Daily Market Analysis

Market Focus

U.S. stocks fell to reverse course on Tuesday, with the S&P 500 pulling back from a record high as investors monitored an early batch of corporate earnings results. Inflation was also back in focus as new data showed consumer prices surged by the most since 2008 in June. Dow Jones retreated 0.31%, or 106.93, to 34889, and Nasdaq declined 0.38%, or 55.59, to 14677.65.

Six months into his presidency, Joe Biden is revealing a hard-edged China policy that suggests relations between the world’s two biggest economies are only going to get worse.

A spate of U.S. actions in recent days — including a warning to American businesses in Hong Kong, new import controls for the Xinjiang region and talks about a digital trade agreement that would exclude Beijing — underscore that Biden plans to extend and deepen President Donald Trump’s more confrontational approach.

Biden administration officials say the U.S. strategy is a reaction to China’s own aggressive behavior. That stance will force tough choices for investors and companies caught in the middle of what Biden himself has defined as a defining battle of the 21st century, and may come as a surprise to those who expected a softer touch under the Democratic president.

“It’s very clear that the U.S. under the Biden administration is going to continue with the trend that we saw during the Trump administration and before,” said David Loevinger, managing director of emerging markets at TCW Group Inc. “There’s some disappointment — investors had expected a different approach.”

Beijing officials may have expected a difference, too, after the tumult of the Trump years. But in Washington, Biden administration officials point to a series of hostile actions by President Xi Jinping’s government that they say forced the U.S. hand, adding that the challenge now is to keep the relationship in the realm of competition, not conflict. Recent actions on both sides show how hard that will be to achieve.

Main Pairs Movement:

The dollar approaches its monthly high against most major rivals, boosted by climbing US inflation. The US Consumer Price Index was upwardly revised in June to 5.4% YoY, much higher than the expected 4.9%. The core reading also rose from 3.8% to 4.5%. The figures revived speculation about a tighter monetary policy, despite policymakers work hard on cooling down such expectations.

The euro pair reached a fresh multi-month low of 1.1780, holding nearby ahead of the Asian opening. Cable hovers around 1.3820, while the antipodean pairs near their yearly low, with Aussie at 0.7440 level and Kiwi below 0.7000.

Loonie extended further north regardless of higher oil prices. WTI moved above $75.00 a barrel amid expectations of a further draw in US inventories. Brent also climbed to $76.50 a barrel as speculation of tighter supply due to the OPEC+’s disagreement on higher output.

Gold prices were quite volatile after the release of US inflation figures, but the yellow metal is ending the day pretty much unchanged at around $1,808 a troy ounce.

The focus shifts to Semi-Annual US Fed chair Jerome Powell testifies, as well as RBNZ and Bank of Canada’s Interest rate decisions, and British inflation figures.

On the other hand, the coronavirus Delta variant is dominant in the Northern Hemisphere and the number of new cases is on the rise in the US and Europe. Fears about it delaying the economic comeback weigh on investors’ mood.

Cryptocurrencies act dully in recent days ahead the largest unlocking of Grayscale Bitcoin Trust share. On July 17, 16,240 bitcoin worth of GBTC becoming available to trade, and fears of a potential sell-off looms as Bitcoin has declined 4.35%, and Ethereum has fallen 9.3% since the start of the week.

Technical Analysis:

XAUUSD (Daily Chart)

From the technical aspect, the dominant trend remains bullish on the daily chart as it continues trading within the upper region of the bollinger band, even though it seems to enter into a consolidated phase recently. The upside momentum is favored by the positive MACD and the neutral RSI of 50, giving gold some potential to move further north. If the upside momentum is sustained, then gold is expected to move toward 1829; afterward, the momentum might confront pressures as it will reach the upper bound of the bollinger band. To the downside, if gold trades below the midline of the bollinger band, it will head toward 1770.

