Daily market analysis

July 23, 2021

Daily Market Analysis

Market Focus

US markets were led by tech stocks to third straight day of gains even though an unexpected jump in jobless claims that showed some concerns about the economy. Overall, the Dow Jones Industrial Average rose 25.35 points and the S&P 500 climbed 0.2% higher. In the meantime, the Nasdaq 100 gained 0.3%, closing with 14685.60. Investors are continuing to be optimistic as corporate revenue and profits are increasing sharply, leading the economy and the indices to rebound.

US jobless claims of 419,000 showed surprise gain, beating the expectations of 350,000. However, on the positive side, continuing jobless claims declined by 29,000 to 3.24 million, a fresh low since the pandemic happened.

Chinese regulators are being serious on companies who are going to IPO overseas. China has weighted an unprecedented penalty on Didi Global Inc. after its controversial IPO last month. China is considering imposing harsh penalties from a massive fine to even a forced delisting. As a result, shares of Didi plummeted more than 10%, bringing its to 27% losses cumulatively.

             

Main Pairs Movement:

EURUSD traded in the red and at weekly lows, ending with 1.17704. The ECB announced that it will leave rates and the facilities unchanged; the announcement was considered as disappointment as the so- awaited forward guidance was vague.

GBPUSD climbed toward 1.3839 resistance confluence as the BOE is optimistic on the inflation. The BOE sees a good case inflation rise, saying that is temporary.

Bitcoin hovered around 32,000 after Elon Musk and Cathie Wood re- discussed Bitcoin on panel. Specifically, Cathie Wood mentioned that corporations should consider adding Bitcoin to their balance sheets.

       

Technical Analysis:

GBPUSD (4-hour Chart)

Sterling has led gains among in G10 currencies peers, rose 0.4% to 1.3773 as of writing. At the mean time, greemback faced additional stress from unexpected increase in U.S. jobless claim and weaker than expected Chicago Fed National Activity Index for June. For technical aspect, RSI indicator close around 60 figure which suggest cognet bull guideline for at least short term. For moving average side, 15 long SMA indicator strong jumped up to ascending momentum while 60 long SMA indicator remaining a slightly upside but seems flat movement. Overall, we witness the sterling has rebounded as a “V shape” movement already in recently which all supported by buy in momentum and market eye catching, even Kingdom were quirmire in variant worried in early this week though. As current price action, we foresee the market will high probably continue advance to higher stair, but still need to consider whether market impetus could constantly ante buy side momentum or RSI indictor will rapidly head to over bought territory.

Resistance: 1.3896

Support: 1.36, 1.3665, 1.3745

     

AUDUSD (4- Hour Chart)

Aussie settle at 0.738 around as of writing which led by diminished dollar’s demand despite tepid Australian data. Other than this, copper and oil market successive creep up from depression plummet in earlier this week. Meanwhile, 10 year U.S. Treasuries yields fell from nearly 2 rebound market movement, drop 1.71% to 1.268%, shows market in reposition to risk on mode that thrived commodities-linked peers as well. From the technical perspective, RSI indicator gradually ratchet up to 54 figures since at lowest price level, suggesting a benign bull momentum. For moving average side, 15 long SMA indicator has turn north way and 60 long SMA remained decending slope as of writing. To the downside, we still believe 0.73 is a compelling and powerful support. On the up way, we expect 0.7415 would be a stressful resistance as a neck line in lights of price pattern.

Resistance: 0.7415, 0.7492

Support: 0.7323, 0.73

      

EURUSD (4- Hour Chart)

Euro fiber went south 0.14% to 1.1774 which jumped as much as 0.3% 1.183 after ECB revised it guidance on when interest rate might rise to convince investors it won’t revoke support easing program on monetary policy too hastily then pose to derail the economy revival.

Base on price action, euro seems struggle in tiny consolidation range in recent, losing attraction and volatility as well.

For technical side, RSI indicator set 43 figure that feeling suggesting a slightly-bearish guidance for short term. For moving average perspective, 15 long SMA indicator moving along with the price close to a slightly downward movement and 60 long SMA cater to sputter movement.

Following recently suggestion, we deem market is rejuvenating to upper stage if market could exceed 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. On contrast, if price penetrate the first immediately support level that aslo close to current price level, it could toward to 1.17 as our perspective.

Resistance: 1.1804, 1.1848, 1.188

Support: 1.1766, 1.17

     

Economic Data

Currency

Data

Time (GMT + 8)

Forecast

GBP

Retail Sales (MoM)(Jun)

14:00

0.4%

EUR

German Manufacturing PMI (Jul)

15:30

64.2

GBP

Composite PMI

16:30

61.9

GBP

Manufacturing PMI

16:30

62.7

GBP

Service PMI

16:30

62

CAD

Core Retail Sales (MoM)(May)

20:30

-2.2%

USD

Service PMI (Jul)

21:45

64.8