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Daily Market Report
19 Jun 2020

EURUSD

The EUR/USD pair has extended its weekly slump below 1.1200, as the greenback benefited from the poor performance of global equities. Fears grew amid a persistent increase in coronavirus cases in the US and a large outbreak in Beijing. China has returned to lockdown in some cities, but US President Trump said that he won’t stop the economic activity. Outbreaks have also been reported in Germany and Portugal. Without a vaccine available, fears that the world’s economic recovery would be delayed even further put investors in cautious mode.

Data coming from the US was mixed, as, for the week ended June 12, Initial Jobless Claims rose by 1.5M above the 1.3M expected. Continuing Jobless Claims in the week ended June 5 came in at 20.5M vs. the 19.8M expected.  The Philadelphia Fed's Manufacturing Index, on the other hand, jumped to 27.5 in June from .43.1 in May. This Friday, the EU will release its April Current Account, while the US calendar has nothing relevant to offer, although US Fed’s Chair Powell is due to participate in a panel discussion about building a resilient workforce during the coronavirus era.

The EUR/USD pair is poised to extend its decline, as, in the 4-hour chart, it has broken below a bullish 100 SMA for the first time in almost a month. The 20 SMA, in the meantime, converges with the 23.6% retracement of the latest daily advance at 1.1270, reinforcing the resistance level. Technical indicators maintain their strong bearish slopes within negative levels and nearing oversold readings. The next Fibonacci support comes at 1.1170, and a break below it could see the pair extending its decline towards the 1.1080 price zone.

Support levels: 1.1170 1.1120 1.1080

Resistance levels: 1.1225 1.1270 1.1310 

USDJPY

The USD/JPY pair is ending this Thursday just below the 107.00 figure, having posted a daily low of 106.66. The Japanese currency benefited from its safe-haven condition as fears dominated the markets throughout the day. Geopolitical tensions in Asia and reports of new coronavirus outbreaks were behind the sour mood. Most global indexes closed in the red, although the NASDAQ managed to post a modest intraday advance. US Treasury yields, in the meantime, eased, with the yield on the 10-year note down to 0.70%.

Japan didn’t publish relevant macroeconomic data at the beginning of the day, but this Friday, the country will publish May National inflation, seen  up by 0.1% YoY. Also, the Bank of Japan will publish the Minutes of its latest meeting.

The USD/JPY pair has tried to recover above the 107.00 level, peaking at 107.12, but spent most of the day below the level. In the 4-hour chart, the 20 SMA gains bearish strength above the current level and above the larger ones, skewing the risk to the downside. Technical indicators in the mentioned time-frame, technical indicators lack directional strength, but hold within negative levels, also favoring a bearish continuation in the upcoming sessions.

Support levels: 106.60 106.25 105.90

Resistance levels: 107.30 107.80 108.20 

GBPUSD

The GBP/USD pair enjoyed a short-lived boost from the BOE Monetary Policy announcement this Thursday, but quickly changed course and fell to its lowest since June 1st. The Bank of England expanded its Assets Purchase  Programme by £100 billion to £745 billion as expected, leaving rates on hold at a record low of 0.1%. BOE’s Governor Andrew Bailey said that the decision on negative rate is not in any sense imminent. He also said that “evidence suggests economic downturn has not been as severe as in May scenario but let's not get carried away." The GBP/USD pair advanced towards 1.2560 but was unable to hold on to gains, accelerating its decline during US trading hours amid resurgent demand for the safe-haven dollar.

This Friday, the UK will publish Publish Sector Net Borrowing, foreseen at £47.3 B in May, and Retail Sales for the same month, expected to have fallen by 17.1% from a year earlier but up in the month 5.7%.

GBP/USD short-term technical outlook

The GBP/USD pair hovers around 1.2410 as the day comes to an end, trading a handful of pips above its daily low. The 4-hour chart shows that the pair plunged below its 20 and 100 SMA, with the shortest about to break below the larger ones, as the price is stuck around a directionless 200 SMA. Technical indicators remain at daily lows, partially losing their bearish strength but still heading south, in line with further declines ahead.

