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JUN 29,2020

July 1, 2020

Daily Market Analysis

Market Focus

 

Toward the end of trading Friday, the Dow traded down 2.72% to 25,044.16 while NASDAQ dropped 2.18% to 9798. Additionally, the S&P 500 also fell 2.19%, hitting 3016.20. The main driving force for the poor Wall Street indexes performance is still the accumulating new COVID-19 cases; currently, the US still holds the highest number of coronavirus cases and deaths in the world, reporting a total of 2,422,310 with around 124,410 deaths. Brazil confirmed a total of 1,228,110 cases as Russia reported a total of 619,930 cases.

 

Additionally, the followings are important economic data released today:

 

  • US personal spending rose 8.2% in May while personal income fell 4.2% in May.
  • The University of Michigan’s consumer sentiment index declined to 78.1 in June, versus a preliminary reading of 78.9.
  • The total number of active US oil rigs slipped by 1 to 188 rigs this week, Baker Hughes Inc reported.

 

Market Wrap

Main Pairs Movement

 

European shares closed mostly lower today. The eurozone’s STOXX 600 fell 0.39, the Spanish Ibex Index fell 1.26% while Italy’s FTSE MIB Index dropped 0.57%. Moreover, the German DAX300 dipped 0.73%, French CAC 40 dropped 0.18%, and UK shares increased by 0.2%.

 

In terms of major commodity, oil traded down 1.1% to $38.29 while gold hit 1781.00, which is an increase of 0.6%. Silver traded up 0.6% Friday to 17.995 while copper rose 0.1% to 2.666.

 

Last but not least, in the forex market, USDJPY dropped to a daily low of 106.80 but staged a rebound during the American trading hours. The USD buying picked up pace during the early North American session and pushed the AUDUSD pair to fresh daily lows around 0.6850s.

COVID-19 Data (EOD):

Technical Analysis:

 

EURUSD (H4)

EURUSD enters a series of consolidations on Friday as the pair first hit 1.1238 on the upside during the European session but then resuming the down sliding. The EURUSD later bottomed at 1.1200 zone in the later risk-off session, which is indicated by the overall negativity among the US indexes. In the earlier trading hours, EUR enjoyed a impulse as the comments of ECB president affirmed that the world may have already passed the worst of the coronavirus crisis and that central banks have responded massively to the challenge. However, the risk appetite is crushed as Texas Governor claimed that he plans to roll back economy reopening plans amid the recent surge in new COVID-19 cases. To sum it up, the EURUSD pair has been closely associated with the rising concerns over the virus pandemic, thus, if the US new cases continue to increase, US dollar will rally on investors’ risk aversion.

 

Resistance: 1.1245, 1.1275, 1.1330

Support: 1.1147, 1.1180, 1.1205

 

GBPUSD (H4)

Cable has plummeted intensely as the greenback rallied across the board. GBPUSD tumbled to 1.2314. hitting the lowest price range since May 29. On the downside, if the GBPUSD penetrates 1.2300, the next support is at 1.2292, followed by 1.2250. Considering the increasing risk aversion market sentiment fueled by the second wave of virus pandemic, the extended bearish momentum is likely to pressure the pair down below 1.2300.

 

Resistance: 1.2441, 1.2537, 1.2648

Support: 1.2250, 1.2292, 1.2335

 

USDCAD (H4)

USDCAD broke out of its consolidative range and rose to its multi-week tops around 1.37145 mark during the early North American trading session. However, the pair dropped immediately after it hit the 1.37145 region and has been trading between 1.36500 and 1.36690. Overall, the increasing demand for greenback and the stagnated WTI price (which is likely to be the result of the diminishing demand for crude oil amid increasing virus cases) suggest the pair is going to sustain a relatively bullish momentum in the upcoming trading days.

 

Resistance: 1.3855, 1.3800, 1.3715

Support: 1.3623, 1.3576, 1.3488

 

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