Daily Market Analysis

Market Focus

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

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

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

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

Market Wrap

Main Pairs Movement

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

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

COVID-19 Data (EOD):

Technical Analysis:

 USDCHF (H4)

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

Resistance: 0.9535, 0.9603, 0.9647

Support: 0.9391, 0.9325

EURUSD (H4)

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

Resistance: 1.147, 1.1544, 1.16

Support: 1.1394, 1.1334, 1.1287

USDCAD (H4)

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

Resistance: 1.3628, 1.3739, 1.3865

Support: 1.3494, 1.3377, 1.3215

Economic Data

Daily Market Analysis

Market Focus

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

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

JP Morgan Second-Quarter Earnings Takeaways:

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

Market Wrap

Main Pairs Movement

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

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

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

COVID-19 Data (EOD):

Technical Analysis:

GBPUSD (H4)

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

Resistance: 1.2565, 1.2637, 1.2673

Support: 1.2470, 1.2405, 1.2342

AUDUSD (H4)

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

Resistance: 0.6980, 0.7000, 0.7060

Support: 0.6855, 0.6890, 0.6920

XAUUSD (H4)

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

Resistance: 1810, 1818

Support: 1799, 1792, 1787

Economic Data

Daily Market Analysis

Market Focus

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

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

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

Market Wrap

Main Pairs Movement

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

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

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

COVID-19 Data (EOD):

Technical Analysis:

 EURUSD (H4)

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

Resistance: 1.2587, 1.2662, 1.2784

Support: 1.2526, 1.2466, 1.2391

USDJPY (H4)

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

Resistance: 107.29 – 107.36, 107.96, 108.55

Support: 107.1, 106.75, 106.4

XAUUSD (H4)

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

Resistance: 1818, 1836

Support: 1786, 1761, 1721

Economic Data

Weekly Analysis

Market Wrap (Weekly Basis)

Gold

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

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

GBPUSD

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

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

EURUSD

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

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

Market Focus

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

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

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

Market Wrap

Main Pairs Movement

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

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

COVID-19 Data (EOD):

Technical Analysis:

GBPUSD (H4)

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

Resistance: 1.2667, 1.2753, 1.2855

Support: 1.2606, 1.253, 1.247

USDJPY (H4)

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

Resistance: 107.93, 108.55, 109.2

Support: 107.08, 106.53, 106

AUDUSD (H4)

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

Resistance: 0.7, 0.7121, 0.7199

Support: 0.6897, 0.6803, 0.6669

Economic Data

Risk Warning:

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

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

Daily Market Analysis

Market Focus

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

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

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

Market Wrap

Main Pairs Movement

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

COVID-19 Data (EOD):

Technical Analysis:

 EURUSD (H4)

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

Resistance: 1.1349, 1.1380, 1.1400

Support: 1.1203, 1.1227, 1.1261

USDCAD (H4)

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

Resistance: 1.3567, 1.3632, 1.3719

Support: 1.3485, 1.3439, 1.3356

XAUUSD (H4)

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

Resistance: 1818, 1825, 1840

Support: 1765, 1778, 1797

Economic Data

Risk Warning:

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

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

Market Focus

Despite board members from Bank of Japan see continued high uncertainty surrounding the economy, no major change to the current monetary tools is considered. BOJ officials want to continue to closely monitor effects of previously implemented policy as the financial markets remain relatively stable and companies are not facing significant funding problems. Quarterly projections for prices and growth will be published on July 15.

The White House wants Congress to pass another $1 trillion stimulus package by the first week in August before summer recess, which is scheduled to be August 3^rd. They are set to intensify talks regarding the new package as they return to Washington after the Independence Day holiday.

RBA kept interest rate unchanged as widely expected. Key takeaways from RBA monetary policy statement:

• Will not raise rate until progress made to full employment
• Prepared to scale up bond purchases if needed
• 3-year yield target unchanged at 0.25%
• Australian economy is going through a very difficult period and is experiencing the biggest contraction since the 1930s

Market Wrap

Main Pairs Movement

GBPUSD was up in three-consecutive days, the strong intraday bounced seemed unaffected by resurgent of US dollar demand. The uptick in cable lacks significant fundamental catalyst and could be solely associated with intraday short-covering move. Negotiation between UK and EU will carry on, despite not much progress being made, speculators seem to lighten their bearish bet on Brexit compared to 2019.

Gold has reached new highs, hitting a peak of 1797 during US trading session, a price not seen since late 2012. The precious metal is benefiting from central bank’s expansion of their balance sheets, and constantly injecting liquidity into financial market. US 10-year bond yield also dropped 5.8%, indicating some risk aversion mood.

COVID-19 Data (EOD):

Technical Analysis:

GBPUSD (H4)

Cable continued to climb upward without looking back, currently trading at 1.2548. Bull takes the pound to a four-week high, and yet failed to surpass 61.8% Fibonacci at 1.26 handle.   MACD on the four-hour chart is showing a bullish signal, if bullish histogram continues to build up, then it could look pass 1.26 and move to challenge 71.4% Fibonacci, which meets perfectly with key resistance level at 1.267.

Resistance: 1.26, 1.267,1.275

Support: 1.247, 1.2395, 1.2268

USDCHF (H4)

USDCHF was kept below SMA50, price rose and fell, and stayed unchanged on Tuesday. The precious correction has been interrupted and it is now back to big down trend built from early June. Resistance of SMA50 needs to be overcome for the current downside pressure to be alleviated, otherwise the pair looks pass 0.9391 and potentially reach 0.9325 in the medium term.