Support levels:  1.2385 1.2340 1.2300

Resistance levels: 1.2450 1.2490 1.2530

AUDUSD

The Australian dollar came under selling pressure at the beginning of the day, as local employment data missed the market’s expectations. According to the official monthly report, the country lost 227K jobs in May, against -125K forecasted. The unemployment rate jumped to 7.1%, while the Participation Rate decreased to 62.9%. The AUD/USD pair fell to the 0.6830 price zone, recovering afterwards to hit a daily high of 0.6902.

The pair resumed its decline during the American session and bottomed at 0.6835, ending the day a handful of pips above this last, weighed by the sour tone of equities. Australia won’t release macroeconomic data this Friday.

The AUD/USD pair is offering a neutral-to-bearish stance in the short-term. The 4-hour chart shows that it is ending below its 20 and 100 SMA, while technical indicators stand at daily lows, the Momentum heading lower and the RSI consolidating around 42. Given the risk-off mood, chances are of another leg lower, particularly if the pair extends its decline below the mentioned 0.6835 level.

Support levels: 0.6835 0.6795 0.6760

Resistance levels: 0.6935 0.6980 0.7020

SILVER

Silver also followed Gold on Thursday failing to break the important resistance level at 17.60$ which is the lower consolidation zone top. Usually, silver trade is more volatile compared to Gold. On the other hand, investors buy Gold and Silver if central banks ease monetary policy. Also, Investors also buy Gold and Silver if interest rates (nominal and real) are low and/or decline and when the US dollar declines. However, markets faced a contrary scenario when Wall Street melted when the coronavirus pandemic first hit as investors ditched their profitable positions in precious metals to save their positions in equity markets. Current status of the Gold to Silver ratio signals a correction rally in Silver as soon as the industrial demand picks up pace. Therefore Silver can be a good long-period trade still.

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, the resistances are lined at 17.60$ (%38.20 14.29$-19.65$), 18.38$ (%23.6 14.29$-19.65$) and over that 18.70$.

Support Levels: 16.97$ 16.33$ 15.55$

Resistance Levels: 17.60$ 18.38$ 18.70$


CRUDE WTI

WTI’s three-day winning streak was halted on Wednesday but the black gold managed to pick up the pace and test 39.00$ on Thursday trading. OPEC and non-OPEC producers' Joint Technical Committee (JTC) didn't make any recommendations for a further extension of the current oil output cuts, Reuters reported on Wednesday, citing OPEC+ sources. On the other hand, OPEC and its allies, a group known as OPEC+, has not discussed output plans for August, Russian energy minister Alexander Novak said after the OPEC+ Joint Ministerial Monitoring Committee (JMMC) meeting on Thursday. On Wednesday, the weekly data published by the US Energy Information Administration (EIA) showed that crude oil stocks in the US increased by 1.2 million barrels in the week ending June 12th. Moreover, the underlying details of the report revealed that the US oil production last week fell to its lowest level since March 2018 at 10.5 million barrels per day.

WTI’s rally seems like it lost steam at 40.00$ barrier waiting for a fresh catalyst to move up. 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

Dow Jones had a limited range trading session on Thursday and managed to end the day a tick over 26.000 level. The US labour department reported a rise of  USD 1.508 million claims for the week ended Jun. 15, this was above the analyst consensus of USD 1.3 million and pushed the total number of people who lost their jobs in the pandemic period to 50 million. As the coronavirus pandemic still weighs on the markets, The US President Donald Trump said the government would not enact a new round of restrictions if the situation worsened and kept the economy open. On the other hand, as a number of countermeasures taken in Beijing with the rise of cases, the CDC said they have the Beijing outbreak under control. Today Powell will have his last round of statement which will be closely monitored by the markets.

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

XAU

The wait and see mode was mostly intact on Thursday trading as Wall Street gave away some of its gains while the USD index DXY lifted to mid-97.00 level. On the other hand, the US yields moved lower despite a larger than expected US jobless claims. In general, there is confusion in the market in terms of risk appetite. While the expectation of the second wave in coronavirus pandemic and the damage done to economies keeping the risk aversion alive, on the other hand, the central bank’s heavy market intervention with extreme liquidity and almost zero levels interest rates creating a risk appetite for an expected V-shaped recovery.

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$ 


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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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