Daily market analysis

JUN 18,2020

June 18, 2020

Daily Market Analysis

Market Focus

Fed’s Chief Powell testifies before Congress for a second consecutive day. Among other things, he claimed that the central bank stands ready to do more to aid the economic recovery if more needs to be done. He also added that “it will be a while before the Fed starts thinking about shrinking its balance sheet.”

On the other hand, UK PM Johnson 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 UK’s economic needs in a “creative way”, which in turn, closing GBPUSD at 1.2550.

 

Market Wrap

  • Dow Jones down 0.65%, S&P500 up 0.36 % and Nasdaq up by 0.03 %
  • WTI July slightly down by $0.22 to $37.71, and Brent Oil July up by $0.05 to $40.71 while near closing.
  • Dollar Index up by 0.04%
  • Gold down 0.01 % and sit around $1726.009
  • VIX down 0.59% to 33.5
  • AUDUSD down 0.1% to 0.6820
  • EURUSD down 0.18% to 1.12432
  • GBPUSD down 0.12% to 1.25544
  • NZDUSD up 0.13% to 0.64595
  • USDCAD up 0.15% to 1.3541
  • USDJPY down 0.30% to 106.996

 

Main Pairs Movement

The EURUSD pair has fallen to 1.1206 in a dull trading day as the main focus of the day remained on the rising coronavirus cases in the US. To be precise, Texas reported hospitalizations rose by 11% while the overall country reported over 16,400 new cases before Wall Street closed.

USDJPY pair eased ahead of Wall Street-s close and neared 107.00 as US indexes failed to sustain modest intraday gains. The DIJA and the S&P 500 both closed in the red and the slump is associated with the book from former US Security Advisor John Bolton on Trump. Gold trimmed intraday losses and closed the day little changed at around 1728. Crude Oil prices ended the day little changed, with WTI just below 39.00 a barrel.

 

COVID-19 Data (EOD):

Technical Analysis:

 USD/CAD (H4)

The USDCAD pair is trading in a relatively tight range on Wednesday and struggles to determine its next short-term direction. The dull trading for USDCAD is mainly caused by the weighed down market sentiment in the greenback as new coronavirus infection cases among Texas and Florida began to see an increase. Additionally, Fed’s Powell’s statements regarding a full US economic recovery is unlikely until the public is confident that the disease is fully contained also added extra concerns. Knowing the increased concerns over the US economic outlook, we are likely to see the Loonie pair entering yet another consolidating phase until market receives a strong bullish or bearish signal.

 

Resistance: 1.36275, 1.36860, 1.37350

Support: 1.35060, 1.34680, 1.33760

 

GBP/USD (H4)

GBPUSD formed a bearish pattern on the 4-hour chart and closed today at 1.2542 region. The falling suggests investors’ concerns over a slower than expectation economy recovery in the UK have kicked in. One notable data released today is that UK’s inflation met the expectations with 0.5% in May. Nonetheless, as the pair ended the day bouncing back from the low 1.2512 to above the 1.2540 support, we expect the pair to gain traction and recover today’s loss.

 

Resistance: 1.25920, 1.26315, 1.26815

Support: 1.24730, 1.25030, 1.25390

 

USD/JPY (H4)

The yen dropped below 107 once and close at 106.99. It is really differently as shares market keep risk-on while yen fell. After 3 day rallied on 12nd June, yen solid at range from 106.85 to 107.665. 4 hours charts indicate yen in set 107 to 107.5 in recent days and give it great support and resistance in short term. At the same time, we expect that will potential breakout in short term especially we are looking forward downturn. However, we can’t rule out it still hold at the short-term consolidation.

 

Resistance: 107.51, 107.665, 107.795

Support: 106.95, 106.86, 106.585

 

Economic Data

Currency

Data Time (TP) Forecast

Exposure

(Our side)

NZD

GDP 06.45 -1.0% +68M

AUD

Employment Change 09.30 -125.0K

+23M

CHF SNB Interest Rate Decision 15.30 -0.75%

+36M

CHF

SNB Monetary Policy Assessment 15.30   +36M

GBP

BoE Interest Rate Decision 19.00 0.10%

-113M

GBP BoE MPC Meeting Minutes 19.00  

-113M

USD

Phila Fed Manufacturing Index 20.30 -23.0

-224M

 

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