Daily market analysis

Aug 21,2020

August 21, 2020

Daily Market Analysis

Market Focus

Stocks climbed as gains in giant technology companies drove the Nasdaq 100 to a record, tempering concern that a recovery from the pandemic-induced recession will need more time. Treasuries rose. The rally in heavyweights such as Apple Inc. and Tesla Inc. offset a slide for energy producers and banks amid light trading volume.

Earlier Thursday, equities slumped as applications for U.S. unemployment benefits unexpectedly increased, with initial jobless claims climbing to more than 1.1 million. The report reinforces forecasts that improvement in the labor market will occur in fits and starts, with the latest uptick likely representing a pause in that recovery — rather than a substantial change in direction.

On the trade front, China confirmed plans to talk with U.S. officials soon to review progress on their preliminary deal — a rare engagement between the world’s largest economies as relations deteriorate. Speaking in Arizona earlier this week, President Donald Trump said he canceled those plans because he’s unhappy with the Asian nation’s role in the Covid-19 pandemic.

 

Market Wrap

 

Main Pairs Movement

EURUSD close at 1.186 level while dollar swung in disarray market as pressure from progress on the U.S.-Sino trade front was balanced out by geopolitical concerns. In early session, euro managed to rise as much as 0.3% to 1.18639 after Chinese commerce ministry spokesman said China and U.S. have decide to hold a call in near term. Before that, euro ebbed to nadir level at 1.1812 amid thin liquidity.

on the other hands, European Central Bank policy makers expressed uncertainty at their latest policy meeting about economic outlook and the extent to which they will have to deploy monetary stimulus. Notwithstanding bleak prospect in economic aspect, infection is rising across euro boarder that forced some governments to reinstate travel warning and tighten restrictions on mask-wearing and social contact.

At the same time, unemployment is creeping up despite generous furlough schemes in many countries.

 

COVID-19 Data (EOD):

 

Technical Analysis:

EURUSD(H4)

After whipsaw at euro market yesterday, it quells the upwind as ECB released the latest meeting record. The price steady around at 60 SMA in the 4-hour chart but 15 SMA turn back his head. At the same time, RSI index is at 48 around that curb the market flow momentum. we believe euro will consolidate at range 1.1804 to 1.18832. however, Euro-area PMIs will be released today that probably induce more fluctuate if data out of the expectation.

 Resistance: 1.1883, 1.1948

Support: 1.1804, 1.1746

 

GBPUSD(H4)

Sterling hover the yesterday dip as market expected the tension between U.S. and China is undermining, greenback index pulled back as well. On the other hands, U.K. is heading to some crucial eco-data while previous inflation index has beaten the expectation. Other than this, Sterling does not show the torrid as the RSI index under 70 figures but still need be caution that price level is both above 15 and 60 SMA.

Resistance: 1.3235, 1.3275

Support: 1.3086, 1.3131

 

AUDUSD(H4)

Technically speaking, price is holding around 0.7181 level currently after price dropped to uptrend line. For mid-term, 0.7231 will be a strong bullish signal for Aussie. On the other hands, it hovered space is slowing down as risk appetite appears to tepid in the latter half of the week. But on fundamental perspective, market is wagering inflation will rise in further so Aussie manifest would more depend on commodities market movement.

Resistance: 0.7231, 0.7264

Support: 0.7142, 0.7181

 

Economic Data