Resistance: 1829, 1876

Support: 1770, 1676

EURUSD (4- Hour Chart)

EURUSD heads toward 1.1800 region as the US dollar gains strength after the Core CPI data. On the 4- hour chart, intraday bias has turned to the downside as the price action is below the 20 and the 50 SMAs, indicating that the bulls vanish at the moment. Additionally, the double top pattern also confirms the bearish mode of the pair. From the technical indicator, current MACD is negative, which lends supports to bears; however, the bearish momentum looks to weaken at the moment as the RSI is near oversold condition, signaling that the bears might need a break before heading to the next immediate support at 1.1704.

Resistance: 1.1919, 1.1985

Support: 1.1837, 1.1704

GBPUSD (4- Hour Chart)

GBPUSD stablizes above 1.38 amid the US upbeat Core CPI and the UK’s reopening. From the technical perspective, the dominant trend for GBPUSD has turned into the downside as the double top pattern has been formed on the 4- hour chart. During the second peak, the RSI was not in the overbought territory; by this, it confirms a start of the bearish momentum for the pair. Moreover, the bearish momentum is also supported by a negative MACD while the pair is trading in the lower area of the bollinger band. All in all, GBPUSD is expected to head toward the next support level at 1.38; if a break of 1.38 is successful, then the pair has some potential to continue trade toward 1.3744.

Resistance: 1.3926, 1.4000

Support: 1.38, 1.3744, 1.3675

Economic Data

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To provide our clients with a wealth of trading options, VT Markets will launch new products on July 19, 2021.

The details as shown in the table below.

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

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Daily Market Analysis

Market Focus

US equities market broke record high as investors are optimistic about earnings season. The three big indices climbed around 0.35% on Monday. Financials shares led the gains within S&P 500 index, while Consumer Staples stocks lagged slightly behind. Large banks such as Bank of America, Goldman Sachs, and JPMorgan will kick off earnings season this week.

White House officials are proposing a digital trade agreement with Indo-Pacific economies including Canada, Japan, Malaysia, Australia, New Zealand and Singapore. Such agreement aims to curb China’s influence in the region, and get the United States back in the trade game in Asia. According to Bloomberg, the deal could set out rules on the use of data, trade facilitation and electronic customs arrangements.

ECB President Christine Lagarde told investors to buckle-up for new guidance on monetary stimulus in 10 days. She said that “given the persistence that we need to demonstrate to deliver on our commitment, forward guidance will certainly be revisited.” Lagarde also mentioned the current 1.85 trillion-euro bond-buying plan to run at least until March 2022, and hinted ECB might adopt fresh measures after the emergency bond program ends.

Main Pairs Movement:

US dollar was best performer among its G-7 peers as high inflation pressure continues to favor the greenback. The New York Fed’s Survey of Consumer Expectations for June indicates expected inflation over the next 12 months rose to 4.8%. Despite Fed’s effort to ease hyperinflation fears, but inflationary data are popping out from every corner in the economy, constantly rising skepticism on Federal Reserve’s transitory talks. Such anxiety will persist until investors see a deceleration in inflation tracked index such as CPI and PPI.

Gold price is sitting comfortably above $1800 amid worries of spreading delta variant. However, the mutated virus should not be a strong supporter to move the precious metal since health authorities around the World are much more capable to contain COVID-19 with the help of lockdowns and vaccines.

Oil prices retreated on Monday with the Brent and WTI futures dipped 0.52% and 0.62% respectively. Demand for crude oil was on a downhill in South Asian countries during nationwide lockdown. According to Bloomberg, Indonesian motor fuel demand will drop by 8% in the third quarter compared with May, while Malaysia will witness a plunge of 17% over the same period.

Technical Analysis:

XAUUSD (Daily Chart)

Gold remains depressed amid the US dollar’s strength; however, the downside seems limited. On the daily chart, gold hovers above the midline of the bollinger band during the American session. It seems that gold needs to condolidate before heading toward the resistance 1829; the near- term outlook remains bullish as the MACD is leaning up and the RSI reading is around 48, outside of the overbought region, giving gold spacious rooms to head upward. If gold successfully breaks its current consolidation, it is expected to see another pause around 1829 because 1829 is not only the resistance but also the upper bounce of the bollinger band, due to a bounce back.

