Daily market analysis

Sep 04,2020

September 4, 2020
   

Daily Position Report

Market Focus

The S&P 500 Index retreated from a record high and fell more than 4% in afternoon trading, set for its biggest drop since June amid declines in Apple, Microsoft, Amazon and Facebook. The Nasdaq 100 dropped more than 5%, its biggest intraday decline since March. European stocks erased gains and finished more than 1% lower. Treasury yields dipped and the dollar rose slightly.

Global equities are pulling back hard from unprecedented highs as investors question the justification for steep valuations as the pandemic rages on. While data Thursday showed applications for jobless claims fell last week, U.S. investors may need evidence of a fuller economic recovery after a 60% run-up in the S&P 500 since its March lows. At the same time, PMI performance mixed, ISM Non-Manufacturing PMI demonstrated 56.9 which loss expectation of 57 and drop from 58.1 against last month.

Meanwhile, U.S. health officials have told states to prepare for a Covid-19 vaccine to be ready by Nov. 1, an aggressive goal that suggests availability just before the presidential election. Infectious disease expert Anthony Fauci warned of a potential surge in American cases from the coming long holiday weekend.

 

Market Wrap

 

Main Pairs Movement

The euro headed for the longest losing streak in over two months amid continued long liquidations and stop orders. The dollar and yen gained as stocks fell. ECB Governing Council members voiced concern about the common currency’s appreciation and its effect on exports.

The greenback ebbed amid after news the trade deficit swelled to the widest in 12 years and as service sector data showed modest growth, while labor market data was mixed. The yen is the only currency that gained against the greenback while commodity currencies lead losses as oil fell for a second session.

GBP/USD slips 0.5% to 1.3281; Risks of an unintended breakdown in Brexit talks are increasingly tangible, which is overlooked by both volatility and current spot levels.

 

COVID-19 Data (EOD):

 

Technical Analysis:

USDCHF(H4)

The USDCHF pair is currently trading at 0.9094 during American trading session. Its breakthrough a slightly consolidation range between 0.9111 and 0.9138. meanwhile, 60-MA goes flat since August and 15-MA mixed cross the long-term MA. Furthermore, Swiss franc is still on the slightly downtrend bands accordance with red and purple area. For RSI perspective, index show neutral momentum with 51.3 coincide with the flat 60-MA figures, suggesting a tepid market move in recent.

Resistance: 0.9111, 0.9138

Support: 0.9076, 0.9025

 

XAUUSD(H4)

Gold dipped steeply with second consecutive day and currently trading at 1930.91 which loss $60 against recent high level. For MA perspective, market trade below 60-MA with it slightly down of flat movement and 15-MA plummet to close to 60-MA. Furthermore, gold currently close to bottom zone that form from August. On the other hands, gold market still show bearish which get tamp down by a yellow downtrend line since July, RSI index suggesting market bearish without signal to downwind.

Resistance: 0.7347, 0.7392

Support: 0.7238, 0.7195, 0.7147

 

GBPUSD(H4)

After yesterday suggestion for bearish sterling, it consecutive dropped with second days, currently trading at 1.3281. From RSI indicator, it has shown that the pair dipped below the 50 then hold 44 approximately then we expect it will neutral momentum move today. Overall, sterling retreat from highest level but still on ratchet up trend as yellow mid-term uptrend56 support. It is worth noting that 60-MA shows ebbed dramatically, we suggest focusing on first support at 1.3271 which is a seemly prop up level as it kicks off to breakthrough and soar up to recently high.

Resistance: 1.34, 1.3476

Support: 1.3271, 1.3192

 

Economic Data