in the future.

A few upcoming indicators we should be aware of include intensified geopolitical relationships, economy re-openings, and vaccine developments. Although some analysts expect the gold to move towards the 1800 region, we believe the gold is going stay fluctuating unless a major risk averse event kicks in.

GBPUSD

GBPUSD started the week off strong by breaking above 1.2750 level momentarily but went downhill ever since. The sharp decline makes this week’s GBPUSD candlesticks look like an upside-down V. Although there appears to be a strong support at 1.25395, the strong plummet has penetrated the first layer of support on Friday, aiming towards the next support level at 1.24780.

We have witnessed a sharp turn of event in the US equity markets in the last two days of the week as markets begin to see a lot volatility and selling pressure when news regarding a second wave of pandemic have broken out. Therefore, due to the fact that the fluctuating market has concerned most of the investors, USD is currently more favored, which in turn, drags down GBPUSD.

There has yet to be a strong indicator that is driving the market besides the consistent threats posted by the virus outbreak; hence, it is unlikely to predict what the GBPUSD would perform down the road. However, if the pair breaks above the highs, it could be a continued impulsive move to the upside. And if the pair moves to the downside, it is likely that some sort of risk-off sentiment or event has taken place.

EURUSD

The EUR/USD pair continued to gain traction, and it rose to a weekly high of 1.14225 this week; however, the pair reversed the direction after testing 1.1402, plummeting toward 1.1250.

As ECB announced the stimulus plan and promised to avoid credit risks and defaults, the EUR/USD pair extended its last week’s bullish trend. Meanwhile, the majority of European countries seem to have a better handle on COVID-19 than the U.S. does; coronavirus cases and deaths remain depressed in Europe, thus being one of the factors to favor the Euro dollar.

Following the U.S. Federal Reserve Monterey policy announcement this week, the Fed decided to maintain the current rates until 2022, sounding the alarm of continuously weak economy. As a result, the three major U.S. stock indexes fell more than 5% on Thursday, the biggest one- day drop since March. At the same time, as the situation of COVID-19 does not seem to ease up in the U.S., the fear of a second COVID-19 wave can potentially hamper the U.S. economy. Consequently, all those factors drag the USD down.

Nonetheless, due to the risk-averse market environment, investors seek safety in the safe- haven greenback, driving the USD higher against the Euro later this week. Despite of losing the strength, investors prioritize the USD as the safety of principal over the Euro as the possibility of a higher return. As a result, the EUR/USD is down 1.56% to 1.12418 on Friday.

Moving ahead, Eurozone Industrial Production Data for the month of April is due to release; the data will essentially play a key role in determining the strength of the Euro next week.

AUDUSD

Aussie tried to regain 0.7 handle throughout this week, but failed to achieve so. Risk-on mood dominated trading earlier this week, demand for safe-haven dollar is being unwind. Market shrugged off astonishing upbeat Non-Farm Payroll figures, partially due to the data misclassification, May’s NFP was being overstated.

The Antipodean currency touched 0.7058, the highest price in 6 months, right after Fed decided to leave interest rate unchanged near zero. Powell promised to hold current interest rate until 2022, and expressed his pessimistic outlook on American labor market. Despite all the dovish comments from Federal Reserve, yet, it is too premature for Aussie to advance beyond 0.7 amid concerns of second wave of COVID-19 infection.

Risk appetite turned sour as market did not like Powell’s message of prolonging low interest rate. US stock market registered for the largest decline since March 12^th, and hopes for a sharp V-shaped economic recovery are fading. Commodity currencies like Australian dollar was particularly vulnerable, furiously plunged 2.04% during Thursday’s trading session.

Moving forward, RBA will release June meeting minutes next Tuesday, followed by Employment Change on Thursday and Retail Sales on Friday.

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

The Dow Jones Industrial Average extended its rout to 7%, with all of its 30 companies dropping. The S&P 500 slumped almost 6%, approaching the 7% threshold that would trigger an exchange-mandated trading pause. Airlines, cruise operators and travel companies that soared in recent weeks bore the brunt of the selling. Treasury 10-year yields fell to as low as 0.65% while the dollar jumped.

While much of the equity selling owed to the frantic pace of the recent rally, sentiment did sour as signs mounted that a possible second wave of the pandemic could be taking hold in some states. U.S. jobless claims remained high, underscoring the longer-term challenges caused by the pandemic. The report came out a day after the Federal Reserve provided a dour outlook for the economy.

Market Wrap

• Dow Jones down 6.9%, S&P500 up down 5.89% and Nasdaq up by 0.28%
• WTI July down by $4.07 to $35.86, and Brent Oil July up down $2.67 at $38.55 while near closing.
• Dollar Index up by 0.79%.
• Gold down 0.63% and sit around $1727
• AUDUSD down 2.1% to 0.68530
• EURUSD down 0.7% to 1.129
• GBPUSD down 0.79% to 1.2605
• NZDUSD down 1.53% to 0.6429
• USDCAD up 1.63% to 1.36294
• USDJPY down 0.81% to 106.851

Main Pairs Movement

The EURUSD is trading at daily lows and nearing the 1.1300 level as Wall Street’s collapse backed the demand for the safe-haven dollar. Fed’s echoes still taking their toll on financial markets.

A dovish US Federal Reserve undermined the market’s mood. US initial jobless claims for the week ended June 5 are foreseen at 1.55 million, causing USDJPY pair to struggle around 107.00 after hitting a fresh three-week low.

Gold attracted some buying interest near the $1722 pivotal zone and jumped to over one-week tops during the early North American session.

COVID-19 Data (EOD):

Technical Analysis:

USDJPY (H4)

A dovish US Federal Reserve undermined the market’s mood. Additionally, US initial jobless claims for the week ended June 5 are foreseen at 1.55 million, causing USDJPY to struggle at 107.00 after a fresh three-week low. Heightened concerns for the second coronavirus outbreak have driven the investors away from the risk assets, which in turn, indicates that the market mood has gradually transferred to a risk-off sentiment. As a result of that, we expect the pair to first find a support at the 106.77, but considering the fact that risk off sentiment has weighed on investors, it is likely that the USDJPY pair to turn south down the road.

Resistance:107.4, 107.86

Support: 106.00, 106.40, 106.75

USDCAD (H4)

After a couple weeks of trading in the lower areas, USDCAD has finally found its traction and has risen on Thursday. The main reason for this surge is because the general commodities weakness has pushed all the major commodities currencies to lower on Thursday. In particularly, as Oil dropped 8% in the early trading hours, the CAD immediately reacted to the weakened liquid gold, and hence triggered the pair to surge upward. We expect the pair to consolidate around 1.3650 regions and test the next resistance around 1.3688.

Resistance: 1.3688, 1.3840, 1.4154.

Support: 1.3327, 1.3385, 1.3475

GBPUSD (H4)

In the latest headlines said Brexit negotiations will now intensify with weekly talks throughout July and into early August in the hope of a breakthrough. Meanwhile, UK still suffering from relatively elevated COVID-19 cases and there are fears of the R-rate rising back above 1. UK economy is set to be the hardest hit among the world’s developed countries due to the pandemic.

Resistance: 1.268, 1.2739, 1.2811

Support: 1.25395, 1.2485, 1.23935

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.