Resistance: 1829, 1876

Support: 1770, 1676

EURUSD (4- Hour Chart)

EURUSD trades around 1.1850 level as the US dollar recovers strength. A new rise in Covid-19 cases and US inflation figures are awaited. From the technical perspective, the 20 simple moving average contains advances while EURUSD has bounced from the bullish 10 SMA on the 4- hour chart. In the meantime, the pair has breached the descending trend line, which indicates that the bullish momentum has been formed in the near- term. As the RSI reading falls outside of the overbought territory, the pair still has some potential to move further north toward its resistance at 1.1919.

Resistance: 1.1919, 1.1985

Support: 1.1837, 1.1704

GBPUSD (4- Hour Chart)

The British Pound slides toward 1.3870 against the US dollar as the UK might raise the restriction due to the rising cases of Covid-19. On the 4- hour chart, short- term outlook remains positive as GBPUSD still stays above the previous descending trend line, meaning that the bullish momentum still exists. The bullish mode is supported by a positive MACD as well as a RSI of 58, suggesting that the upside still has some potentials. It is expected to see the price action toward its resistance at 1.3926, then it will either consolidate or pullback as the RSI will likely to surpass 70 during that time. After, if a break of 1.3926 is successful, then it will head to 1.4000, a psychological resistance.

Resistance: 1.3926, 1.4000

Support: 1.38, 1.3675

Economic Data

Dear Client,

Warmly reminds you that the component stocks in the stock index spot generate dividends. When dividends are distributed, VT Markets will make dividends and deductions for the clients who hold the trading products after the close of the day before the ex-dividend date.

Indices dividends will not be paid/charged as an inclusion along with the swap component. It will be executed separately through a balance statement directly to your trading account, the comment for which will be in the following format “Div & Product Name & Net Volume ” .

Please note the specific adjustments as follows:

If you’d like more information, please don’t hesitate to contact trading@vtmarkets.com.

Daily Market Analysis

Market Focus

Stocks gained on Friday to set new all-time highs, shaking off declines from a day earlier as concerns over the pace of the economic recovery flared. S&P 500 added more than 1% led by the financials, energy and materials sectors that had been some of Thursday’s biggest laggards. Dow Jones (+1.3%, or +448.23) and Nasdaq (+0.98%, or 142.13) also set fresh record closing highs by the end of the session, taking out previous highs from earlier this week.

European Central Bank President Christine Lagarde told investors to prepare for new guidance on monetary stimulus in 10 days, and signaled that fresh measures might be brought in next year to support the euro-area economy after the current emergency bond program ends.

Speaking to Bloomberg Television days after the ECB raised its inflation goal to 2% and acknowledged it may overshoot the target, Lagarde said the July 22 Governing Council session — previously expected to be relatively uneventful — will now have “some interesting variations and changes.”

Lagarde said she expects the ECB’s current 1.85 trillion-euro ($2.2 trillion) bond-buying plan to run “at least” until March 2022. That could then be followed by a “transition into a new format,” she said, without elaborating.

Still, she dismissed the need to discuss when emergency stimulus might be wound down, saying she’s only “guardedly optimistic” about the recovery because the delta variant of the coronavirus poses a threat to efforts to resume normal life. While inflation will pick up this year, the central bank expects that to be temporary.

“We need to be very flexible and not start creating the anticipation that the exit is in the next few weeks, or months,” Lagarde said.

The approach sets the ECB apart from some of the world’s biggest central banks. U.S. Federal Reserve officials are already discussing when to start tapering their stimulus program as growth and inflation accelerate.

Main Pairs Movement:

Market sentiments turned positive ahead the end of the week, with the dollar weakened against most of its major rivals.

Cable gained 0.88% intraday and is hovering around the 1.3900 level as of writing. The euro pair claimed a mild gain, settling at 1.1875. Commodity-linked currencies advanced, with the CAD getting boosted by Canadian employment figures, as the country added 230.7K new jobs in June, largely surpassing expectations. The unemployment rate decreased from 8.2% to 7.8% while the Participation Rate increased to 65.2%. The antipodean pairs as well benefitted from the weak greenback. Kiwi bounced off the 0.7000 level, while Aussie climbed 0.91% to 0.7490.

