Daily market analysis

July 21, 2021

Daily Market Analysis

Market Focus

US Indices rebounded sharply today as investors stepped in to buy the dip after a huge plummet from delta variant fears sell- off. The Dow Jones up-surged 1.6%, 549.95 points after the previous 725 points- decline on Monday. The S&P 500 climbed 1.52% and the technology heavy- weighted Nasdaq 100 rose 1.57%. This comeback rally activated through the session as a bounce in the Treasury yields above 1.20% soothed some pandemic concerns that would potentially ruin the economic recovery.

Inflation seems to continue be a problem in the market, but the Federal Reserve looks to stay in hawkish stance. While the breakeven rate curve shifted lower, inflation expectation remains uncomfortably high. As of now, five- year breakeven rate is trading at 2.45%, which is above the Fed’s 2% target for the next five years.

The world largest currency, Bitcoin, suffered a brutal month so far as Bitcoin is now trading near the bottom of 2021 trading range. Some analysts observed that it can be the winter for Bitcoin back in 2018, when the price declined by three- quarters. The winter of Bitcoin can potentially flush out a lot of speculations.

      

Main Pairs Movement:

The Aussie halted 4- day drop, rising 0.1% to 0.7334, as stock markets stabilized and crude oil price bounced back a bit, helping revive risk assets. However, the pandemic problem continues to be a huge issue in Australia; half of Australian is still in lockdown as the delta variant spreads across the country.

The yuan finally rose after 3- day slide as risk assets rebound, buying from the dip after a tumultuous trading session on Monday. The yuan climbed 0.1% at 6.4883 against the US dollar,

EURUSD dropped 0.17% to 1.17765, the fresh low since April even major indices rebounded after Monday’s slide.

The Pound declined 0.39% against the US dollar amid the delta variant spreads in the UK. The UK lifted all Covid-19 restriction this week, as a result, the reopening of the UK economy remained doubtful.

       

Technical Analysis:

GBPUSD (4-hour Chart)

Sterling once fell to the daily lowest at 1.357, refreshing another low point in recently, price was closed around 1.3625 aftermath. At the moment, the rapid spread of the Delta variant in the U.K. and prospects of further deterioration weigh on the pound as current stage. For technical aspect, RSI indicator remain setting beneath 30 at over sought territory which suggest a bearish movement for short term. On the other side, 15- and 60-long SMAs both retained downward movement. If market continuously go down, we expect the first immediately support will be 1.36 as pyscholigically spot. On contrast, the first resistance is setting at 1.3665.

Resistance: 1.3665, 1.3745, 1.3896

Support: 1.36

        

AUDUSD (4- Hour Chart)

Aussie had a choppy move in the daily market while once fails to overcome yearly low of 0.7299, currently close around 0.733. The Delta Covid variant break out and reflation fears keep pricing the market sentiment. Meanwhile, copper and oil market rebound from yesterday desperate that gave aussie a breathing room. From the technical perspective, despite RSI indicator close at 33 figure, suggesting pair would under bearish movement for short run. For moving average side, 15 and 60 long SMA countinue it descending way to lower low. To the downside, if pair fails to trade above recently low at .7323 level, it could hand over the fist to next lower stage over even below .7300 level.

Resistance: 0.7415, 0.7492

Support: 0.7323, 0.73

     

EURUSD (4- Hour Chart)

The euro fiber is posting lower lows on a daily basis, and the near-term picture is still bearish as it is throughing in fit and start decending price pattern. For technical side, RSI indicator show 42 figure that hovered by upward impetus from short term, furthermore, getting close to neutral territory. For moving average perspective, 15 long SMA indicator moving along with the price closely as slightly downward movement and 60 long SMA seems losing tailwind momentum, in other word, it getting a flat way.

Base on aforementional, we deem market is rejuvenating to upper stage if market could outstrip the first resistance at 1.1804 around. Moreover, if price could propel to higher, than next price level would eye on 1.1848~1.188.

Resistance: 1.1804, 1.1848, 1.188

Support: 1.1766, 1.17

     

Economic Data

Currency

Data

Time (GMT + 8)

Forecast

AUD


Retail Sales (MoM)

09:30

-0.5%

USD

Crude Oil Inventories

22:30

-4.466M