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Daily Market Report
26 Jun 2020

EURUSD

The EUR/USD pair is closing in the red for a second consecutive day, although the risk-related slump decelerated. The day started with risk-off spreading on the heels of mounting concerns about a possible economic comeback. The US reported the largest one-day number of new coronavirus cases on Wednesday, above 36,000, while the WHO warned that the curve is in the rise in Europe, with an average of 20,000 new cases per day and 700 daily deaths in the old continent. Hopes that economies could bounce in the second half of the year got smashed, and speculative interest is in the process of pricing that in.

The mood improved a bit after the ECB  introduced a new repo facility for central banks outside the Union, mean to address liquidity needs within the ongoing crisis. US data failed to impress, as Durable Goods Orders came in at 15.8% in May, much better than anticipated, while Q1 GDP was confirmed at -5.0%. Initial Jobless Claims for the week ended June 19 were above expected, at 1.48M,  while the Continuing Jobless Claims for the week ended June 12 improved to 19.552 M.

Friday will be a quiet day in terms of data, as the EU will publish money-related figures, while the US will unveil May’s PCE inflation and the final version of the June Michigan Consumer Sentiment Index.

The EUR/USD pair is trading between Fibonacci levels, still holding above the critical 1.1170 price zone, where it met buyers earlier this week. The risk is skewed to the downside, according to technical readings in the 4-hour chart, as the Momentum indicator heads firmly lower well into negative territory, while the RSI consolidates around 42. The 20 and 100 SMA converge around the immediate Fibonacci resistance at 1.1270, losing directional strength.

Support levels: 1.1170 1.1125 1.1080

Resistance levels: 1.1270 1.1310 1.1350  

USDJPY

The USD/JPY pair extended its recovery to 107.44 amid continued dollar demand on a risk-averse environment, ending the day around 107.20, as the dismal mood somehow receded. US indexes spent most of the session in the green, although not far from their daily opening levels. Treasury yields, however, edged lower amid mounting concerns about a second wave of coronavirus contagions, and stubbornly high levels of weekly unemployment claims in the US.

Japan kick-started the day published the April All Industry Activity Index, which declined 6.4% from the previous -3.4%.  Early Friday, Japan will release the June Tokyo CPI foreseen at 0.6% YoY, better than the previous 0.4%. The core reading, which excludes fresh food prices, is foreseen steady at 0.2%.

The USD/JPY pair is gaining upward traction in the short-term, although it still needs to advance beyond the 107.50 Fibonacci resistance level. The 4-hour chart shows that the pair is developing above a mildly bullish 20 SMA, while the 100 and 200 SMA converge a few pips above the mentioned Fibonacci resistance. Technical indicators are advancing within positive levels, although with limited strength.

Support levels: 107.00 106.60 106.25  

Resistance levels: 107.50 107.90 108.20

GBPUSD

The GBP/USD pair is ending Thursday, little changed around 1.2410, reversing an early slide to 1.2388. The UK published the June CBI Distributive Trades Survey on realized sales, which resulted in -37%, missing the market’s forecast of -34%, although better than the previous -50%. Nevertheless, the decline was the result of the ongoing dismal mood, which boosted demand for the American currency.

In the meantime, the UK reported 149 new coronavirus-related deaths in the past 24 hours, as UK health experts warn about an imminent second virus wave due to the government lifting lockdown measures. This Friday, the BOE will publish its Quarterly Bulletin, hardly a market mover.

The GBP/USD pair has posted a lower low and a lower high daily basis, which skews the risk to the downside. Also, the pair has been unable to advance beyond the 23.6% retracement of its latest decline at around 1.2450. In the 4-hour chart, the pair is struggling around a flat 200 SMA and below the shorter ones, while technical indicators head south within negative levels with uneven strength. Another leg south is to be expected on a break below 1.2375.

Support levels: 1.2375 1.2330 1.2280

Resistance levels: 1.2490 1.2520 1.2560 

AUDUSD

The AUD/USD pair has been unable to attract investors this Thursday, spending the day in a 40 pips’ range and ending it little changed around 0.6880. The absence of Australian macroeconomic releases and a holiday in China exacerbated range-trading at the beginning of the day, while for once, the pair ignored stocks’ intraday movements. Australia is in a privileged situation when considering the coronavirus pandemic, as the number of new daily cases remains low, and the situation seems under control, allowing local businesses to resume activity. The country won’t release macroeconomic data this Friday.

The AUD/USD pair is neutral-to-bearish according to technical readings in the 4-hour chart, although selling interest seems quite limited at the time being. The 4-hour chart shows that the pair is developing below the 20 and 100 SMA, both converging around 0.6910, while the 200 SMA keeps heading higher below the current level. The Momentum indicator maintains its bearish slope within negative levels, while the RSI is stable around 45, skewing the risk to the downside without confirming another leg lower.

Support levels: 0.6850 0.6810 0.6770

Resistance levels: 0.6925 0.6970 0.7010

GOLD

Gold changed its course on Thursday in the US session and tested above 1.760$ in the aftermath of the US GDP data. The Bureau of Economic Analysis kept the first-quarter GDP unchanged at -5% in its third estimate as expected. The USD index DXY managed to hold over 97.00 level while Gold barely ended the day in a positive state. On the other hand, for the long run, the IMF predicts a deeper global recession and slower recovery which will support the yellow metal. In the April edition of the World Economic Outlook Report, the IMF projected that the global economy would contract sharply by 3 per cent this year, while the U.S. economy would plunge 5.9 percent. When it comes to 2021, the IMF projected 5.8 per cent growth for the global economy and 4.7 percent for the US.    

In terms of technical levels, over the 1.765$ (May 2020 peak), the resistances might be followed at 1.785$ (2012 multi-time peak), 1.800$ and 1.822$ levels. Below the 1.765$, the supports can be followed at 1.750$(December 2012 peak), 1.738$ (April double top) and 1.700$.

Support Levels: 1.750$ 1.738$ 1.700$    

Resistance Levels: 1.785$ 1.800$ 1.822$


SILVER

Silver outperform Gold on Thursday while the yellow metal was barely on a positive note, Silver managed to hold over 17.60$ level. While the latest move might be an attempt from the Silver’s side to close the gap in Gold to Silver ratio, especially last years central bank’s Goldrush was the main reason behind Gold outperforming Silver. Therefore, Silver still is giving a buying opportunity for the long-run, especially for its industrial demand.

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

After a steady bull run seen in the second half of June, WTI is trying to continue its positive stance after two consecutive days of retracement. While the number of cases in the US is surging, fear of a decline in demand is suppressing WTI. On the other hand, crude oil inventories continue to build up in the US. The weekly data published by the US Energy Information Administration (EIA) on Wednesday revealed that crude oil inventories increased by 1.4 million barrels and hit record levels for the third straight week. However, the positive surprise provided by the US durable goods orders, which surged 15% in May after a 7% slump in April and the lower than expected increment on weekly unemployment claims have revived hopes that the US economy is on track to recovery which will increase the demand for energy.   

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 reversal on Thursday supported by the solid US macro-data. The data published from the US showed that Durable Goods Orders rose by 15.8% in May and surpassed the market expectation for an increase of 10.6%. Moreover, the Bureau of Economic Analysis kept the first-quarter GDP unchanged at -5% in its third estimate as anticipated. Finally, the weekly Initial Jobless Claims arrived at 1.48 million for the week ending June 20th. The data was over the expectations but showed a decline compared to last week. On the other hand, the number of cases continues to surge in the US forcing some states to take countermeasures even though a normalisation state is intact. 

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


MACROECONOMIC EVENTS

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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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