Over the weekend, Japan´s top government spokesman said that the country is ready to pump more money into the economy to ease the pain of a prolonged pandemic and after announcing yet another state of emergency for Tokyo. JPY was the worst performer among the majors, dropping 0.33% against its American opponent.

US 10-year Treasury yields rebounded from Thursday’s low, settling at 1.36% after plummeting to 1.25%. Gold finished the week with modest gains at $1,808 a troy ounce. Crude oil prices also increased a bit, with WTI trading at $74.60 a barrel, and Brent at $75.50.

Technical Analysis:

XAUUSD (Daily Chart)

Gold battles 1810 level, having caught a fresh buying interest on the London fix and Fed’s semi- annual Monetary Policy Report. From the technical perspective, the near- term momentum has finally turned bullish since late May as gold has officially traded above the 20 simple moving average. If keeping up the momentum, gold is expected to head toward the resistance at 1829; however, if failing to stand steadily above the 20 SMA, then gold will head toward its support at 1770. On the daily chart, bulls are in control as the MACD has turned positve and the RSI has not reached the overbought territory, giving gold spacious rooms to move further north.

Resistance: 1829, 1876

Support: 1770, 1676

EURUSD (4- Hour Chart)

EURUSD climbs above 1.1850 as the greenback weakens and ECB President Lagarde does not specify the monetary policy. From the technical aspect, EURUSD has traded above the 20 and 50 simple moving averages during the American session, suggesting a reverse from bearish to bullish in the near- term. Additionally, the bulls are also supported by a positive MACD and the RSI of 60, signaling that the pair is on the way toward north. A break of the descending trend line also gives the pair an accelerating path to move upward. If the bullish momentum is kept, the pair is expected to trade toward the next resistance level at 1.1919. If the pair fails to hold above its current support at 1.1837, then the bearish momentum will be re- confirmed.

Resistance: 1.1919, 1.1985

Support: 1.1837, 1.1704

GBPUSD (4- Hour Chart)

GBPUSD marches toward 1.3900 level, shrugging off weak UK GDP report. From the technical perspective, the momentum has turned bullish in the near- term on the 4- hour chart as GBPUSD has breached the decending wedge, giving some hope for the bulls. The pair is expected to extend its bullish momentum toward 1.3926 as the MACD is positive and the RSI has not reached the overbought condition; however, the upside momentum might slow down or face an adjustment as the RSI of 64 is near the overbought territory.

Resistance: 1.3926, 1.4007

Support: 1.38, 1.3675

Economic Data

Daily Market Analysis

Market Focus

US equities retreated from all-time highs as the spread of delta variants weighed down on risk appetite. The S&P 500 index suffered the most, down 0.86%. Meanwhile, the Nasdaq 100 and Dow Jones Industrial Average index dropped 0.6% and 0.75% respectively. Cyclical sectors such as industrial and material had the worst performance within S&P 500 index on Thursday. The 10-year US treasury yield lost another 3 basis points, settled at 1.294%.

Pfizer Inc. will procced to request US emergency authorization after third dose vaccine data has showed significant improvement in protection against Covid-19. Study report from the company suggests a third dose of its existing vaccine is safe and can raise neutralizing antibody levels by 5 to 10-fold compared with the original vaccine.

The Tokyo Olympics Committee announced domestic spectators will be banned in events held in Tokyo prefecture. The difficult decision was made as Japanese Prime Minister Yoshihide Suga declared another extension of emergency lockdown to August 22. More than half of the 43 Olympic events, including the opening ceremony on July 23, are set to take place in Tokyo.

Main Pairs Movement:

Volatility spiked within the forex space on Thursday amid risk-off mood. The two safe-haven Japanese Yen and Swiss Fran were gaining traction, climbed 0.79% and 1.17% respectively. Recent resurgence in coronavirus cases revived the concerns of economic slowdown in the near term, thus prompted investors to seek protection. This also weighed down on commodity linked currencies such as the Aussie, the Kiwi and the Loonie.

