Daily market analysis

Sep 24,2020

September 24, 2020
   

 Daily Position Report

Market Focus

Stock market slumped to an eight-week low amid warnings from Federal Reserve officials on the need for more stimulus to lift the world’s largest economy from a coronavirus-induced recession.

The S&P500 closed near the threshold that many investors consider to be a market correction, while the Nasdaq 100 tumbled more than 3%, led by mega tech company.  Fed chairman reiterated there’s along way to go for the economic rebound, which will likely require more support. The need for further aid was also stressed by other officials.

The warnings come days after congress all but ended its pursuit of a bipartisan spending bill to focus on replacing justice on the supreme court. It’s another blow to investors who are also watching virus cases tick higher in the U.S. amid a resurgence in infections around the world. At the stage, market players seem growing cautious about the strength of the economic recovery, with the chances for congressional stimulus withering ahead of a contentious election battle.

Market Wrap

 

Main Pairs Movement

Greenback rose to a seven-week high as short positions continued to be unwound against G-10 currencies while emerging-market counterparts remained under pressure. DXY index close above 94.37. The dollar gained as bouts of speculative greenback demand triggered stop loss activity while risk reversals in the dollar index rose in favor of greenback calls.

Meanwhile, Aussie falls as much as 1.4% to lowest since Jul. 24 at .6915 as writing which seems a critical support level as market. On the other hands, kiwi slips as much as 1.5% to it lowest since Aug. 25 at 0.6548 as writing.

Loonie consecutive hovered in recent which is rapidly rebound from earlier this month’s lowest at 1.32 to intraday high at 1.3388. Meanwhile, oil market successive unstable that retreated from intraday highest level at 40.76 to 39.51 around the market close.

 

COVID-19 Data (EOD):

 

Technical Analysis:

XAUUSD (H4)

In the gold 4 hour chart, we see gold extends slide to fresh monthly lows at 1863 while market close. Moreover, it is obviously that gold has already breakthrough pennant pattern and toward to sell off sentiment. For RSI index perspective, it drawdown to 23 , suggesting the over sought condition at the moment. However, we believed it probably slow down the slope of upwind, but it highly chance to successive tamp down.

Resistance: 1880.66, 1908.03

Support: 1846.23, 1813.95

 

GBPUSD (H4)

Cable remained under pressure, ending the day little changed in the 1.2710 price zone as significant support by our print at the chart. The pair advanced during European trading hours, on the back of Brexit-related headlines, as EU’s chief negotiator Michel Barnier said that the EU is determined to get a trade deal with the UK but will be firm. He added that the transition period ends on 31 December and that it cannot be extended. Markit published the preliminary estimate of the UK Manufacturing PMI, which came as expected at 54.3. The services index, however, missed expectations with 55.1. Both figures resulted below the final August readings, signaling a fading economic recovery, by the time the government announced new coronavirus restrictive measures.

This Thursday, the kingdom will publish the CBI Distributive Trades Survey on realized sales, foreseen at -10% from -6% in the previous month.

Resistance: 1.2775, 1.2847, 1.300

Support: 1.2717

 

EURUSD (H4)

The euro dollar fell to 1.1650, a fresh two-month low as Data released this Wednesday was mixed but showed that economic growth remains sluggish. The preliminary estimates of the Markit PMIs showed that services output in the Union fell into contraction territory, with the EU index printing at   47.6 from 50.5 in August. Manufacturing activity was mixed across the Union, although the index improved from 51.7 to 53.7.

Moreover, euro dollar slipped below yellow uptrend and both MA indicator shows downward as well. For RSI index aspect, it settle around 29.9, suggesting over sought already.

Resistance: 0.7227, 0.7266

Support: 0.7155, 0.7136, 0.7092

 

Economic Data