Dear Client,

In order to provide you with a better user experience with VT Markets, we are glad to announce that we will upgrade our MT4 software and server to version 1335 on June 19, 2021 (Saturday), so as to ensure a better trading experience.

If your software version has not been updated yet, we sincerely recommend that you upgrade to the latest version (1335) after June 19, 2021.

The steps to check your MT4 software version are as follows:
PC: Open the MT4 software Help -About;
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For PC users, please uninstall the software and install the latest version from the following link:
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If you’d like more information, please don’t hesitate to contact trading@vtmarkets.com.

Daily Market Analysis

Market Focus

US equity market dropped as Federal Reserve is actually more hawkish than market expected. Though the initiation of tapering talk is widely anticipated, but two interest rate hikes by the end of 2023 reveal by the dot plot had investors surprised. The Nasdaq 100 and Dow Jones Industrial Average index lost 0.34% and 0.77% respectively. All sectors closed in the red within the S&P 500 index except for Consumer Discretionary shares. The 10-year US Treasury yield surged 7.5 basis points to 1.57%.

The Federal Reserve kept interest rate unchanged, and here are Bloomberg’s key takeaways from the FOMC statement and Chair Jerome Powell’s press conference:

Main Pairs Movement:

Euro is the second worst performing currency against the dollar on Wednesday, the first being Swiss Franc, plunged 0.97% and 1.11% respectively. The Fed has turned from extreme dovish to slightly hawkish, and will finally start to kick off the long-expected tapering talks in forthcoming meetings. Given ECB’s plan to bulk up monetary and fiscal spending in the second half of 2021, this officially marks the divergence between Federal Reserve and European Central Bank. The outlook for Euro is not so bright in the 2H20.

Cable also fell 0.6% amid strengthening dollar. Today’s plunge is more likely a temporary shock to the Sterling rather than a long-term bearish trend like the Euro. Speculators are still factoring in the delayed of reopening from the Britain. However, we don’t think this delay will prolong into the summer given UK’s successful vaccination campaign. Once the delta variant concern is taken off the table, the UK economy will steer in full speed. An optimistic and hawkish BoE will continue to underpin the Pound, ad it is highly possible that they will act ahead of the Federal Reserve in easing QE.

Technical Analysis:

GBPUSD (Daily Chart)

Cable finally exited its consolidation phase from downside. After trapped within a tight range between 1.42 and 1.408 for more than a month, the bears are set to seek gains in the south. Price promptly plunged toward the ascending trendline after FOMC statement release, and was finding support around 1.402 as of writing. Further on the downside, an immediate horizontal resistance would be the big 1.4 round number, followed by May’s low of 1.38, and 1.367.

Resistance: 1.42, 1.437, 1.464

Support: 1.4, 1.382, 1.369

XAUUSD (Daily Chart)

XAUUSD continues to head south after penetrated the 2-month ascending trendline and DMA20 dynamic support. The yellow metal breached below 61.8% Fibonacci level of $1850, which previously defended bears’ attack. Closing below this level could open doors for sellers to capitalize on large downside space, where we might witness February’s huge plummet in gold price given the lack of inflation-hedge demand post FOMC meeting. On the downside, $1815 will be the next key level to watch for.

Resistance: 1890, 1920, 1960

Support: 1815, 1780, 1743

USDCAD (Daily Chart)

USDCAD is undergoing a U-shape recovery after price was extremely subdued for the past two-months. However, it is not completely out of the woods yet since a big downward trendline still hangs above current price level, we need to see a solid breakout from the trendline to confirm a bullish reversal in USDCAD. In the near term, this pair looks to contest 1.23 hurdle, and failing to overcome this level could put the bears back into the driver’s seat as the persistent higher oil price always bolsters the Canadian dollar.

Resistance: 1.23, 1.25, 1.264

Support: 1.2, 1.1925, 1.18

Economic Data

Daily Market Analysis

Market Focus

US stocks retreated from their peaks after the retail sales missed the expectations. Tech shares closed in the red, with the Nasdaq 100 dropped 0.71%, and Dow Jones declined 0.27%. Energy shares gained traction, but still could not lift the S&P 500 index as Real Estates and Tech stocks dragging behind.