The Euro was another currency that outperformed the US dollar on Thursday. The upbeat move was driven by higher expectation of inflation from the ECB. The central bank raised its inflation goal and signaled inflation can temporarily run above 2% target.

Gold reached as high as $1819, but gains were trimmed during US trading session, ended the day where it started. If equities market continue to decline in the next few days, we may see demand pick up in this precious metal.

Technical Analysis:

XAUUSD (Daily Chart)

After reaching the weekly high at 1818 price level, gold bounces back to 1797 during the American session amid the plummet of the US stock market. From the technical aspect, the short- term trend continues to be upward on the daily chart, re- confirming its bullish move after standing above the 20 simple moving averages around 1796. Moreover, the MACD has leaned positively upward, lending supports to the bulls; at the same time, the RSI has not reached the overbought territory, signalling that there are still rooms for the bullish momentum to move further. On the upside, a break of the current resistance at 1825 will bring gold to challenge 1860 afterward. To the downside, if current support level at 1796 can’t hold, then it will open a bearish path toward 1768.

Resistance: 1825, 1860

Support: 1768, 1733, 1676

EURUSD (4- Hour Chart)

EURUSD holds near 1.1830 after the ECB strategy announcement. From the technical perspective, EURUSD manages to advance above the bearsih trend line and above the 50 simple moving averages, heading north within positive levels. The dominant trend for the pair shifts to bullish even though the momentum is still downside in a bigger outlook. Short term bullish momentum is supported by a positive MACD and the RSI of 51 readings. To the upside, the pair is looking to move toward 1.1919 level; on the other hand, if the current support pivot at 1.1837 can’t hold, falling below the level and the trend line will confirm a reverse from bullish to bearish.

Resistance: 1.1919, 1.1985

Support: 1.1837, 1.1704

GBPUSD (4- Hour Chart)

GBPUSD remains under pressure below 1.3800 amid the dollar’s strength and the pandemic concerns. On the 4- hour time frame, the pound continues to behave weaker against the greenback. Bearish trend dominates as the pair still trades within the descending channel. From the technical indicators, even though the RSI is neutral at this point, the MACD extends its negative move, suggesting that GBPUSD is declining. The bearish momentum will be re- confirmed if the pair drops below 1.3733, where the previous lowest leg and the lower bound of the decending channel. If a break of 1.3733 level happens, then it will open an accelerating path toward the support at 1.3675.

Resistance: 1.38, 1.3926, 1.4007

Support: 1.3675

Economic Data

Daily Market Analysis

Market Focus

Stocks gained to end at records on Wednesday, closing out a choppy session higher after the FOMC’s June meeting minutes signaled a split on the timing for rolling back crisis-era monetary policies. The S&P 500 and Nasdaq (+0.01%, or +1.42) ticked up to reach record intraday and closing highs, led by a resurgence in growth and technology names. The Dow also rose for about 0.30%, or 104.42.

Biden set a goal for 70% of American adults to get at least one Covid-19 shot by July 4, a symbolic nod to Independence Day. Despite ample vaccine supplies, he missed that target, largely because the government has struggled to give away shots in rural, deeply conservative regions.

Now the delta variant is spreading. While it’s been found across the U.S., hotspots are erupting in less-vaccinated areas, like southern Missouri. As of June 27, for the first time since the U.S. started administering shots, the rate of Covid-19 hospitalizations in less-vaccinated places exceeded the rate in places with the highest proportions of inoculated people. 

The main concern about the vaccines is their side effect, to who refused to take. Southern Missouri is nowhere near Biden’s goal of 70% of adults with at least one shot, and even if it was, it might not be enough to stop delta, said Steve Edwards, president and chief executive of CoxHealth, which operates six hospitals in the region.

Main Pairs Movement:

The dollar index closed in the green Wednesday but retreated part of its gains ahead of the close due to the dull FOMC Minutes. The document showed that Fed officials consider the standard of “substantial further progress” needed to adjust monetary policy hasn’t yet been met, added that various FOMC members judged the risks to their inflation projections were tilted to the upside. In general, the document didn’t offer any fresh insights regarding the timing of tapering but showed that some policymakers saw the uncertainty around the economic outlook elevated after the latest data.

