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Daily Market Report
17 Jun 2020

EURUSD

It was quite a busy day in the news front this Tuesday, with ups and downs in sentiment. Nevertheless, the greenback got to gain against most major rivals, with EUR/USD ending the day in the 1.1260 price zone after hitting a daily high of 1.1353. The shared currency found support during European trading hours in an upbeat  German ZEW Survey showed that Economic Sentiment improved in June, as the German index came in at 63.4 while for the whole EU, it resulted in 58.6. Inflation in the country met the market’s expectations.

Meanwhile, global indexes were on the rise amid news that the Federal Reserve will include corporate bond-buying, later boosted by US Retail Sales, up by 17.7%, largely surpassing the market’s expectations. Also, equities were underpinned by news that a commonly used steroid seems to be having a positive effect to fight COVID-19.  

Optimism faded as the number of coronavirus cases soared in some US states, and Beijing reported a “serious” expansion of the virus, while US Fed chief Powell said that corporate bond-buying probably won't be aggressive and is more of a contingency plan, within his testimony before Congress. Equities trimmed gains, backing dollar’s gains in the US afternoon. This Wednesday, the EU will release it’s May inflation figures, with annual inflation seen at 1.6%. The US will publish housing-related data, while the Fed will testify again before Congress.

The EUR/USD pair continues to trade around the 23.6% retracement of its latest daily advance at 1.1270, turning bearish in the short-term. The 4-hour chart shows that the pair was unable to hold above a bearish 20 SMA, currently around the 1.1300 level, while technical indicators turned south, entering negative territory. The pair held above Friday’s low at 1.1212, which continues to limit the downside. Below it, 1.1170, the 38.2% retracement of the mentioned rally, provides a more relevant support level.

Support levels: 1.1215 1.1170 1.1120

Resistance levels: 1.1310 1.1350 1.1390  

USDJPY

The USD/JPY pair is ending the American session around 107.30, unchanged for a second consecutive day. The pair advanced during the Asian session to 107.64, as local share markets got boosted by news indicating that the Fed would include corporate bonds to its buying program. Bulls, however, were not interested and quickly left the pair, holding around the mentioned level, in spite of US indexes extending their rally. Positive news, related to a coronavirus treatment and upbeat US Retail Sales, overshadowed concerns about a second wave of coronavirus contagions in the US and a less aggressive Fed.

The Bank of Japan had a monetary policy meeting, and, as widely expected, rates were left unchanged.  Policymakers, however, decided to further boost its support program to 110 trillion yen, which fell short of triggering some action across the board. Japan will publish this Wednesday its May Merchandise Trade Balance, expected to post a deficit of ¥970.8 B

The USD/JPY pair continues to offer a neutral stance in the short-term, although the risk remains skewed to the downside, as it’s unable to advance beyond the 23.6% retracement of its latest daily decline. The 4-hour chart shows that a flat 200 SMA caps the upside, while a mild-bullish 20 SMA contains slides. Technical indicators, in the meantime, turned south, currently hovering around their mid-lines.

Support levels: 106.95 106.60 106.25

Resistance levels: 107.80 108.20 108.50  

GBPUSD

The GBP/USD pair peaked this Tuesday at 1.2687, holding on to gains after the release of mixed UK employment data, to later fell amid renewed demand for the greenback. According to the  Office for National Statistics, the ILO unemployment rate in the kingdom held at 3.9% in the three months to April, beating expectations of 4.5%. On a down note, the number of people claiming jobless benefits rose by 528.9K in May, worse than anticipated, while the April reading was upwardly revised to 1032.7K. The claimant count rate jumped to 7.8% vs. 5.8% previously.

This Wednesday, the UK will publish May inflation data. The Consumer Price Index is foreseen at 0% when compared to the previous month, while the annual reading is expected at 0.5%.

The GBP/USD pair is trading near a daily low of 1.2552, with the bearish potential increasing as the day comes to an end. The 4-hour chart shows that the pair is crossing below a bearish 20 SMA, although still above the larger ones. Technical indicators, in the meantime, have entered negative ground, but lack strength enough to confirm a bearish continuation.

Support levels:  1.2525 1.2470 1.2410

Resistance levels: 1.2605 1.2650 1.2695  

AUDUSD

The AUD/USD pair ends Tuesday with modest losses just below the 0.6900 level, retreating from a daily high of 0.6976. The pair spent most of the day in higher ground, falling within the US session on the back of upbeat American data and falling equities. Wall Street recovered ahead of the close, helping the pair to recover some of the ground lost.

The RBA released the Minutes of its latest meeting, which showed that policymakers aim to maintain the target for three-year yields until progress towards the bank’s goals is seen in employment and inflation. The same applies to the cash rate at record lows. This Wednesday, Australia will publish April New Home Sales and the Westpac Leading Index for May, previously at -1.5%.