Investors remained calm ahead of Fed’s policy decision. The statement is set to include updated forecasts, and communication of any taper plans well in advance. “After nearly a year of anti-climactic FOMC meetings, tomorrow’s meeting has the potential to move markets because it will likely start the process of the Fed communicating tapering of this historic accommodation,” commented Tom Essaye former Merrill Lynch trader.

China called the US “very ill indeed,” after President Joe Biden formed an anti-China ally during his Europe trip. China Foreign Ministry spokesman Zhao critized Biden’s efforts to counter China’s global economic expansion and told reporters “The G-7 had better take its pulse and come up with a prescription.” Tension continues to mount between the developed nations and the rising giant, though no actions are taken so far, but such development worries investors.

Main Pairs Movement:

Market turned cautious after the US depressing retail sales figures and the better-than-expected PPI. Investors focus on news about the Delta variant of COVID and uncertainty US infrastructure as the Fed’s decision approaches. Cryptos are struggling to cling gains.

The dollar index performed well heading into the US opening but turned sour after the release of the macros, closing the day mixed. The swissy and the fiber are unchanged against its American rival, as well as the Japanese Yen, while the loonie and the sterling declined significantly.

US 10-year Treasury yields has breached 1.50% after US retail sales release, seemingly consolidating its previous gains. The UK and Canada CPI and industrial output also stand out on the economic calendar, along with the New Zealand GDP.

Oil price edged further north. WTI traded at $72.5, and Brent traded at $74.24, both recovering to the past-pandemic price level. Gold continues to fall, traded at $1858.82 as of writing.

Cryptos seems experiencing a correction. Bitcoin surged to $41330 earlier today, and rapidly dropped below $40000 within two hours, and Ethereum slightly decreased toward its $2,500 support after it bounced off $2,600.

Technical Analysis:

GBPUSD (Daily Chart)

GBPUSD has declined for three consecutive days, and the selling pressure seems still strong. The MACD histogram remains bearish, while the RSI indicator fell under 50. Sterling fell short for demand despite the goodish UK employment report as analysts are worried about the delay of the lockdown program forcing some struggling businesses to lay off. On the other hand, though Fed is supposed to remain monetary policy unchanged, a less dovish statement are still possible given the upbeat inflation figures, and this may further dragged the pair down. The instant support for cable appears at 1.40, followed by the quarterly low, 1.367.

Resistance: 1.424, 1.438

Support: 1.40, 1.367

USDCAD (Daily Chart)

After three consecutive week’s consolidations, USDCAD finally broke through the 1.2 to 1.215 interval. Similar to other major pairs, the breakthrough of the loonie derived from the expectations of a slightly less dovish Fed after the US greater-than-expected inflation figures poped up. The MACD histogram appears bullish, while the RSI indicator has just consolidated in the buy-side territory.

However, pressure from the rising oil price is still a concern, adding that the policymakers’ attitude toward the higher inflation is still unclear, a solid rebound is still questionable. The FOMC press conference that takes place this Wednesday will provide further instructions from the officials. The best strategy is to stay positive but prudent before that.

Resistance: 1.225, 1.2367

Support: 1.215, 1.20, 1.192

AUDNZD (Daily Chart)

AUDNZD was rejected by the 1.081 resistance last Friday and slipped below 1.080 at the beginning of the week, traded 1.0794 as of writing. The Australian dollar got slightly weaker on the dovish RBA meeting minutes as the policymakers suggested no rush to taper, albeit emerging reflation.

However, due to the technicals, the bullish sentiment seems to resume a little more time, as the RSI indicator still haven’t reached the overbought territory, and the MACD histogram remain positive. The strong 1.081 resistance level is the key. If breached, then, at least in the short term, the upside traction will still prevail.

Resistance: 1.081, 1.0945, 1.1045

Support: 1.060, 1.054, 1.042

Economic Data

Dear Client,

To provide our clients with a wealth of trading options, VT Markets will launch new products on June 21, 2021.

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

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

Daily Market Analysis

Market Focus

US stocks market was mixed as investors were adjusting positions to Thursday’s Federal Reserve meeting. Tech shares were gaining traction, with the Nasdaq 100 up nearly 1%, they also helped the S&P 500 to close in the green. Meanwhile, Financials dropped as JPMorgan Chase CEO Jamie Dimon suggested Wall Street’s trading prosperity in the pandemic era may fade away.

