Daily market analysis

Aug 20,2020

August 20, 2020
   

Daily Market Analysis

Market Focus

Stocks are slightly higher after closing at a record for the first time since COVID-19 started amid a rebound in giant technology companies. Major indexes advance as investors are waiting for the latest stimulus plan discussion ahead of the Federal Reserve’s meeting minutes. In the meanwhile, investors are putting the spotlight on Apple Inc.; Apple Inc. has become the first domestic company to reached $2 trillion in value, capping a staggering ascent that began in the pandemic.

European Union endorses sanctions on Belarus after having an emergency meeting for the purpose of protesting against its embattled president, Alex Lukashenko. The European Union discloses that it does not recognize the election result, which is possibly involving in electoral frauds. As a result, the European Union threatens to reroute 53 million euros away from Belarus, which is the fund against the ongoing pandemic. The E.U. wants to avoid a repeat of what happened in Ukraine several years ago, triggering a military intervention and deadliest conflicts in Europe.

 

Market Wrap

 

Main Pairs Movement

GBPUSD is currently trading at 1.3157 as of writing. The pair has been challenged the level at 1.32 during the European trading session. However, the pair is mostly driven by the dollar’s drop. The dollar index has constantly dropped since March 2020. The negotiation of a post- Brexit trade deal with the European Union is also one of the triggers to drive the British Pounds. If the U.K. can soon close an agreement with the E.U., then the British Pounds will be benefited.

USDCAD surges to 1.3215 during the American trading session after FOMC Minutes. At the moment, the Canadian acts as a passive role; the pair is mostly driven by the dollar.  As the Federal Reserve acknowledges costs to yield caps and targets such as the expansion of the Fed balance sheet, the dollar index soars to the positive territory. At the same time, the strength of the dollar is boosted by the U.S. Treasury Bond yield. That being said, the pair is currently in the bullish mode.

 

COVID-19 Data (EOD):

 

Technical Analysis:

EURUSD(H4)

The EURUSD pair is currently making a correction for most of the day after the surge yesterday. After the pair tested the resistance at 1.1942, it went into a bearish trend. The MACD turns down during the American session, indicating a selling signal. The pair has broken the upward trend line, which means that the upward trend is bygone. What we can see now is whether there are any external factors to push the pair down or hold the downward pressure.       

 Resistance: 1.1881, 1.1942

Support: 1.1755, 1.1418

 

USDCAD(H4)

USDCAD rebounds after FOMC Minutes, climbing above 1.3200 level. After the USDCAD pair tested the resistance at 1.3156, it turned into a bullish mode. The uptrend push is strong due to breakout of the 20 SMA in the 4- hour chart. At the same time, the MACD turns up during the U.S. trading session. However, if examining the pair from the big picture, the trend is still bearish and as long as the price is under 1.3235, remaining medium- term bearish.

Resistance: 1.3248, 1.3352, 1.3431

Support: 1.3156

 

AUDNZD(H4)

The Australian dollar falls against the New Zealand dollar, currently trading at 1.0945. The AUDNZD was mostly in the bullish condition since the 27th of July, but it entered into the negative territory after the 18th of August. The falling of the pair is mostly caused by the rising tensions that is seen impacting some of the nation’s exports. Examining the trend via technical analysis, the pair seems to plum right after testing its resistance level at 1.1019, then it continues to fall. Currently, the pair is testing the first support pivot at 1.0935. The RSI indicator suggests that the pair is in neutral, and the pair is firmly trading above the 100 SMA in the 4- hour chart. Therefore, the pair is expected to keep up its bullish momentum after it tests the level at 1.0935 if there are not any external factors.

Resistance: 1.1019

Support: 1.0935, 1.0822, 1.0773

 

Economic Data