Daily market analysis

JUN 10,2020

June 10, 2020
   

Daily Market Analysis

Market Focus

The S&P 500 Index more than 1% and touched its highest level since late February at 3,233 points. With investors looking to books their profits ahead of Wednesday’s FOMC announcements, the index is undergoing a technical correction and has lost around 0.40% on the day. Wall Street ended the day mixed and not far from its daily openings. The greenback attempted a recovery as equities fell but resumed its decline in the American session.

 

What to expect from the announcement of FOMC meeting?

As the FOMC meeting will end its two-day meeting on Wednesday and will announce its decision on monetary policy. It is expected that the Fed is going to proclaim a more dovish statements than what the market participants consider at the moment. According to CIBC analyst, financial conditions in the US are close to their pre-COVID levels, assisted by rising equity prices and a softening USD. The ‘mini tantrum’ seen in long-end yields recently is a development that warrants caution in this regard, though [they] believe it is a bit too premature for the FOMC to implement anything [on Wednesday].”

 

Market Wrap

  • Dow Jones down 1.09%, S&P500 up down 0.78 % and Nasdaq up by 0.11%
  • WTI July decreased by $0.75 to $38.94, and Brent Oil July decreased by $0.38 at $41.18 while near closing.
  • Dollar Index down by 0.32%.
  • Gold rallied 0.97% and sit around $1715
  • AUDUSD down 0.87% to 0.69610
  • EURUSD up 0.4% to 1.1340
  • GBPUSD up 0.03% to 1.2723
  • NZDUSD down 0.72% to 0.6511
  • USDCAD up 0.21% to 1.3413
  • USDJPY down 0.65% to 107.720

 

Main Pairs Movement

The EURUSD pair trades near its multi-month high at 1.1384, while the GBPUSD pair hovers around 1.2730 little changed from Monday’s closing levels. The Japanese yen was the strongest, led by falling equities and government bond yields. USDJPY trades near a daily low of 107.61 as US Treasury yields edged lower for a second consecutive day.

 

Gold also benefited from the worsening mood, advancing for a second consecutive day, although holding within familiar levels. Crude oil prices seesawed between gains and losses but finished the day unchanged, with WTI just below $39.00 a barrel.

COVID-19 Data (EOD):

Technical Analysis:

USD/CHF (H4)

The demand for Safe-haven assets has dropped USDCHF to the 0.9500 regions. The Swiss Franc is one of the key outperformers today with USDCHF falling about 0.77% and AUDCHF plummeting 1.54%. This is an intriguing movement because the risk assets are currently trading near all-time highs in the US. We expect the pair to bounce back according to the pair’s previous performance when nearing the 0.9500.

 

Resistance: 0.9540, 0.9585, 0.9650

Support: 0.9500, 0.9430, 0.9390

 

EURUSD (H4)

The EURUSD pair spent the first half of the day below 1.1300 but gained traction during the American trading hours. The gain is based on the strong selling pressure on the greenback that was initiated by the sharp fall in the US Treasury Bond yields. However, since the macroeconomic data released by Eurostat indicated the EU economy is undergoing a contraction of 3.6% on a quarterly basis, we expect the pair to consolidate around the 1.330 regions.

 

Resistance: 1.1495, 1.1388

Support:  1.1252, 1.1186

 

XAUUSD (H4)

The gold seems back to risk-off mode couple days ago even U.S. share market outperformance since hideous slipped from March. To be honestly, U.S. stall in short term that equities tumbled, and the World Bank projected a dire outlook for the global economy this year. The world bank said the global economy this year will contract the most since world war II and emerging nations’ output will shrink for the first time in at least six decades due to pandemic.

 

Resistance: 1720.42, 1728.4, 1745.98

Support: 1709.67, 1671.97, 1665.05

 

Economic Data

Currency

Data Time (TP) Forecast

USD

Core CPI 20.30

-0.1%

USD Crude Oil Inventories 22.30

-1,450M

 

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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.