Market Focus

ISM Manufacturing PMI rose to 52.6 from previous 43.1, beating estimate of 49.5. The printed figure was the highest number recorded in a year. ADP’ private-sector jobs rose by 2.369 million in June, ADP Research Institute vice president said “as the economy slowly continues to recover, we are seeing a significant rebound in industries that once experienced the greatest job losses.”

China decided to impose new security laws in Hong Kong after a year of pro-democracy protests. The national security law is aimed at punishing acts of secession, subversion of state power, terrorism and “collusion with foreign and external forces to endanger national security. According to the draft bill, China will establish a new bureau in Hong Kong to analyze the security situation and collect intelligence. US Secretary of State Michael Pompeo said Hong Kong could no longer be considered sufficiently autonomous, and Donald Trump is considering revoking some or all of its special trade privileges.

Key highlights of FOMC minutes:

• Fed officials agreed on need for more analysis for Yield-Curve-Control.
• Planning on beefing up its forward guidance for interest rates in the coming months.
• Fiscal policy could potentially represent a big downside risk.
• Negative interest rates did not appear to be an attractive policy tool.

Market Wrap

Main Pairs Movement

Dollar weakened across the board, the dollar index dropped 0.23% to 97.15. Most majors were climbing against the greenback prior to US market open. Possible mover could be Biopharmaceutical New Technologies’ announcement on Wednesday that the COVID-19 vaccine that they co-developed with Pfizer triggered a strong immune response in the early stage of human trials, thus triggering risk-on mood.

COVID-19 Data (EOD):

Technical Analysis:

 USDJPY (H4)

USDJPY is hovering above the edge of the upward trending support line, currently trading at 107.46. A clear downward breakout might push price toward 100 SMA and 50 SMA cross. Otherwise, any moves beyond 200 SMA should strengthens the current upward trend. RSI retraces back to 50 midline after briefly touched 70 overbought yesterday.

Resistance: 107.93, 108.55, 109

Support: 107.09, 106.53, 106

GBPUSD (H4)

Cable was trapped in the Bollinger’s lower region since last Wednesday, and finally made a bullish reversal during yesterday’s US session. The pair continued to stay within the upper region throughout Wednesday and broke the downward trendline since mid-June. RSI is approaching 70, and price sitting outside of Bollinger upper bound, these combined to favor bear in the near term.

Resistance: 1.2536, 1.2627, 1.2753

Support: 1.2427, 1.2363, 1.2268

USDCHF (H4)

USDCHF is capped below SMA100 and SMA50. Price tested 0.9443 three times in the last five trading days, it has yet to make a lower-low on the four-hour chart, if it does then bear will take the driver seat. Looking downward, 0.9391 will be the first resistance line followed by 0.9325.

Resistance: 0.9533, 0.9603, 0.9647

Support: 0.9443, 0.9391, 0.9325

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 benchmarks ended higher on Tuesday, seeing off the best quarter for Wall Street since 1998. The S&P 500 gained 1.5% to 3,100 while the Dow Jones Industrial Average added 0.9%, which is equivalent to 217 points, and hit 25,812. Lastly, the Nasdaq Composite rallied 1.9% to finish the day at 10,059. The overall performance of the Wall Street indexes in the second quarter are the followings: S&P 500 surged 18%, the Nasdaq soared 29.4%, and the Dow up 15.6%.

However, as stated by the Fed chairman, Jerome Powell, the second outbreak of the coronavirus could force governments and people to withdraw from the economic activity, suggesting that the economy outlook is highly uncertain. Therefore, without knowing if a second round of lockdowns is going to take place or not, the US equity markets’ upcoming outlook remains unpredictable.

Market Wrap

Main Pairs Movement

. EURUSD pair is finishing a dull June with little change. Speculative interest to get rid off the greenback at the end of the quarter amid accumulating concerns over US economic outlook has weighed down on USD. USDJPY is at a critical juncture while second wave noise pipes up and questions the USD dominance. Nevertheless, USDJPY appears to be ripe enough for a sell-off if 108 level continues to guard. USDCAD, on the other hand, has failed to sustain its gains from its 1.3700 range during the North America trading session and finished the day at the lows of 1.3570.

