Daily market analysis

Sep 03,2020

September 3, 2020
   

Daily Position Report

Market Focus

U.S. market rises along with European market as the nearly relentless rally in risk assets continues, encouraged by some constructive U.S. economic report and moderating COVID-19 inflections. U.S. major indices hold a firm advance after a closely watched report on ADP Non- farm Employment Change on Wednesday morning. Tech shares, except Apple Inc. and Tesla Inc., again lead the charge, followed by automakers and utilities shares, pushing all three indices to open higher. Following by the best month for stocks in decades, investors are now putting a high expectation on a combination of support from the Federal Reserve on a solution for COVID-19.

Lebanon starts the formation of a new government with implementing urgent reforms after the previous leadership quitted. With all disasters happened in Lebanon, French president Macron gives Lebanon the ultimatum, which Lebanon has two months to start reform process and cleaned up its mess. President Macron expressed that if there is no progress on a reformation, then there is no need for the international communities, including United Nation, to help Lebanon.

 

Market Wrap

 

Main Pairs Movement

EURUSD falls further to 1.1821 during the U.S. trading session, which is the lowest since last week. The dollar advances broadly today, extending its bounce from a two-year low. The economic report, ADP Non- Farm for the month of August, helped the dollar to climb. In the meantime, the euro comes under pressure after the comment from the European Central Bank as Jens Weidmann, one of European Central Bank council member, who argues that Europe’s monetary support is temporary, and it needs to scaled back after the pandemics.

Oil future drops on Wednesday as it fails to find a support from a hefty weekly drop in U.S. oil supplies and production as output in the Gulf of Mexico, has seen a better- than- expected recovery from Hurricane Laura. According to Energy Information Administration, U.S. crude oil inventories has fallen by about 9.4 million barrels by last week, resulting in Crude oil future to fall around 3 percent at 41.39 as of writing.

 

COVID-19 Data (EOD):

 

Technical Analysis:

EURUSD(H4)

The EURUSD pair is currently trading at 1.1841 during American trading session. It extends its declining trend for the third consecutive day. In the 4- hour chart, the EURUSD pair appears to trade stably below the 20 SMA, finding a short- term resistance of 1.1912. As of now, the pair is heading toward its next support level at 1.1817; if it eventually breaks through, it will have rooms to extend its decline toward 1.1780 zone. Meanwhile, the RSI indicator shows that there are still rooms for the pair to drop because the pair is still neutral.

Resistance: 1.1881, 1.1912, 1.1948

Support: 1.1817, 1.1785

 

AUD/USD(H4)

The AUDUSD pair is trading at 0.7334 during the U.S. session. Today, the Australian dollar is one of the worst performing major currencies, dropping approximately 0.51% against the dollar. In the 4- hour chart, AUDUSD has broken back below 0.7347, which was one of the supports in the short- term. Now, the pair is heading to 0.7238 support zone; meanwhile, it also has broken the uptrend 20- SMA, suggesting a bearish momentum. However, despite of showing a bearish tendency, the MACD signal lines are still above the mid- point; the MACD histogram is showing to sell and although it is bearish, it would be good to see the signal lines join them for a confirmation.

Resistance: 0.7347, 0.7392

Support: 0.7238, 0.7195, 0.7147

 

GBPUSD(H4)

The GBPUSD pair shows a downward trend on Wednesday, currently trading at 1.3352. From yesterday’s RSI indicator, it has shown that the pair was overbought, resulting in today’s reversal trend. Meanwhile, the bearish divergence of the MACD indicator suggests that the Sterling Pound is overbought. Currently, the pair is testing its closest support level at 1.3327; if it eventually breaks through, it is likely to see the pair to push down and fall into 1.3120 zone with some external factors.

 Resistance: 1.3383

Support: 1.3327, 1.3253, 1.3122, 1.3059

 

Economic Data