Resistance: 0.946, 0.9535, 0.9603

Support: 0.9391, 0.9325, 9252

XAUUSD (H4)

Gold conquered $1786 resistance, closed the day up 0.61%. The yellow metal touched the uptrend bottom line, then bounced furiously. There is not much horizontal resistance level above the current price, which makes $1800 handle a good pivot point. RSI was right beneath 70 overbought line, thus price could possibly continue to move upward until hitting $1800 and RSI breaching 70 before retreating to $1786.

Resistance: 1800, 1819, 1836,

Support: 1786, 1761, 1742

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

US stocks surged, with tech shares pushing Nasdaq Composite to a record high. The DXY continued to fall for a fifth day while US Treasuries dipped. On the same note, the S&P 500 index headed towards its fifth increase as Amazon shares achieved the $3,000 threshold for the first time and Tesla extended its 5-day rally to about 40%. Overall, the dollar’s weakness has been the story of the day as it has officially slid to its weakest level since June 10 with risk-on sentiment diminished the demand for havens and drove equities higher.

Global stock markets started the week quite strong with Stoxx Europe 600 Index climbed 1.6% and developing countries’ stocks added 2.5% as a result of the Chinese markets pushing a global equity benchmark toward a one-month high.

Market Wrap

Main Pairs Movement

GBPUSD is trading higher, reaching 1.25. The overall risk-on market sentiment is boosting Sterling. Even though BOE Gov Bailey reportedly raised the potential option in negative interest rates, the market seems unaffected. The USDCAD, on the other hand, dropped to 1.3518 on Monday, finding support at the lowest level in two weeks, and rebounded back up to 1.3560 to close the day.

Gold rose slightly by about 0.50% on the day, extending its well-performance despite a risk-on market while the demands for the greenback fades away. In terms of black gold, like most commodities, WTI is still struggling to find sustainable demands with the ongoing COVID-19 crisis.

COVID-19 Data (EOD):

Technical Analysis:

 EURUSD (H4)

EURUSD has surged above 1.13 price level, hitting the highest level in nearly two weeks. The sudden surge in the pair is mainly driven by the unexpectedly better ISM Non-Manufacturing PMI number of 57.1 and China’s bullish equity market. Both statistics weighed down on the safe haven dollar as investors regain confidence amid the intensifying coronavirus situation in the US. According to EURUSD’s 4-hour chart, the pair appears to be sitting well above its moving average, which in turn, suggests the pair would retain its bullish momentum in the short term.

Resistance: 1.1350, 1.1388, 1.1420

Support: 1.120, 1.1230, 1.1265

USDJPY (H4)

Following the weakened DXY, the USDJPY pair has made a slight dip in its price for the day. However, this is an uncommon scenario as USDJPY usually moves higher with the US stock markets. One plausible explanation is that despite the market’s risk-on sentiment, concerns over potential risk of the coronavirus’ outbreak still preserves the upbeat momentum of yen. Under this mixed situation, with yen’s strength, USD’s weakness, and growing equity markets, USDJPY is likely to stay choppy between 107.40 and 107.70 range in the upcoming trading days.

Resistance: 107.45, 107.67, 108.18

Support: 106.00, 106.63, 107.05

AUDUSD (H4)

AUDUSD is approaching a one-month high at 0.7000 as the global appetite for equities improved. Additionally, the commitment from the Chinese government to uphold the economy has also helped the AUD to gain some traction as well. Looking at the chart, AUDUSD appears to struggle a bit at the resistance around 0.6980. At the same time, the RSI has just pulled away from the overbought zone, which in turn, implies the AUDUSD price is overstretched and a pullback is expected to take place before the pair rise again.

Resistance: 0.6985, 0.7015, 0.7060

Support: 0.6800, 0.6855, 0.6900

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.

Market Focus

Investors continue to weigh signs that global economies are on the mend against relentless new outbreaks of the virus. US payrolls data Thursday fueled optimism of a V-shaped recovery in the world’s biggest economy.

Australia’s Retail Sales for May printed 16.9%, slightly above estimate of 16.3%, a big leap from previous -17.7%.  While China’s June month Caixin Services PMI grew past-49.9 expected and 55 prior to 58.4.

Market Wrap

Main Pairs Movement

Due to US Independence Day, liquidity was drained out in forex market, all major pairs were traded in tight range.

COVID-19 Data (EOD):

Technical Analysis:

 GBPUSD (H4)

Cable has broken its downward trend line from mid-June and bounced to challenge 38.2% Fibonacci at 1.253, but failed to advance beyond this level.  The bullish reversal may move ahead of itself, if price can retrace towards1.24 without breaching lower, then the current bullish run could be sustainable.

Resistance: 1.253, 1.267, 1.2788

Support: 1.24, 1.2268, 1.218

AUDUSD (H4)

Aussie is kept within a tight range, depressed liquidity from US Independence Day has added noise to price momentum. The near-term trend favors the bull as price sits comfortably in Bollinger’s upper region, but whether it could overcome resistance band of 0.6967 – 0.702 within the next few trading days remains questionable.

Resistance: 0.6967, 0.702, 0.712

Support: 0.6897, 0.6803, 0.6669

XAUUSD (H4)

Gold’s bullish bias is still intact and RSI shows price is far from overbought, which provides plenty space for the precious metal to climb. Bulls are looking over $1786 hurdle, and $1800 target remains a distinct possibility. On the flip side, failure to defend $1760 could result in a bearish reversal, which would possibly prompt some aggressive selling.

Resistance: 1786, 1819, 1836

Support: 1761, 1742, 1722

Economic Data

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