US President Joe Biden entered his first international summit looking for a breakthrough on vaccine pledges for developing countries, and a unity action to counter China’s economic might. US officials said the G-7 group is now a united ally to fight against China on issues such as forced labor and human rights abuses, and to stand up to an alternative to China’s Belt and Road plan to counter Chinese influence abroad.

US consumers expectation for inflation rose to 3.6% over the medium term, refreshed an eight year high in May, according to the Federal Reserve Bank of New York survey. “Notably, medium-term inflation expectations have increase at a slower pace than short-term inflation expectations over the past few months, and the difference between one- and three-year-ahead median inflation expectations marks a series high,” officials from New York Fed said in a press release.

Main Pairs Movement:

Gold plunged as much as 1.7% during the first day of the week. Money managers are paring their long positions in the futures market ahead of Thursday’s FOMC meeting. Judging from market reaction to last week’s CPI figures, investors seemed to believe current inflation spike is temporary and will ease over the second half of 2021. Of course, the Fed will factor in market reaction when considering how they should play the script. With market participants are more in line with the central bank proposed transitory inflation theory, we are unlikely to see any big surprise on Thursday. That being said, the Fed would still be guiding the market to where they desired by giving out little hints in FOMC statement, or adjusting their portfolio holdings (small enough to not cause any ripples across stocks and bond market while sending a signal).

Cable is on the back against US greenback amid lockdown extensions, dipped 0.05%. British Prime Minister Boris Johnson announced on Monday that reopening will be postponed to July 19th. Though the negative headline is much expected, it still keeps the pressure on the Sterling compared to other G-7 currencies.

Technical Analysis:

EURUSD (Daily Chart)

EURUSD exits from consolidation mode and enters a bearish trend. Price failed to reclaim 1.22 in last week, we have seen five rejections from 1.22 before it turns south. Market is perhaps pricing in a more dovish ECB than its US counterpart given Christine Lagarde’s speech on EU’s forthcoming larger spending. We do not rule out potential price recoveries or sideway trading prior to Thursday’s FOMC meeting. If the Fed’s message is affimative then the bears should not have too many troubles at taking out 1.21 horizontal support, which would open doors to 1.2 and 1.195.

Resistance: 1.22, 1.235

Support: 1.21, 1.204, 1.195 

XAUUSD (Daily Chart)

XAUUSD finally made a decisive breakout, and it was in favor of the sellers this time. Price penetrated the 2-month ascending trendline, along with its DMA20 support line. However, it quickly bounced off upon touching 38.2% Fibonacci level at $1846. Today’s move indicates bearish reversal, which makes sense when considering investors are gradually buying into Fed’s rhetoric of transitory inflation. With market expecting the Fed to maintain easy monetary policies and not initial the taper talk during June’s meeting or even during the whole summer, Gold is likely to suffer until another impetus shows up. On the downside, $1815 will be the next key level to watch for.

Resistance: 1894, 1959, 2000

Support: 1846, 1822, 1790

USDJPY (Daily Chart)

USDJPY is building on last Friday’s goodish rebound, climbed 0.35% on Monday. This pair is well fitted within its ascending channel and managed to regain 110 handle. Now there is a solid breakout to the upside, the buying bias will be here to stay until meeting yearly high of 110.8. On a larger timeframe, USDJPY stills shows a bullish trend after April’s pullback is proved to be temporary. Further in the north, stern resistance sits around 112 and 113.8.

Resistance: 110.8, 112, 113.8

Support: 108.7, 107.9, 106.7

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 stocks climbed to record high as investors are shifting to believe Federal Reserve will maintain accommodative policies in upcoming months. The Nasdaq 100 Index gained more than 1%, while the Dow Jones Industrial Average index was up only 0.06%. S&P 500 closed 0.47% higher with Health Care shares led the gains, and Financials were underperforming.

Commerce ministers from China and the US agreed to push forward trade and investment links. While the two nations are slowly resuming official contact after Joe Biden took office, it is still unclear what the US plans to do with the so-called ‘Phase One’ deal signed last year. “It’s positive in the sense that both countries are stepping up economic and trade communication, but no game-changing decisions or announcements have come out yet, I won’t be overly excited,” commented Alvin Tan, head of Asia currency strategy at RBC Capital Markets LLC.

