Daily market analysis

JUL 01,2020

July 1, 2020

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

Currency Data Time (TP) Forecast Exposure

(Our side)

JPY Tankan Large Manufacturers Index (Q2) 07.50 -31 -4M
JPY Tankan Large Non-Manufacturers Index (Q2) 07.50 -18 -4M
CNY Caixin Manufacturing PMI (Jun) 09.45 50.5  
EUR German Manufacturing PMI (Jun) 15.55 44.6 +22M
EUR German Unemployment Change (Jun) 15.55 120K +22M
GBP Manufacturing PMI (Jun) 16.30 50.1 -93M
USD ADP Nonfarm Employment Change (Jun) 20.15 3,000K -351M
USD ISM Manufacturing PMI (Jun) 22.00 49.5 -351M
USD Crude Oil Inventories 22.30 -0.950M -351M

 

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