COVID-19 Data (EOD):

Technical Analysis:

XAUUSD (H4)

The precious metal has achieved a new multi-year high above 1780 level today as money managers rush to adjust their portfolios ahead of the end of the month and quarter. XAUUSD has strong support in 1765, a convergence of the previous 4 hour low and the previous monthly highs. In the uptrend, 1791 and 1803 guard the bullish rally, an area that was last seen in Feb/Oct 2012 and Nov 2011. Additionally, this price range is also considered as the last defense for the 1921.50 Sep 2011 high. We expect an immediate upside pressure should take place and keep the precious metal price around the 1800 zone.

Resistance: 1782, 1791.15, 1803.30

Support: 1704.89, 1746.40, 1766.15

GBPUSD (H4)

GBPUSD shows a strong bullish momentum today, bouncing back from the lows of 1.22600 range to 1.23960 as the Wall Street closes today. Knowing the ramifications of a second wave of COVID-19 in the UK and fresh rounds of Brexit talks, bears are expected to target the downside at this juncture. If the pair can penetrate the 1.2417 resistance, we expect the Cable to rally towards the 1.2440s level.

Resistance: 1.2401, 1.2441, 1.2473

Support: 1.2250, 1.2208, 1.2159

AUDUSD (H4)

AUDUSD surpasses 0.6900 in the early Asia session as the greenback enters a new round of selling pressure. AUD has been performing well on the session as investors have turned their attention back to the US equity markets. While there is still room to the upside, minor pullbacks are expected as the MACD for AUDUSD appears to be quite flat, a sign that suggests upcoming consolidations.

Resistance: 0.6887, 0.6962, 0.7060

Support: 0.6853, 0.6799, 0.6715

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

Total death toll worldwide has surpassed 500,000 and confirmed cases exceeded 10 million. WHO warned that the worst scenario has yet to come. European Union governments is considering extending a travel ban for US residents for at least two weeks. On the other hand, several US states decided to halt plans to reopen restaurants and bars.

US Pending Home Sales for May rose to 44.3% from April -21.8%, far outpaced estimated 18.9%. The figure refreshed the highest record in history as mortgage rates fell. Mortgage rates have dropped to the lowest level, helping to stabilize demand in housing industry, which was severely dampened by COVID-19.

Key takeaways from BoE Bailey speech:

• Current scale of central bank reserves mustn’t become a permanent feature
• As economies recover, it’s likely that some of the exceptional monetary stimulus will need to be withdrawn, including by reducing reserves.
• Now expecting 20% fall in GDP in Q1 and Q2 combined vs 27% fall in May scenario.
• BoE does not have specific triggers for further increases in QE.
• Slowing of the pace of QE reflects recent signs from the economy and calming of markets since March.

Market Wrap

Main Pairs Movement

Cable initially rose 50 pips as Boris Johnson promised to double down on investment on infrastructure, education, and technology. Then, price took a U-turn since Euro session, the pair ended up losing 32 pips. Brexit negotiation is still full of uncertainties, but both sides seem to agree that the deadline to get a deal will not be extended. One official said Monday’s face-to-face meeting have accomplished nothing except negotiate an agenda.

Safe-haven Yen and Franc suffered the most against US dollar on Monday, both dropped 0.33%. USDJPY and USDCHF surged during US session where US indices rose simultaneously, suggesting an investing sentiment favored risky assets.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (H4)

Euro-dollar failed to capitalize on its early gain and is kept beneath 1.1287. Price touched Bollinger’s upper band for the first time in a week, and was lingering above the mid-line. The band on the four-hour chart is narrowing, which could be a set-up for upcoming surge or plummet. If it manages to stay above Bollinger mid-line within the white box highlighted above, it could move to take out 1.1287 resistance. Otherwise, bear will regain control.

Resistance: 1.1287, 1.1348, 1.1394

Support: 1.1177, 1.1096, 1.1023

USDJPY (H4)

USDJPY successfully conquered SMA100, and it aims to regain 108 handle. It once reached 107.9, the highest price in two weeks. The pair is currently hovering above SMA200, turning the resistance into a support. The bullish breakout was freshly completed on Monday, and there is plenty on the upside. Thus, bull looks to have upper hand over bear.

Resistance: 108, 108.55, 109.2

Support: 107.1, 106.5, 106

USDCAD (H4)

USDCAD has been sitting comfortably within Bollinger Band’s upper region, and frequently touch the upper line since last Thursday. The upward channel remains intact with 1.3739 acting as a near resistance, which should be challenged in the near term. If price reversed and touch Bollinger’s lower line, then the pair could trade sideways, but a bearish reversal looks unpromising.

