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Daily Market Report
30 Jul 2020

EURUSD

Another relatively quiet session saw the greenback extend its bearish bias against most major rivals. The EUR/USD pair spent the day hovering around the 1.1750 level, waiting for the US Federal Reserve decision on monetary policy. As widely anticipated, the central bank left the funds rate and the pandemic relief programs unchanged. The statement has suffered some minor changes. "Economic activity and employment have picked up somewhat in recent months, but remain well below their levels at the beginning of the year." Also, policymakers added a key line, indicating that the economic recovery will "depend significantly" on the course of the virus.

Thursday will be quite a busy day, starting with German’s preliminary Q2 GDP, with the economy seen shrinking 9% in the three months to June after falling 2.2% in the previous quarter. The EU will publish the July Economic Sentiment Indicator, foreseen at 81 from 75.7 in the previous month. The star of the day, however, will be the preliminary estimate of the US Q2 Gross Domestic Product, expected at -34.1%, a record collapse, after falling 5% in the first quarter of the year.

The EUR/USD pair advanced to fresh yearly highs ahead of the announcement, later extending its gains to 1.1806, retaining its bullish bias as Asian markets kick-in, and despite retreating from the mentioned high. The 4-hour chart shows that a bullish 20 SMA continues to lead the way higher, providing dynamic support around 1.1730. The Momentum indicator has eased within positive levels, reflecting early ranging, while the RSI holds on to overbought readings, advancing modestly at around 71. September 2018 monthly high at 1.1815 is the immediate resistance level.

Support levels: 1.1730 1.1690 1.1650

Resistance levels: 1.1780 1.1815 1.1850 

USDJPY

The USD/JPY pair extended its monthly decline to 104.76 this Wednesday, to stabilize around the 105.00 level after the US Federal Reserve monetary policy decision. The absence of relevant macroeconomic data released at the beginning of the day, and expectations ahead of the Fed’s announcement, kept the pair confined to a tight intraday range, while US policymakers were unable to make a relevant impression on investors.

Wall Street initially gained ground with Powell’s speech statement, but pulled back from intraday highs, anyway posting some intraday gains. US Treasury yields were little changed, with the benchmark of the 10-year note holding below 0.60%.  Early on Thursday, Japan will publish June Retail Trade, seen down 6.5% when compared to a year earlier. Large Retailers’ Sales in the same month are foreseen at -12.3% from -16.7% in the previous month.

The USD/JPY pair is trading pretty much unchanged on a daily basis, but posted a fourth consecutive lower low and a lower high, which skews the risk to the downside. The 4-hour chart shows that technical indicators have recovered from daily lows, with the Momentum indicator approaching its midline, but the RSI steady near oversold readings, hardly enough to indicate an upcoming advance. The 20 SMA, in the meantime, maintains its strong bearish slope above the current level, providing dynamic resistance at around 105.30.

Support levels: 104.75 104.40 104.00

Resistance levels: 105.30 105.80 106.10

GBPUSD

The GBP/USD pair flirted with the 1.3000 level, retreating just modestly from it ahead of the US Federal Reserve announcement, only to surpass it afterwards. Market players had no reasons to buy the dollar as the coronavirus numbers continue to suggest the economic downturn in the country has not yet reached a bottom.

Market players have continued to ignore Brexit-related headlines that paint a gloomy picture for the UK. Despite both parts are committed to reaching a deal, they have failed miserably in finding common ground within discussions. Meanwhile, the UK BRC Shop Price Index came in at -1.3% in June, following a -1.6% reading in the previous month. Consumer Credit in the same period beat expectations, printing at £-0.086 B. The UK won’t release macroeconomic data this Thursday.

The GBP/USD pair retreated from its daily high but trades around the 1.3000 price zone after the dust settled, anyway poised to continue rallying.  The overall positive stance persists, given that, in the 4-hour chart, the pair continues to develop well above bullish moving averages. Technical indicators may have lost their positive momentum but remain well above their midlines, in line with another leg north coming up next.

