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Sep 15,2020

September 15, 2020

Daily Market Analysis

Market Focus

According to Bloomberg’s observation, the equity market continues to rise amid a flurry of deal activity and signs of progressive toward a coronavirus vaccine. Oracle Corp., in particular, rose 4.3% on reports that indicate the company is beating Microsoft Corp. in acquiring Tik Tok’s United States operations. On the other hand, stock price of Immunomedics Inc. almost doubled after Gilead Sciences Inc. agreed to purchase the cancer drug maker for $21 billion.

As a result, the S&P 500 reached a week high while the Nasdaq 100 broke a two-day slide. Nevertheless, Chief Executive Officer of Pfizer Inc. claimed that it is unlikely for the U.S. to deploy Covid-19 vaccine to the public before year-end. This information might deter the market’s sentiment as it is basically hinting a further delay in the U.S. market recovery.

Looking ahead, one extremely anticipated mega-merge of UBS Group and Credit Suisse is currently growing in its possibility as people who are familiar with the matter pointed out the UBS chairman has been studying the feasibility and approaches to complete this task.

 

Market Wrap

 

Main Pairs Movement

EURUSD is trading near the 1.19 threshold as the markets are becoming optimistic about the development of a coronavirus vaccine and shrugging off the rising European cases. GBPUSD dipped below 1.2850, failing to gain traction that is created by the market optimism. Additionally, ahead of a critical debate in parliament that will discuss a controversial deal that violates the Brexit, potential, major fluctuation in GBP can be expected. AUD rises against the USD by the end of the American session, in response to the positive tone of Wall Street. The USDCAD pair increased towards 1.3200 amid failing crude oil prices but turned flat on the day near 1.31700 at the time of writing.

 

COVID-19 Data (EOD):

 

Technical Analysis:

NZDUSD(H4)

NZDUSD is edging higher on Monday after closing the previous week modestly lower. After the markets turn optimistic on Monday, the risk-on sentiment strengthen the U.S. stock markets, which in turn, makes it difficult for the greenback to find demand. Despite the fact that New Zealand economic data that showed the country’s Business Performance of Services Index has decreased from 54.4 in July to 46.9 in August, it seems like the market participants are generally ignoring it. The investors’ attention was largely capture by the risk-on sentiment across the U.S. stock market as the three Wall street indexes closes the day with moderate gains. A strong resistance for the Kiwi sits around the 0.6715 level as it was once a resistance for the pair and has now turned into a resistance. On the flip side, pice levels at 0.6685 and 0.6650 are likely to provide some cushion for the pair if the risk-on sentiment is overturned.

Resistance: 0.6780, 0.6745, 0.6715

Support: 0.6685, 0.6650, 0.6620

 

USDJPY(H4)

After rising and fluctuating between 106 and 106.3 regions in the past two weeks, the JPY finally fought back substantially as the pair is currently trading near 105.50 on Monday. This tumble was largely due to the risk-on sentiment that weigh down on the greenback. By looking at the pair’s RSI, we can see that the indicator is approaching the threshold at 30, suggesting the USDJPY is approaching the oversold area. Subsequently, we expect the bulls to step in and stage a bounce back from the short-term price dip in the near terms.

Resistance: 106.25, 106.45

Support: 105.60, 105.30, 104.85

 

XAUUSD(H4)

On Monday, the bulls for XAUUSD has, once again, attempted to break through the critical resistance level in 1965. Considering the fact that the USD has lost its demand across global investors as a risk-on appetite broke out amid markets’ optimism, XAUUSD’s bullish momentum might gain some traction and break above the 1965 threshold. However, with a strong Monday U.S. equity market performance, the short-term surge of the yellow metal might be undermined. Looking ahead, if the gold were pulled back under the 1950 level, it is likely that a fall towards 1924 support would be accelerated. But if the pair can break through the 1968 level, then a rally towards the psychological resistance around 2000 is quite possible.

Resistance: 1968, 1995

Support: 1938, 1924

 

Economic Data