The euro pair settled at 1.1790 amid the lower-than-expected Germany industrial data. Loonie stretched further north, trading at 1.2488 as of writing. The antipodean pairs headed to the different directions as Aussie dropped to the 0.748 level, while Kiwi managed to close with mild gains at 0.7015.

Cable ended the day with a slight uplift while the UK reported over 32k new coronavirus cases, the biggest one-day increase since late January. However, the number of those falling into critical conditions or dying is low, reflecting the effectiveness of the immunization campaigns. There is no news so far suggesting restrictive measures will maintain after July 19.

US 10-year Treasury yields remained under selling pressure, hitting an intraday low of 1.29%. Gold prices are up for a sixth consecutive day, with the bright metal trading at around $1,804.00 a troy ounce as the US session came to an end. Crude oil prices came under strong selling pressure on Wednesday, with the US benchmark hitting a fresh two-week low of $71.05 a barrel, its lowest since mid-June. WTI recovered ahead of the close and settled at $72.00. Brent trades at $73.24 at the moment.

Technical Analysis:

XAUUSD (Daily Chart)

Gold hovers around 1800 level ahead of the FOMC meeting’s minutes and falling Treasury yields. From the technical aspect, the dominant momentum looks to shift to the bulls in the near- term as the consecutive days of positive moves have formed an uptrend. Moreover, a successful break of the resisatance at 1802 and the midline of the bollinger band give gold some hope for the bulls. Even though gold still trades below the 50 simple moving averages, there are some potential for gold to continue moving upward amid a postive MACD and a neutral reading of RSI. In order to re- confirm gold’s bullish momentum, gold needs to break the next immediate resistance at 1829.14.

Resistance: 1829.14, 1876.18

Support: 1802, 1771.95, 1676.89

EURUSD (4- Hour Chart)

EURUSD tumbles around 1.1800, the lowest level since April ahead of the FOMC Meeting. From the technical perspective, after failing to hurdle the resistance level at 1.1837 during the European session, the dominant outlook of EURUSD looks bearish on the 4- hour chart. Additionally, the downside is also supported by the negative MACD while the pair trades well below the 20 and the 50 simple moving averages. The pair is expected to continue extending further south toward 1.1704; however, it might consolidate a bit before the decline as the RSI reading is nearly oversold.

Resistance: 1.1837, 1.1919, 1.1985

Support: 1.1704

GBPUSD (4- Hour Chart)

GBPUSD advances modestly, making little progress as an immediate reaction to the FOMC Meeting. On the 4- hour chart, GBPUSD clings above 1.3800 level during the American session. The near- term outlook looks to turn positive because the pair has breached the descending trend line, signaling a reverse from bearish to bullish. The bullish momentum will confirm if the pair can eventually trade above the 20 simple moving averages and the midline of the bollinger band. As the time of writing, the technical indicators, both the MACD and the RSI, seem to lack of directional strength as they are both in the neutral position.

Resistance: 1.3926, 1.4007

Support: 1.38, 1.3675

Economic Data

Daily Market Analysis

Market Focus

US equities declined as low 10-year Treasury yield weighed down on risk-sentiment. The S&P 500 and Dow Jones Industrial Average index fell 0.2% and 0.6% respectively. Meanwhile, the tech heavy Nasdaq index closed at another record high, climbed 0.4%. The 10-year Treasury yield dropped to lowest point since February, traded at 1.351%. Sarah Hunt, a money manager at Alpine Woods, commented that 10-year yield below 1.45% had people worried about a potential economic slowdown.

Investors are growing concerns of where oil price will go after OPEC+ abandoned their Monday meeting. The two big players Saudi Arabia and the UAE had dispute over an extension of output agreement to 2022. The immediate consequence of the collapse in talks is that output hike expected for August won’t take place, leaving the fuel market short of barrels. However, over the medium term, current six-year high oil price at mid-$70s may prompt oil-rich nations to pump more.