The AUD/USD pair is holding on to its positive bias despite its latest retracement. In the 4-hour chart, the pair remains above all of its moving averages, with the 20 SMA providing intraday support at 0.6875. Technical indicators have retreated from intraday highs but pared their declines around their mid-lines. The risk will turn south on a break below 0.6840, a relevant static support level.

Support levels: 0.6875 0.6840 0.6795

Resistance levels: 0.6935 0.6980 0.7020

GOLD

 

Gold had an indecisive trading day on Tuesday fluctuating between 1.716$ and 1.730$. On Monday, Fed's announcement that it will start purchasing a diversified range of investment-grade US corporate bonds while on Tuesday robust retail sales from the US shifted the risk appetite. The USD index DXY lifted over 97.00 level in the aftermath of the strong rebound in retail sales data. On the other hand, Powell’s statement was not that different from the FOMC. Powell stated in his speech that there is a reasonable probability that more support will be needed from Congress and the Fed to aid recovery. In the long run, the Fed’s ultra dovish stance combined with low inflation in the US will most likely support Gold. According to local reports in China, parts of Beijing are on lockdown again with schools closed again, while cases in some U.S. states are also on the rise as businesses reopen. It is reported that 79 cases were confirmed in four days in China, which means that the coronavirus identified in Beijing is more contagious than the one found in Wuhan. However, an upbeat trial result for a COVID-19 treatment also created a positive mood.

From the technical point of view, as long as Gold decisively stays over 1.700$, the resistances might be followed at 1.738$ (April double top) 1.750$ (December 2012 peak) and 1.785$ (2012 multi-time peak). Below the 1.700$, the supports might be followed at 1.650$ and 1.615$.

Support Levels: 1.700$ 1.650$ 1.615$

Resistance Levels: 1.738$ 1.750$ 1.785$  


SILVER

Silver had a better day compared to Gold on Tuesday while the global equity markets rallied with the USD index DXY tested over 97.00 level. As the industrial sector starts to recover due to data reading in leading global markets, Silver will most likely close the gap with Gold. On the other hand, both Silver and Gold benefit from the weak USD which will likely continue until 2022 as mentioned by Fed’s Powell. 

As 16.97$ (%50.0 14.29$-19.65$) stands as critical support, below this level, a test of 16.33$ (%61.8 14.29$-19.65$) and 15.55$ (%76.40 14.29$-19.65$) can be targeted. On the top side, over the 17.60$ (%38.20 14.29$-19.65$) resistance, 18.38$ (%23.6 14.29$-19.65$), 18.90$ (January and February peak zone) and 19.67$ (2019 peak) can be followed as targets up. 

Support Levels: 16.97$ 16.33$ 15.55$

Resistance Levels: 18.38$ 18.70$ 18.90$


CRUDE WTI

WTI kept its three-day winning streak on Tuesday testing 39.00$. The positive outcome of the retail sales data in the US supported the risk sentiment on Tuesday and fueled hopes of a faster recovery amid rising numbers of coronavirus cases in the US. On the other hand, the sentiment around the black gold was also supported by the optimism over the adherence to the OPEC and its allies (OPEC+) output cuts deal by its members. The OPEC+ pact optimism offset worries over the second-wave of coronavirus and its impact on the global economic recovery.

A decisive move over 32.81$ (65.62$-0.00$ %50) might carry WTI to 40.56$ (65.62$-0.00$ %61.80), 50.00$ and 54.00 levels. Below the 32.81$ level, 31.00$, 27.40$ (9th of March dip) and 26.00$ levels can be targeted.

Support Levels: 31.00$ 27.40$ 26.00$

Resistance Levels: 40.56$ 50.00$ 54.00$


DOW JONES

Wall Street was supported on Tuesday with solid retail sales reading in the US as the economy re-opens, consumer spending rocketed. The 17.7% rise in overall sales easily beat the previous 6.7% record of October 2001 reported by the Commerce Department on Tuesday and more than doubled the consensus forecast of 8%.  May’s eager resumption immediately followed the revised April decline of 14.7%, originally -16.4%, which is the largest one month drop in the 28-year series. Also, the Federal Reserve widened its program for buying corporate debts extended to minimum rating, maximum maturity and other criteria on Monday supported the recent incline. On his statement, Powell did not surprise the markets as his speech was not that far away from the FOMC statement. Once again, Powell confirmed that the Fed will support the markets for recovery while fears of a second wave persist.   

Below the 25.000 level, 24.719 (21.712-29.585 %61.80) 23.500 and 23.000 levels can be followed as support levels while a steady close over 25.667 (21.712-29.585 %50) will most likely to carry Dow Jones to 26.000, 26.577 (21.712-29.585 %38.200) and 27.000 levels.

Support Levels: 25.000 24.719 23.500 

Resistance Levels: 26.000 26.577 27.000


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* All the Moving Average support and resistance levels are dynamic by nature. Means when the price approaches the Moving averages, slight variation occurs in the forecasted Moving Average support and resistance levels. Previous few days’ intraday levels are also signicant while trading the current day as the price tend to hover around these levels for some time. Levels in red indicate strong, critical or vital.

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