Resistance: 1.3739, 1.3865, 1.4033

Support: 1.352, 1.3377

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

Toward the end of trading Friday, the Dow traded down 2.72% to 25,044.16 while NASDAQ dropped 2.18% to 9798. Additionally, the S&P 500 also fell 2.19%, hitting 3016.20. The main driving force for the poor Wall Street indexes performance is still the accumulating new COVID-19 cases; currently, the US still holds the highest number of coronavirus cases and deaths in the world, reporting a total of 2,422,310 with around 124,410 deaths. Brazil confirmed a total of 1,228,110 cases as Russia reported a total of 619,930 cases.

Additionally, the followings are important economic data released today:

• US personal spending rose 8.2% in May while personal income fell 4.2% in May.
• The University of Michigan’s consumer sentiment index declined to 78.1 in June, versus a preliminary reading of 78.9.
• The total number of active US oil rigs slipped by 1 to 188 rigs this week, Baker Hughes Inc reported.

Market Wrap

Main Pairs Movement

European shares closed mostly lower today. The eurozone’s STOXX 600 fell 0.39, the Spanish Ibex Index fell 1.26% while Italy’s FTSE MIB Index dropped 0.57%. Moreover, the German DAX300 dipped 0.73%, French CAC 40 dropped 0.18%, and UK shares increased by 0.2%.

In terms of major commodity, oil traded down 1.1% to $38.29 while gold hit 1781.00, which is an increase of 0.6%. Silver traded up 0.6% Friday to 17.995 while copper rose 0.1% to 2.666.

Last but not least, in the forex market, USDJPY dropped to a daily low of 106.80 but staged a rebound during the American trading hours. The USD buying picked up pace during the early North American session and pushed the AUDUSD pair to fresh daily lows around 0.6850s.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (H4)

EURUSD enters a series of consolidations on Friday as the pair first hit 1.1238 on the upside during the European session but then resuming the down sliding. The EURUSD later bottomed at 1.1200 zone in the later risk-off session, which is indicated by the overall negativity among the US indexes. In the earlier trading hours, EUR enjoyed a impulse as the comments of ECB president affirmed that the world may have already passed the worst of the coronavirus crisis and that central banks have responded massively to the challenge. However, the risk appetite is crushed as Texas Governor claimed that he plans to roll back economy reopening plans amid the recent surge in new COVID-19 cases. To sum it up, the EURUSD pair has been closely associated with the rising concerns over the virus pandemic, thus, if the US new cases continue to increase, US dollar will rally on investors’ risk aversion.

Resistance: 1.1245, 1.1275, 1.1330

Support: 1.1147, 1.1180, 1.1205

GBPUSD (H4)

Cable has plummeted intensely as the greenback rallied across the board. GBPUSD tumbled to 1.2314. hitting the lowest price range since May 29. On the downside, if the GBPUSD penetrates 1.2300, the next support is at 1.2292, followed by 1.2250. Considering the increasing risk aversion market sentiment fueled by the second wave of virus pandemic, the extended bearish momentum is likely to pressure the pair down below 1.2300.

Resistance: 1.2441, 1.2537, 1.2648

Support: 1.2250, 1.2292, 1.2335

USDCAD (H4)

USDCAD broke out of its consolidative range and rose to its multi-week tops around 1.37145 mark during the early North American trading session. However, the pair dropped immediately after it hit the 1.37145 region and has been trading between 1.36500 and 1.36690. Overall, the increasing demand for greenback and the stagnated WTI price (which is likely to be the result of the diminishing demand for crude oil amid increasing virus cases) suggest the pair is going to sustain a relatively bullish momentum in the upcoming trading days.

Resistance: 1.3855, 1.3800, 1.3715

Support: 1.3623, 1.3576, 1.3488

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

US Initial Jobless Claims printed 1.48 million in the week ended June 20. This figure came below forecast of 1.3 million, nonetheless recorded a 13^th consecutive weekly declines since April. GDP stayed put at -5% for the first quarter, the lowest reading since June 2009. May’s Core Durable Goods Orders rebounded to 4% from last month’s -8.2%. Market remained quiet on the back of the news, US stocks and bonds barely responded.

International Monetary Fund downgraded its outlook for global economy, the organization expects global GDP to shrink 4.9% this year, previously predicted 3%. Forecast for 2021 also adjusted down to 5.4% compared to 5.8% previously. IMF said its increased pessimism reflected scarring from a larger-than-anticipated supply shock during the earlier lockdown.

