Daily market analysis

June 24, 2021
   

Daily Market Analysis

Market Focus

US equities traded in narrow range as momentum ran out of fuels. The tech heavy Nasdaq 100 index continue to make new highs to 14,274, lifted by rally in Tesla Inc. On the other hand, S&P 500 and the Dow Jones Industrial Average Index closed in the red, dipped 0.11% and 0.21% respectively.

The well-respected Dallas Fed President Robert Kaplan noted that the economy will likely outperform Federal Reserve’s expectation, leading to a possible early start of its tapering program. He explicitly said “I think we’d be far better off, from a risk-management point of view, beginning to adjust these purchases of Treasuries and mortgage-backed securities” during an interview with Bloomberg News. Wednesday’s upbeat manufacturing PMI of 62.6, the highest figure since 2007, further underpins a strong economic recovery in the US.

Treasury Secretary Janet Yellen said her department may start to ease emergency measures to avoid breaching the US debt limit as soon as August. ‘Suspension of debt limit’ means the Treasury Department can borrow as much as they need to pay off its current debts and obligations. With the current suspension set to expire on July 31, Yellen urged Congress to extend the suspension or increase the ceiling, and warned failing to do so would have absolutely catastrophic economic consequences.

                 

Main Pairs Movement:

Major pairs are playing tug of war between gains and losses while trading at familiar levels on Thursday. Sentiment led the way, with currencies following the lead of stocks. USD fell throughout the first half of the day, regaining most of its lost at the final trading session of the day. The exception was USD/JPY which extended to a fresh yearly high of 111.10.

Markit released its June PMIs for all major economies. In general, the manufacturing sector recovery keeps outpacing that on the services sector. Despite mixed numbers, all figures indicated economic expansion.

The euro pair ended the day around 1.1930, slightly lower than yesterday, while cable settled around 1.3970, holding on to modest intraday gains. Commodity-linked currencies advanced against the greenback for a third consecutive day due to rising commodity prices, oil price as an example.

Gold once surged to $ 1,794.98 a troy ounce but changed course during the US afternoon and appeared doji at the end of the day.

Crude oil primers peaked at fresh yearly highs, easing modestly ahead of the close. WTI settled above $ 73.00 a barrel, as well as Brent touched $76 after the EIA reported that stockpiles decreased by 7.6 million barrels in the week ending June 18, better than anticipated.

The Bank of England is having a monetary policy meeting, although no fireworks are expected this time, as the bank won’t publish fresh macroeconomic projections, while there won’t be a speech from Governor Bailey.

           

Technical Analysis:

USDJPY (Four- Hour Chart)

USDJPY edges higher as Bank of Japan points to persistenetly low inflationary pressure while Powell cools down inflationary concern. On the four- hour chart, USDJPY is bullish in the outlook as it is well located in the ascending channel. At the moment, the pair even extends further above the trend line, heading toward the next immediate resistance of 111.10, which gives the pair more momentum to the upside. In the meanwhile, the piar keeps advaning above all of its SMAs, which indicates that the pair is gainning bullish traction. However, the pair might possibly confront an adjustment as the RSI is nearly in the overbought readings whilist the pair has reached the upper bounce of the bollinger band.

Resistance: 111.10

Support: 110.25, 109.72, 109.29

       

EURUSD (Daily Chart)

EURUSD weakens after hitting six- day highs at 1.1970, the highest since last Thursday. Failing to breach its resistance level of 1111 means that the pair is losing its short- term bullish tone. A consolidation will be likely to happen in the range of 1.1945 and 1.1860, which are the immediate resistance and support. On the daily chart, the pair remains bearish as it continues to trade below its SMAs; meanwhile, the MACD signals the note that the bearish momentum continue to be in control. To the upside, the pair needs to climb all the way up above 1.207 to reverse its current bearish mode. Otherwise, the pair remains bearish as the time of writing.

Resistance: 1.1945, 1.2349

Support: 1.1695, 1.1492, 1.1290

         

GBPUSD (Four- Hour Chart)

GBPUSD advances for the third session toward psychological resistance of 1.4000. Despite of still falling below the ascending channel, the pair seems to be on the track toward its bullish mode. Recent bullish move is not over yet, as the RSI is still outside of the overbought terriotry and the MACD is postive, lending supports to bulls. To the upside, the pair is heading to its next immediate resistance of 1.3968; if the pair can successfully breach the level, then it is one step closer back to the bullish trend.

Resistance: 1.3968, 1.4017, 1.4072

Support: 13896, 1.3787

          

Economic Data

Currency

Data

Time (GMT + 8)

Forecast

EUR

ECB President Lagarde Speaks

00:00

N/A

EUR

German Ifo Business Climate Index (Jun)

16:00

100.6

GBP

BoE Interest Rate Decision (Jun)

19:00

0.1%

GBP

BoE MPC Meeting Minutes

19:00

N/A

USD

Core Durable Goods Orders (MoM) (May)

20:30

0.8%

USD

GDP (QoQ) (Q1)

20:30

6.4%

USD

Initial Jobless Claims

20:30

380K