The Basel Committee on Banking Supervision is putting the strictest capital requirement for holding crypto assets on banks’ balance sheet. The panel proposed that a 1,250% risk weight be applied to bank’s exposure, meaning banks need to hold a dollar in capital for each dollar worth of crypto asset under the current 8% minimum capital requirement. The Committee is deeply concerned that the growth in these volatile assets could jeopardize global financial stability, thus the required capital will need to be sufficient to absorb a full write-off without exposing depositors and other senior creditors of the banks to a loss.

ECB kept policy rate unchanged, and here are Bloomberg’s key takeaways from its policy statement:

Main Pairs Movement:

EURUSD was on the back foot against the dollar greenback despite dollar negative mood. The Euro weakness could come from ECB’s announcement of larger monetary spending. Meanwhile, US CPI (MoM) in May climbed 0.6%, the second-largest advance in more than a decade. The inflation gauge showed steady growth in the costs of used vehicles, house, airfares, and apparel. According to the Labor Department, the rapid rise in used car prices account for 1/3 of total monthly advance in CPI. The Core CPI which excludes volatile food and energy rose 3.8% on a year-over-year basis, the highest number since 1992. A better-than-expected inflation should press Federal Reserve to start tapering sooner, which bolsters the US dollar. But since we saw quite the opposite reaction in the market, it rather implies investors are buying into Fed’s transitory inflation narrative and dollar bearish bias could resume from here.

Cable temporarily put behind some of its concerns and ride with dollar weakness, gained 0.4% on Thursday. Aside from EU’s disagreement over the implementation of the Northern Irish protocol, UK is also facing a possible delay of its reopening. The Delta variant is finding its way to spread around the unvaccinated, the highly anticipated ‘Freedom Day’ will likely be postponed from June 21st to early July.

Technical Analysis:

NZDJPY (Daily Chart)

NZDJPY is still supported by 78.6% Fibonacci level around 78.7. Most of the gains from RBNZ hawkish shock have been erased by choppy trading sessions in the past two weeks. Price is retesting an upward trendline started from last November, and will likely cling to it given current uninspired market sentiment. A strong deviation to the upside is needed to keep the bullish bias alive. In the north, the nearest resistance sits around 80.1, next to 81.1.

Resistance: 80.1, 81.1, 82.2

Support: 78.7, 76.84, 75.5

USDCHF (Daily Chart)

USDCHF failed to extend beyond 0.899 as SMA20 remains to be a solid cap on this pair. There was a false breakout on SMA20 and it went straight to contest soft resistance at 0.904, but upward momentum quickly faded amid a lack of follow up demand. With the bears are back in the driver’s seat, USDCHF looks to close the day with a lower-low, which could provide an exit to recent consolidation phase. To the south, the immediate support lies around 0.885, followed by six-years low of 0.878.

Resistance: 0.904, 0.908, 0.916

Support: 0.885, 0.878

XAUUSD (4-Hour Chart)

Gold briefly touched $1870 after US CPI release, then quickly reversed back above $1890. We witnessed yet another strong defense from gold buyers, price did not even have a chance to pass the ascending trendline. Worth mentioning SMA20 is still a valid dynamic support line for the yellow metal. However, we are somewhat cautious on the direction of Gold in the near term given today’s positive correlated move in stocks and gold. Investors should be prudent to wait for a clear breakout, which could be provided by next week’s FOMC meeting.

Resistance: 1922, 1956, 2000

Support: 1870, 1890, 1847

Economic Data

Dear Client,

Please note that adjustment on following products due to Queen Birthday and Youth Day.

If you have any questions, our team will be happy to answer your questions.Please mail to trading@vtmarkets.com or contact the service online.

Daily Market Analysis

Market Focus

US equity market was quiet on Tuesday as investors are waiting for the big CPI release on Thursday. The three big equity indices moved less than 0.1% at the end of the day. Meanwhile, the 10-year Treasury yield fell to the lowest in a month, trading at 1.536%.