Support levels: 1.2940 1.2885 1.2830

Resistance levels: 1.3000 1.3045 1.3090

AUDUSD

The AUD/USD pair is ending the day with modest gains near a fresh high of 0.7196, as the greenback remained the weakest currency across the FX board. As expected, the Aussie suffered only a minor set-back after the release of mixed Australian Q2 CPI data. Inflation fell 1.9% when compared to the previous quarter, and was down by 0.3% when compared to the same quarter of 2019, both figures slightly better than anticipated. However, the RBA Trimmed mean CPI declined by 0.1% in the three months to June and was up 1.2% YoY, missing the market’s expectations. AUD/USD bottomed at 11748 for the day, still posting higher highs and higher lows daily basis.

The country will kick-start this Thursday publishing June Building Permits, seen flat in the month, and the Import Price Index and the Export Price Index for the second quarter of the year.

The AUD/USD pair retains its positive bias according to the 4-hour chart, as it continues to develop above a now bullish 20 SMA. Technical indicators, in the meantime, are picking up within positive levels, still below their previous highs, but well above their midlines. Overall, the risk is skewed to the upside, but the pair would need to clearly surpass the 0.7200 figure to be able to extend its gains during the upcoming sessions.

Support levels: 0.7155 0.7120 0.7070

Resistance levels: 0.7200 0.7240 0.7280

GOLD

Gold failed to print a new all-time high on Wednesday in the aftermath of FOMC. The impressive rally recently seen in Gold carried the yellow metal through 1.980$ zone this week so far but the move seems to reach to resistance at this point. FED did not surprise the markets and kept the policy rates at the same level. On the other hand, Powell re-highlighted that they are even not thinking to think when to raise the interest rates amid the current economic situation. As Powell kept his dovish stance, the USD index DXY continued to decline through 93.30 level. Apart from the FED’s dynamics, Gold is also benefiting the fears of a second wave and rising tensions between the US and China.     

As the 2.000$ level is on sight now, as long as Gold stays over 1.950$, the targets upside can be followed at 1.980$ (new all-time high), 2.000$ and 2.040$ levels. Below the 1.950$ the supports can be followed at 1.920$, 1.900$ and 1.825$ (2011 August close) levels.

Support Levels: 1.920$ 1.900$ 1.825$

Resistance Levels: 1.980$ 2.000$ 2.040$


gold

SILVER

Silver lost its momentum and for the second time, this week outperformed by Gold. while tested its all-time high at 1.980$ zone both on Tuesday and Wednesday, after hitting 26.19$ as its highest level since August 2013, Silver kept its foot down hovering around 24.00$ level. On the other hand, The Goldman Sachs analysts, in their latest research note, revised up the silver-price forecast to $30 vs. the previous $22 projection. If the economist activity continues to pick up the pace, Silver will most likely find its much-needed catalyst to resume its rally in the short term.    

Over the 24.00$ level, Silver can target 25.11$ (August 2013 high), 26.23$ (2011-2012 multi-year support) and 28.00$ levels. Below the 22.19$ (2014 high) level, the supports can be followed at 21.50$ and 21.00$ levels.

Support Levels: 22.19$ 21.50$ 21.00$

Resistance Levels: 25.11$ 26.23$ 28.00$


silver

CRUDE WTI

After surpassing the 40.00$ barrier, this time WTI found balance at 41.00$ level waiting for a new catalyst to move up. WTI is suppressed by the heavy incline seen in the new coronavirus cases in the US. On the other hand, the decline seen in inventories did not help the black gold to gain momentum. Crude oil inventories fell by 6.829 million barrels in the week ended July 24, the American Petroleum Institute (API) released on Tuesday showed. Analysts had forecasted a moderate inventory build-up of 357,000 barrels following the preceding week's unexpected rise of 7.544 million barrels. Also, as the USD is keeping its decline along with dovish FED comments WTI is failing to capitalise the decline of its cost at the moment.    

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 managed to re-gain its lost ground on Tuesday in the aftermath of FOMC. As expected, the Fed left the interest rates unchanged as the main focus was of FOMC statement. Powell highlighted the rising number of new cases in the US already started to show its impact on the initial jobless claims and consumer confidence data set. Powell stated that the path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term. On the other hand, Powell highlighted that they still have room for the asset-buying programme signalling they can flood the markets with more USD. However, the investors are willing to stay at the positive side creating a gap between the actual valuation of the stocks and their current levels.    

Technically speaking, over the 26.000 level, the resistance can be followed at 27.000, 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: 27.000 27.583 28.000


dowjones

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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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