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Daily Market Report
17 Jul 2020

EURUSD

The EUR/USD pair is ending Thursday with modest gains just above the 1.1400 level. Market players were unable to find a reason to be optimistic, despite encouraging data coming from China and the US. It seems that concerns about resurgent coronavirus cases in the northern hemisphere and a further delay in an economic recovery have started sinking in. Also, mounting tensions between the US and China weighed on mood, as the US government is said to be considering a travel ban on Chinese communist party members. The European Central Bank left its monetary policy unchanged, and policymakers repeated that stand ready to act as appropriate, to maintain price stability.

It was a non-event, as other central banks these days, who decided to adopt a wait-and-see stance. US data were generally encouraging but failed to impress. Retail Sales jumped 7.5% in June, beating the market’s expectations. The Philadelphia Fed Manufacturing Survey came in at 24.1 in July, better than the 20 expected. Initial Jobless Claims for the week ended July 10 were a miss, surging to 1.3 million, although Continuing Jobless Claims improved by more than anticipated, printing at 17.338 million in the week ended July 3. This Friday, the EU will publish June inflation, foreseen at 0.3% YoY. The US will release the preliminary Michigan Consumer Sentiment Index for July, foreseen at 79 from 78.1 in June.

The EUR/USD pair is trading below 1.1400 as the day comes to an end,  partially losing its positive bias. The 4-hour chart shows that the pair met buyers around a mildly bullish 20 SMA, now struggling around it, while the 100 and 200 SMA advance below the shorter one. Technical indicators, in the meantime, continue to retreat within positive levels, instead of reflecting the absence of buying interest than suggesting an upcoming slide. The main resistance level continues to be 1.1460, while a corrective decline could near the 1.1300 figure this Friday.

Support levels: 1.1375 1.1340 1.1300

Resistance levels: 1.1420 1.1460 1.1495  

USDJPY

Rising demand for the greenback has helped to lift USD/JPY at the end of the day, with the pair heading into the Asian session trading near a daily high of 107.38. Trading remained dull around the pair, still confined to familiar levels. The pair started the day falling sub-107.00, dragged lower by the poor performance of Asian equities, which extended into the next two sessions. The greenback reacted late to the sour mood, as it was only able to attract investors late in the American session.

Japan didn’t publish relevant macroeconomic data early on Thursday, and the calendar will remain empty in the country this Friday.

The USD/JPY pair maintains its neutral stance, as, in the 4-hour chart, the pair continues to hover around directionless moving averages, all of them confined to a 30 pips’ range. The 200 SMA stands flat around 107.50, and the pair has been unable to surpass it ever since the week started. Technical indicators advanced, with the RSI heading higher within positive levels, but the Momentum stuck around its midline. Nevertheless and given the sour market mood, chances of further gains seem quite limited for this Friday.

Support levels: 106.95 106.60 106.20  

Resistance levels: 107.50 107.90 108.30

GBPUSD

The GBP/USD pair peaked at 1.2624 during US trading hours, giving up some ground to end the day little changed around 1.2550. The UK released its latest employment figures, which were better than anticipated, but were unable to underpin the pound. According to the Office for National Statistics, the official jobless rate remained unchanged from the previous 3.9% in the three months to May, while the claimant count change showed an unexpected decrease last month, as the number of people claiming jobless benefits fell by 28.1K in June, against expectations of a 250K gain.  

The slide at the end of the day could be attributed to the dismal market mood favoring demand for THE safe-haven dollar. The UK will publish the July GFK Consumer Confidence index early Friday, foreseen at -26 from -27 previously.

The GBP/USD pair is struggling around a mildly bearish 20 SMA in its 4-hour chart, but still developing above the larger ones. Technical indicators, in the meantime, ease within neutral levels, reflecting the absence of real interest around the pair. It seems unlikely that the pair could make a relevant directional move this Friday, but is rather likely  to remain within its weekly range.

Support levels:   1.2520 1.2480 1.2430

Resistance levels: 1.2615 1.2660 1.2695 

AUDUSD

The AUD/USD pair trimmed Wednesday’s gains, ending the day in the red yet around 0.6970. Encouraging data released at the beginning of the day was offset by concerns about the future of the global economy, as the coronavirus pandemic seems only to be getting worse. The number of global cases is on the rise and above 13 million, and small outbreaks are being seen worldwide, leading to some new lockdowns.

The market ignored the fact that Australia added 210.8K jobs in June, almost doubling the market’s forecast, while the unemployment rate met the market’s expectations at 7.4%. Additionally, HIA New Home Sales soared in May by 87.2%. News coming from China were also encouraging, as the Q2 GDP resulted at 11.5%, beating the expected 9.6%, while Industrial Production in the country rose in June by 4.8% YoY. The only miss was Retail Sales, which in the same period declined by 1.8%.