The economist who helped to shape Federal Reserve’s long-run inflation expectations says central bank needs to get their hands on cutting back its massive bond-purchase program. Brian Sack, former head of Fed Board of Governors two decades ago, says the so called 5Y 5Y forward breakeven inflation rate climbed to a level where further increases would be problematics for the central bank. The mentioned rate reached a seven-year high last month of 2.55%, which implies market participants expect inflation to be 2.55% in the next 5 years on average. Debates over inflation is heating up with economists like Lawrence Summers warns Biden’s infrastructure plan will overheat US economy, but Treasury Secretary Janet Yellen suggests the package wouldn’t be enough to cause an inflation over-shoot.

US is easing its travel advisories on many nations, including Canada, France, and Germany. The CDC lowered 61 countries from a ‘level 4’ discouraged all travel to a ‘level 3’ recommending travel under full vaccination, and 50 countries and territories from ‘level 2’ to ‘level 1’.

The Internal Revenue Service (IRS) asks Congress to authorize data collection on cryptocurrency transactions valued over $10,000. IRS’s Chief Charles Rettig estimates around $1 trillion tax generated in crypto space escapes from IRS each year. Perhaps a much urgent need for the data probing power is to crack down illicit usage of these digital currencies, which have been demanded increasingly by perpetrators of ransomware attacks on corporate computer networks.

Main Pairs Movement:

Moves in the forex space was dollar driven, with the dollar up and other currencies down. Volatility is extremely depressed as traders await for the Federal Reserve to throw something new at the market, until then, most pairs will stay in tight range.

Yen is the worst performer among the G-7 group so far this year. It depreciated 6% against the US dollar, 6.5% against Aussie, 7% against Kiwi, and 11.3% against the Canadian dollar. With developed economies racing to completely eliminate COVID-19, Japan is lagging significantly behind. ‘Only 2.8% of the population has received at least one vaccine dose, and just 1% have had both shots of vaccine,’ according to Forbes. Japanese government is having a hard time carrying out their inoculation plan due to wide distrust of immunizations, which have been rooted within the country for decades. That being said, we will not be surprised to see further extension of emergency lockdowns and a postpone to summer Olympic game. As domestic recession lingers, Japanese investors are set to expand their search for yields abroad, and companies seek expansions in merger and acquisition overseas. These money outflows could further weigh down on the Japanese Yen.

Technical Analysis:

EURUSD (Daily Chart)

EURUSD broke a two-month ascending trendline from downward, and the move was triggered by upbeat ADP data released last Thursday. The fact that the miss in NFP itself did not put the Euro back above the trendline showed traders are perhaps leaning towards a dollar favourable environment in coming weeks. As of current, price is capped by 23.6% Fibonacci level at 1.22, which belongs to a broader consolidation range between 1.225 and 1.217. We expect trading to be sideways until Thursday’s US CPI tells otherwise.

Resistance: 1.22, 1.235, 1.246

Support: 1.21, 1.203

EURCHF (Daily Chart)

EURCHF is well placed within a downward tunnel since March. After rejected by big 1.1 hurdle, price now looks to contest another round number of 1.09, which marks the 28.2% Fibonacci level. We saw this pair had a decent W-formation, but failed to extend above 1.1, which prompted sell orders to pile in and validated a bullish reversal was immaterial. Bears should still be dominant in the medium term. Further on the downside, EURCHF could hit the lower-bound of a descending tunnel if 1.1 is breached.

Resistance: 1.1, 1.112

Support: 1.09, 1.074, 1.067

AUDNZD (Daily Chart)

AUDNZD recovered most of its loss from previous RBNZ’s hawkish shock. The antipodean pair managed to regain 1.072 on Tuesday. We thought defense at 1.072 could be stronger given the confluence of SMA20 and a horizontal resistance line. That being said, it is not far away from a previous trendline, which now could act as a dynamic resistance. We are sticking with our bearish view on this pair given a relatively more hawkish stance from RBNZ and better economic prospect in New Zealand. The jobless rate in New Zealand was 4.7% compared to 5.5% in Australia.

Resistance: 1.08, 1.1

Support: 1.065, 1.052, 1.04

Economic Data

Dear Client,

New contracts will automatically rolled-over as follow.

Please note:

• The rollover will be automatic, and any existing open positions will remain open.

• Positions that are open on the expiration date will be adjusted via a rollover charge or credit to reflect the price difference between the expiring and new contracts.

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• Clients should ensure that take profits and stop losses are adjusted before this rollover occurs.

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