Main takeaway from ECB Meeting Minutes:

• Price pressures have weakened, inflation expectations have declined, and growth risks are skewed to the downside.
• Weak demand is likely to be a much larger problem than supply constraints.
• Negative side effects had so far been clearly outweighed by the positive effects of asset purchases

Market Wrap

Main Pairs Movement

Forex trading session on Thursday was relatively mixed. Most majors were trading within a tight range, Aussie and Kiwi were the best performers among G-10, both gained around 20 pips intraday.

 Euro extended its decline from yesterday, lost 33 pips against the greenback. Economic data released on Thursday from the US was mostly ignored by market participants. On the other hand, ECB said some Governing Council members expressed reservations about the size of the PEPP expansion at their meeting this month, reducing funding liquidity prior to a fully recovered economy may impose potential downside risk to Euro Zone.

COVID-19 Data (EOD):

Technical Analysis:

 AUDUSD (H4)

Aussie has been capped by SMA50 in the four-hour chart throughout Thursday. The commodity linked currency is forming a triangle that is gradually pushing price into a narrow range, we should be able to see a breakout in the near term. If it fails to surpass resistance of 0.6897, then a bearish breakout should take place, otherwise it could eye for 0.7 handle once again.

Resistance: 0.6897, 0.6967, 0.7

Support: 0.6803, 0.6669, 0.6591

USDJPY (H4)

USDJPY was extending its recovery from 106 region, and currently sits firmly above 107. It is now entering into a region where it previously struggled to find a direction for a whole week. With the lack of economic impetus on Friday, we could return to a similar undecisive trading session. If it can break SMA100 and SMA200, which should be reachable in the short term, then USDJPY will proceed to test 108.55 resistance; otherwise, it could retrace back to 106.53.

Resistance: 107.93, 108.55, 109.2

Support: 107, 106.53, 106

EURUSD (H4)

Euro-dollar has fully formed a double-top, then quickly slide downward. We continue to hold our previous view, the shared currency broke 1.1236, and it eyes for 1.1177 support line. US dollar could gain further traction from the current risk-off sentiment. If 1.1177 fails to hold, we could possibly see a big slump towards 1.1096.

Resistance: 1.1287, 1.1348, 1.1394

Support: 1.1177, 1.1096, 1.1023

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

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

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

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

Market Wrap

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

Main Pairs Movement

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

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

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

COVID-19 Data (EOD):

Technical Analysis:
AUDUSD (H4)

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

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

USDJPY (D1)

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

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

GBPUSD (H4)

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

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

Economic Data

Market Focus

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

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

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

Market Wrap

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

Main Pairs Movement

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

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

COVID-19 Data (EOD):

Technical Analysis:

 EURUSD (H4)

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

Resistance:  1.1348, 1.14, 1.147

Support: 1.1237, 1.1177, 1.1096

XAUUSD (D1)

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

Resistance: 1791, 1838

Support: 1746, 1681, 1635

USDCAD (H4)

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

Resistance: 1.3594, 1.3663, 1.3741

Support: 1.3478, 1.3374

Economic Data

Risk Warning:

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

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

Daily Market Analysis

Market Focus

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

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

Market Wrap

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

Main Pairs Movement

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

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

COVID-19 Data (EOD):

Technical Analysis:

 EUR/USD (H4)

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

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

Resistance:  1.1270, 1.1300, 1.1355

Support: 1.1172, 1.1143, 1.1107

USD/CHF (H4)

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

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

Resistance: 0.9533, 0.9586, 0.9650

Support: 0.9390, 0.9425, 0.9464

XAU/USD (H4)

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

Resistance: 1759.20, 1766.25

Support: 1746.40, 1716,05, 1704.90

Economic Data

Risk Warning:

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

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

GOLD

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

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

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

GBPUSD

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

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

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

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

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

EURUSD

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

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

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

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

AUDUSD

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

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

Risk Warning:

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

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

Daily Market Analysis

Market Focus

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

BOE’s Rate Decision:

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

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

Market Wrap

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

Main Pairs Movement

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

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

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

COVID-19 Data (EOD):

Technical Analysis:

 GBP/USD (H4)

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

Resistance: 1.2474, 1.2571, 1.2619

Support: 1.2395, 1.2375, 1.2326

AUD/USD (H4)

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

Resistance: 0.69045, 0.69499, 0.70245

Support: 0.67830, 0.68055, 0.68410

USD/JPY (H4)

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

Resistance: 107.14, 107.44, 107.79

Support: 106.58, 106.29, 105.96

Economic Data

Risk Warning:

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

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