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Daily Market Report
30 Jun 2020

EURUSD

The EUR/USD pair surged to 1.1287 this Monday, changing course during US trading hours to close the day little changed on the upside in the 1.1230 price zone. Financial markets struggled with pandemic-related headlines throughout the day, as the number of cases has continued to rise over the weekend, mainly in the US Southern States. European equities posted modest daily gains, while US indexes followed the lead, with a bit more momentum. The US reported fewer cases this Monday, but there’s a trick to the improvement: usually, the number of cases reported during the weekend decreased, although Arizona informed that one of its testing centers didn’t provide an update, while is a well-known trend that fewer cases are reported on Mondays amid fewer testing and delays during the weekend.

German inflation beat estimates according to June preliminary estimates, recovering from 0.5% to 0.8% YoY. However, the EU Economic Sentiment Indicator for the same month printed at 75.7 from 80 in the previous month. The US, on the other hand, published May Pending Home Sales, which were down by 5.1% YoY against the expected -44.6%,  and the Dallas ed Manufacturing Business Index for June, which improved from -49.2 to -6.1.

This Tuesday, the EU will publish the preliminary estimate of June inflation data, while the US will release the Chicago PMI for June, seen at 45 from 32.3. More relevant, Fed’s head Powell, along with Treasury Secretary Steven Mnuchin, will testify before the House Financial Services Committee.

The EUR/USD pair is hovering around 1.1230 as the day comes to an end, neutral in the short-term. The early attempt to surpass a Fibonacci resistance failed, reflecting the absence of interest. In the 4-hour chart, the pair is trading below a mildly bearish 20 SMA, also below the 100 SMA. Technical indicators, in the meantime, hover around their midlines. The downside is being contained by buyers aligned around 1.1170, while the pair would need to break above 1.1310 to turn bullish.

Support levels: 1.1170 1.1125 1.1080

Resistance levels: 1.1270 1.1310 1.1350  

USDJPY

The USD/JPY soared to 107.88, its highest in three weeks, as the resurgent dollar’s demand coupled with rising equities. Nevertheless, the pair is subject to additional volatility during the upcoming session amid quarter-end flows, and further advances shouldn’t be taken for granted. Meanwhile, government bond yields remained stable, with the yield on the benchmark 10-year Treasury note ending the day little changed around 0.64%.

In the data front, Japan published May Retail Sales, which were up 2.1% MoM, better than anticipated, and down by 12.3% when compared to a year earlier, missing the market’s expectations. Large Retailers’ Sales for the same month fell 16.7% against -11.7% expected. During the upcoming Asian session, the country will release the May Unemployment Rate, foreseen at 2.8%, and the preliminary estimate of May Industrial production, seen down by 5.6% in the month. It will also publish less relevant housing-related data for the same month.

The USD/JPY pair retreated from the mentioned high, now trading around 107.65. It maintains a short-term positive stance, as it settled above the 38.2% retracement of its latest daily slide at 107.50, the immediate support. In the 4-hour chart, the pair is developing below all of its moving averages, with the 20 SMA accelerating higher but below the larger ones. Technical indicators have lost their bullish strength, retreating just modestly from their daily highs. The 50% retracement of the mentioned decline comes at 107.95, the immediate resistance.

Support levels: 107.50 107.10 106.70

Resistance levels: 107.95 108.30 108.65

GBPUSD

The GBP/USD pair has extended its slide to a fresh June low of 1.2251, trading sub-1.2300 heading into the Asian session. The UK published May Mortgage Approvals, which were up by just 9.273K from 15.815K in the previous month, and Consumer Credit for the same month, which came it at £-4.597 B against the £-2.5 B expected.

Brexit talks have resumed between UK’s chief negotiator, David Frost, and EU Michel Barnier, with no real progress reported so far. The EU commission spokesman said that their main target for these upcoming weeks is “to intensify our negotiations in order to make progress in getting a deal. Our goal is to make progress and to reach a deal." Mr. Frost, on the other hand, warned the EU must not drag out Brexit talks into the autumn. Tensions weighed on the Pound.