Reserve Bank of Australia kept benchmark rate unchanged on Tuesday, and here is Bloomberg’s key takeaway from RBA’s monetary statement:

• The central bank announced a pared-back extension of its QE program and expects interest rates at record low for at least another two-and-a-half years.

• Purchase of longer-dated securities is lowered from A$5 billion a week to A$4 billion a week to at least mid-November.

• RBA will not increase the cash rate until actual inflation is sustainably within the 2% to 3% target range.

Main Pairs Movement:

Aussie and Kiwi advanced as much as 0.92% and 1.14% respectively prior to US session, but all the gains were pared and both pairs closed in the red. Other G-7 currencies followed a similar path except the Japanese Yen. Tuesday’s rise in dollar greenback was somewhat peculiar given a big miss in June’s ISM Non-Manufacturing PMI, printed 60.1 compared to anticipated 63.5, and was declined from May’s 64. Perhaps speculators are positioning for a more hawkish FOMC meeting minutes for June, which may justify why Gold fell sharply from $1815 to $1790, and the 10-year Treasury yield lost 7 basis points as US session kicks in.

UK Prime Minister Borris Johnson announced on Monday that the government will proceed with the final stage of easing lockdown restrictions on July 19th. The government is aware of potential pick up in infections after fully reopened, but is also confident that NHS will be able to handle the situation than before. This may mitigate some downside risk for the Sterling if dollar were to strengthen on Wednesday’s FOMC meeting minutes.

Technical Analysis:

XAUUSD (Daily Chart)

After jumping to fresh three weeks highs at 1810 level, gold pullbacks during the American trading session. On the daily chart, gold remains downside as it continues trading below the 50 simple moving averages and the descending trend line. Despite of showing some bullish hope on the intraday bias, today’s bounce back from the midline of bollinger band seems to discourage the bulls. From the technical indicator, the MACD has slightly turned back to negative, suggesting that the bears might show some potential at this point. At the same time, the RSI has not reached the oversold territory, giving the bears rooms to move further.

Resistance: 1829.14, 1876.18

Support: 1771.95, 1676.89

EURUSD (4- Hour Chart)

EURUSD declines near 1.1800 level as the US indexes are sharply lower, suggesting the demand for the greenback. From the technical aspect, the intraday bias turns bearish because the pair has tackled the 20 and the 50 simple moving averages. In addition, the break of the support level at 1.1837 gives the pair some potential to the downsie testing the next support at 1.1704. The dominant trend is bearish as the MACD has turned negative whilist the RSI has not reached the oversold territory, providing bears rooms to extend further south.

Resistance: 1.1837, 1.1919, 1.1985

Support: 1.1704

GBPUSD (4- Hour Chart)

GBPUSD suffers downside pressure toward 1.3780 amid some legal action against Brexit and the decline of the US bond yields. From the technical perspective, the dominant trend turns to the downside on the 4- hour chart as the pair falls below the 20 SMA and below the support level at 1.38. Moreover, previous short- term bullish momentum has been diminished as the pair bounces back to the descending trend line. The bears are supported by the negative MACD and at the same time the RSI of 43 suggests that the bearish momentum still have potential to continue, heading toward the next support at 1.3675.

Resistance: 1.38, 1.3926, 1.4007

Support: 1.3675

Economic Data

Dear Client,

Warmly reminds you that the component stocks in the stock index spot generate dividends. When dividends are distributed, VT Markets will make dividends and deductions for the clients who hold the trading products after the close of the day before the ex-dividend date.

Indices dividends will not be paid/charged as an inclusion along with the swap component. It will be executed separately through a balance statement directly to your trading account, the comment for which will be in the following format “Div & Product Name & Net Volume ” .

Please note the specific adjustments as follows:

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Daily Market Analysis

Market Focus

US equities advanced forward as upbeat job report ease concerns of an early Fed tapering. The S&P 500 and the Nasdaq index both made record high, climbed 0.75% and 1.15% respectively. The S&P 500 had a seven-days winning streak, and marked the longest rally since last August. Technology and Consumer Discretionary shares gained the most within the S&P 500, whereas Financials fell slightly behind. The 10-year Treasury yield dropped 3 basis points to 1.429%.