The AUD/USD pair retains its neutral stance, with the bearish potential limited. In the 4-hour chart, the pair is hovering around a flat 20 SMA but above the larger ones, as technical indicators ease within positive levels, reflecting the ongoing retracement from recent tops, but far from supporting a bearish extension ahead. For that to happen, the pair would need to lose the 0.6895 level, the base of its latest range.

Support levels: 0.6940 0.6895 0.6850

Resistance levels: 0.7025 0.7060 0.7100

GOLD

Gold trading had a hit on Thursday sliding below 1.800$ with the USD index DXY managed to pick up the pace. The index managed to escape from 96.00 flat level to 96.30 level with the help of risk-off tone seen in markets. While the tensions between the US and China escalates, the headline GDP jumped 11.5% in Q2 after -10% in Q1, leaving the economy up 3.2% over Q2 2019 in China. On the other hand, from a broader perspective, extreme liquidity and negative real rates create a bearish outlook for the USD and bullish for Gold in the long run.

If Gold prices will continue to stay over 1.800$ decisively, next target might be followed at 1.825$ (2011 August close), 1.900$ and 1.922$ (all-time high). Below the 1.800$ level, the supports can be followed at 1.750$(December 2012 peak) and 1.738$ (April double top). 

Support Levels: 1.800$ 1.750$ 1.738$

Resistance Levels: 1.825$ 1.900$ 1.922$ 


Gold

 

 

 

SILVER

Silver retraced back alongside Gold but managed to keep its 19.00$ level on Thursday amid the upsurge seen in the USD. While the physical demand is slowly returning to the markets, the current monetary policy and risks of a yield curve control will most likely boost the precious metals. Given the broken Gold to Silver ratio, Silver trade might be more profitable in the long run compared to the expected bull run in Gold. The current lag seen in Silver is solely caused by its industrial usage and as the production activity picks up the pace, Silver will find the catalyst needed.

Above the 19.00$ level, next targets can be followed at 19.64$ (2019 high), 20.00$ and 21.00$ (2016 high). On the other hand, below the 19.00$ supports can be followed at 18.38$ (14.29$-19.64$ %23.60) and 17.60$ (14.29$-19.64$ %38.20).

Support Levels: 19.00$ 18.38$ 17.60$

Resistance Levels: 19.64$ 20.00$ 21.00$ 

 

silver

CRUDE WTI

WTI is fighting hard to protect its hard-earned 40.00$ level signalling the current move up is a fragile one and lost steam. OPEC+, a group of major oil producers led by Saudi Arabia and Russia, will ease output cuts to 7.7 million barrels per day (BPDbpd), starting from August from 9.7 million BPD currently. Saudi Arabia is confident that the extra supply due to easing of production cuts will be consumed by a recovery in demand. As such, there would be a negligible impact on oil prices as the supply and demand will balance. On the other hand, crude oil stocks change in the US was -7.5 million barrels in the week ending July 10th, the weekly report published by the US Energy Information Administration (EIA) revealed on Wednesday. This reading came in higher than the market expectation for a decline of 2.1 million barrels.

If WTI manages to hold over 40.56$ (65.62$-0.00$ %61.80) level, the targets upside can be followed at 41.00$, 46.57$ (March decline start) and 50.00$ levels. Below the 40.00$, the supports can be followed at 39.00$ and 32.81$ (65.62$-0.00$ %50) levels.

Support Levels: 40.00$ 39.00$ 32.81$ 

Resistance Levels: 41.00$ 46.57$ 50.00$


oil

DOW JONES

Dow Jones had a Doji candle on a daily basis failing to find a direction. While the earnings season is fueling the risk appetite with strong results and the macro data showing strong signals for recovery, the incline seen in new coronavirus cases is suppressing the bullish move. Last Tuesday, the volatility index VIX hit to its highest level since 2014 indicating the cautious mood in Wall Street. Also, The bullish rhetoric was also supported by the Fed’s Beige Book report that showed US companies had experienced an increase in activity at the beginning of the month, as some states relaxed the lockdown. At this point, the extreme liquidity in the US is trying to find a place to flow and despite all the negative developments regarding the pandemic which is far from over and the escalating tensions between the US and China Wall Street is attracting investors.

Over the 26.000 level, the resistance can be followed at 26.875 (29.568-18.158 %76.40), 27.583 (June 2020 high) and 28.000 levels. On the other hand, below the 26.000 level, targets downside can be followed at 25.210 (29.568-18.158 %61.80), 24.690 (2020 April-May resistance) and 23.863 (29.568-18.158 %50.00).

Support Levels: 26.000 25.210 24.690

Resistance Levels: 26.875 27.583 28.000 

DowJones

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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