The United Kingdom will publish on Tuesday the final reading of Q1 GDP, foreseen unchanged at 0.0%, ad Business Investment for the same period.

The  GBP/USD pair retains its bearish stance in the short-term, despite bouncing some 40 pips from the mentioned daily low. In the 4-hour chart, it is developing below a bearish 20 SMA, which accelerated below the larger ones. Technical indicators have bounced modestly from their daily lows, but remain well into negative levels, far from suggesting further gains ahead. The former monthly low at 1.2314 is now the immediate resistance.

Support levels: 1.2250 1.2205 1.2160

Resistance levels: 1.2315 1.2365 1.2410  

AUDUSD

The AUD/USD pair is trading marginally lower daily basis, trading in the 0.6850 price zone as the American session comes to an end. A cautious optimism helped the pair reach a daily high of 0.6890 at the beginning of the day, but the positive mood faded as the day went by. There were no macroeconomic releases from the region that could affect the pair, although reports that China is making progress on a COVID-19 vaccine were behind the early advance. Speculative interest turned into the greenback during the American session, although, as usual, the Aussie remained resilient.

RBA’s Debelle is set to offer a speech during the upcoming session, while Australia will publish May Private Sector Credit. Also, China will publish the NBS Manufacturing PMI and the Non-Manufacturing PMI, both for June.

The AUD/USD pair is offering a neutral-to-bearish stance in the short-term, with the bearish potential limited. In the 4-hour chart, the pair has been unable to advance beyond a mild-bearish 20 SMA, which eases below the 100 SMA. Technical indicators, in the meantime, stand right below their midlines without directional strength. A steeper decline could be expected on a break below 0.6850, the immediate support.

Support levels: 0.6850 0.6810 0.6770

Resistance levels: 0.6890 0.6925 0.6970  

GOLD

After hitting its highest level in eight years, Gold is trying to re-test 1.780$ zone. Despite the surging number of cases in the US, the risk appetite came back to Wall Street and the USD index DXY managed to keep its ground at 97.50 level. Looking more long term, Gold continues to find support from negative yields, both real and nominal. The amount of negative-yielding government bonds around the world rose back above $13 trillion this week for the first time since March while the high of $18 trillion was set in August of last year. On the other hand, the International Monetary Fund (IMF) lowered its economic growth forecast for 2020. The world economy is now projected to plunge nearly 5 per cent this year, a downward adjustment of 1.9 percentage points from the IMF’s April forecast.  

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 kept its wait and sees mode on Monday while the white metal continued to outperform Gold. The latest bull run seen in Gold pushed the Gold to Silver ratio over 100 again creating a buying opportunity for Silver. Since the long term monetary policies around the world are supporting the precious metals, the only obstacle for Silver is the lack of demand as the industrial activity is slowly gathering pace.

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

Hopes of a faster economic recovery despite the number of coronavirus cases surging supported the oil prices on Monday. Also, news circulating about China approving a coronavirus vaccine for military use supported the risk appetite. On the other hand, reports indicating that the OPEC+ compliance in June is also expected to be higher than May, mainly because Saudi Arabia, the UAE, Kuwait and Oman are cutting above their quotas also supported the positive sentiment for the black gold.

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 almost re-gained the heavy losses made on last Friday amid the increase in risk appetite. In the aftermath of the normalisation in the US, the number of coronavirus cases continues to rise fueling fears of a heavier second wave. However, the economic indicators are signalling a faster than expected V-shaped recovery and some positive news regarding the coronavirus vaccine tests in China shifted the risk appetite. The strong stimulus program of the FED supported the stock markets up to now while the USD index DXY is losing its steam barely holding the 97.50 zone. As a result of the lockdown in the US, New future home contracts known as Pending home sales surged 44.3% in May compared with April, according to the National Association of Realtors. That is the largest one-month jump in the history of the survey. It beat expectations of a 15% gain. Sales were still 5.1% lower compared with May 2019, however. Pending sales measures signed contracts on existing homes. Today both Mnuchin, Brainard and Powell’s speeches will be followed for further verbal guidance. 

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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