Friday’s US job report was a Goldilocks scenario for stocks market. The Non-farm payroll number printed 850,000 compared to consensus’s 700,000, good enough to signal a healthy recovery in labor market. However, the Unemployment rate, a top priority of Federal Reserve, dropped 0.1% from May’s 5.8%, suggesting the Fed is still distance away from full employment, thus unlikely to pull liquidity away from the financial market in the near term.

Talks between oil-rich nations are stuck. Saudi Arabia along with other OPEC+ members proposed an increase production over the coming months and extend a broader agreement in output until the end of 2022 for the sake of stability. However, UAE opposed to such extension, and demanded better deal for itself for 2022. The UAE asked for 3.8 million barrels a day under an extension, the current level is set at about 3.2 million barrels a day. According to Bloomberg, Saudi Arabia and Russia have rejected re-calculating the output target for UAE, fearing that everyone else would ask for the same treatment. Negotiation is scheduled to resume on Monday.

Main Pairs Movement:

Non-US currencies recovered part of their losses against the dollar upon Friday’s job report. The decline in unemployment rate in United States will help to moderate recent dollar strengths, but it provides little incentive to shift from a bullish dollar as its economic recovery remains robust. Moreover, the structural resistance line in the dollar index also contributed to a pullback, reached highest point of 92.63 since April.

Gold rebounded from $1760 support line to $1795 during a three-day rally. The precious metal has been rejected from $1795 since June 18th, indicating the upward momentum lacks follow up buys. We expect a continuation to the downside given the fading demand for inflation hedging, as well as an absence of any major risk events.

Oil prices may recede from multi-year high if Saudi Arabia and its allies can’t seal a deal with the UAE on Monday. The Canadian dollar could also be impacted given its large exposure to the oil export, thus USDCAD could shoot up significantly under strong dollar and possible oil retreat.

Technical Analysis:

USDJPY (4- Hour Chart)

After rising to the highest since last year, USDJPY weakens desipte of NFP surpasses expectations. From the technical perspective, USDJPY meets a tough resistance level at 111.65; however, the bias remains bullish as the pair continues to trade within the ascending channel, at the same time, the pair trades well above the 20 and the 50 simple moving averages. Today’s retreat can be seen as an adjustment for the pair since the RSI reading was above the 70, the overbought territory on the 4- hour chart. As the time of writing, the RSI has dropped below 70, signaling that the gain might be triggered again, heading to test the resistance at 111.65.

Resistance: 111.65

Support: 110.92, 110.475, 110.10

EURUSD (4- Hour Chart)

EURUSD hovers below 1.1850 after the release of the better than expected US Nonfarm Payrolls. On the 4- hour chart, EURUSD continues suffering from downside momentum, trading below the 20 and the 50 SMAs. The pair settles below the resistance level at 1.18615. To the downside, if the pair fails to bounce back, trading above 1.1837, then the pair will move towards the next major support at 1.1704, the lowest since April. On the upside, in case the attempt to trade stably above 1.1837, the pair will head towards the psychological resistance at 1.1900 and 1.1919.

Resistance: 1.1837, 1.1704

Support: 1.1919, 1.1985

GBPUSD (4- Hour Chart)

GBPUSD bounces above 1.3800 amid the Delta virus variant worries. After falling below the support level at 1.3793 on the previous day, GBPUSD retreats above the level today as the time of writing. However, the outlook bias remains downside as the pair continues trading below the 20 and the 50 simple moving averages; at the same time, the pair continues trading near the descending trend line. All in all, the bearish momentum is still in control. To the upside, the pair will have a chance to turn bullish on the 4- hour chart if a break of 1.4007 is successful, where the 100 SMA is. The RSI is currently outside of the overbought territory, giving the pair rooms to extend further north.

Resistance: 1.4007

Support: 1.3793, 1.3675

Economic Data