Daily Market Report
30 Jun 2021

EURUSD

 The American dollar strengthened ahead of the US opening, with EUR/USD extending its slide to 1.1877, its lowest in a week.  Demand for the greenback eased after Wall Street’s opening, despite US data being upbeat. The CB Consumer Confidence index jumped to 127.3 in June, much better than the 119.0 expected. The dollar moved alongside US government bond yields, which peaked at 1.51% but trimmed gains as US indexes reached fresh all-time highs, but ended the day mixed not far from their opening levels.

The EU published the June Economic Sentiment Indicator, which improved to 117.9 from 114.5 in the previous month. The German Consumer Price Index edged lower in June, according to preliminary estimates, printing at 0.4% MoM and 2.3% YoY.  On Wednesday, the EU will publish the preliminary estimate of June inflation, while in the US, the focus will be on the ADP Survey on private jobs creation, foreseen at 600 K in June from 978K in the previous month.

The EUR/USD pair bounced from the mentioned daily low but settled below the 1.1900 level, which favors a bearish continuation. The pair bottomed at 1.1846 last week, with a clear break below the area opening the door for an extension toward the 2021 low at 1.1703. Technical readings in the 4-hour chart favor a continued decline, as the pair is developing below a mildly bearish 20 SMA, while technical indicators maintain their bearish slopes within negative levels.

Support levels: 1.1840  1.1795 1.1750

Resistance levels: 1.1920 1.1980 1.2025  


USDJPY

 The USD/JPY pair seesawed between familiar levels on Tuesday, ending the day with modest losses in the 110.50 price zone. The pair moved alongside US government bond yields, ignoring the fact that US Indexes reached fresh all-time highs. The yield on the 10-year US Treasury note hovered between 1.47% and 1.51%.

At the beginning of the day, Japan published the May Unemployment Rate, which rose to 3% from the previous 2.8%, worse than the expected 2.9%. Large Retailer Sales for May printed at 6%, below the previous 15.5%. This Wednesday, the country will release the preliminary estimate of May Industrial Production, seen at 20% YoY, June Consumer Confidence, foreseen at 34.3, and housing-related data for the same month.

The USD/JPY pair trades near a daily low of 110.42. The 4-hour chart shows that a bearish 20 SMA provided dynamic resistance, currently at 110.70. The Momentum indicator advances within negative levels, indicating a lack of follow-through instead of bearish exhaustion. The RSI indicator remains steady at around 44, keeping the risk skewed to the downside.

Support levels: 110.05 109.70  109.25

Resistance levels: 110.70 111.10 111.50

GBPUSD

The GBP/USD pair returned to its bearish path on Tuesday, ending the day in the 1.3840 price zone after bottoming for the day at 1.3813. The slide was linked to  the dollar’s demand rather than UK news. Anyway, coronavirus and Brexit-related headlines keep affecting Sterling. UK Prime Minister Boris Johnson’s spokesman said that the government expects to agree with the EU an extension to the grace period on custom checks on chilled meats heading to Northern Ireland soon.

Data wise, the UK published May Mortgage Approvals, which improved to 87.5K, beating expectations. Consumer Credit in the same month was also better than anticipated, printing at £0.28 billion. On Wednesday, the country will publish the final reading of the first quarter Gross Domestic Product, expected to be confirmed at -1.5%, and Total Business Investment for the same quarter.

The GBP/USD pair is poised to extend its decline in the near-term. The 4-hour chat shows that the 20 SMA heads firmly lower, currently at around 1.3880, below the longer moving averages, which also head south. Technical indicators, in the meantime, have recovered modestly from their daily lows but remain within negative levels, reflecting limited buying interest. A steeper decline seems likely if the pair slides below the 1.3780 price zone, where it bottomed last week.

Support levels: 1.3810 1.3780 1.3730

Resistance levels: 1.3865 1.3905 1.3950 


AUDUSD

The AUD/USD pair turned south and approached the 0.7500 mark, backed by renewed greenback’s demand and bad news coming from Australia. The country has announced several lockdowns involving roughly 80% of the population, amid soaring coronavirus cases of the Delta variant. Sydney, Brisbane, Perth and Darwin are among those cities that announced restrictions. The country reported over 100 cases in the last few days, a record jump, with just 4% of the population fully vaccinated.

The soft tone of US equities, which ended the day around their opening levels, added pressure on the aussie.  Australia has not released macroeconomic data so far this week, and has only minor figures scheduled for Wednesday as it will publish May Private Sector Credit.

From a technical point of view, The AUD/USD pair is poised to extend its decline. The 4-hour chart shows that the pair pressures its daily lows, while developing far below bearish moving averages. The RSI indicator consolidates around 28, while the Momentum keeps heading south within negative levels, in line with a bearish extension in the upcoming sessions.

Support levels:   0.7500 0.7460 0.7420

Resistance levels: 0.7550 0.7595 0.7630 

GOLD

The price of gold has been under pressure on Tuesday, down some 0.9% into the close on Wall Street on a spot basis. XAU/USD was sitting at $1,761.69 in the close and between the lows of $1,750.74 and the highs of $1,779.03. 

The price printed a fresh low within the daily bearish trend as bears broke the consolidation lows with the greenback dominating the financial markets on Tuesday. Against a basket of currencies, the DXY rose to 92.194 from a low of 91.855. The greenback has benefitted against those nation’s currencies that have experienced a fresh wave of coronavirus cases and the dollar has picked up a safe-haven bid to the detriment of the precious metals in general.

Technically, the price was resisted by the 4-hour 10 EMA and the confluence of the 23.6% Fibonacci retracement level. However, the price has made a 38.2% Fibo retracement on the 4-hour chart where it meets the prior 4-hour lows that acted as resistance on a retest on Tuesday at 1,761. At this juncture, the bias stays with the bears targeting a test of 1,740.

Support: 1,749 1,734 1,720

Resistance: 1,765 1,780 1,796

SILVER

Silver prices were lower on Tuesday, losing over 1.2% with spot XAG/USD at $25.78 by the close of the NY session. The price of XAG/USD ranged between a low of $25.52 and a high of $26.12. The greenback has been proving problematic for the bulls that have been denied a deeper correction of the current daily bearish bias.

The US dollar has climbed to a one-week peak on Tuesday by posting its largest single daily gain in roughly two weeks. The DXY index, a gauge of its value against six major currencies, rose  0.37% to 92.019, posting its biggest daily percentage gain since around mid-June. There will now be a focus on this week’s NFP print to determine the likely trajectory for the greenback for the next few weeks ahead. The potential for a stronger print could inhibit positive flows into precious metals for now and see the price of silver off towards lower daily lows.

Technically, the bulls were denied a strong correction towards the 38.2% Fibonacci of the prior daily bearish impulse and instead, the price melted from the 23.6% Fibo resistance and 10-day EMA. Bears will be looking for a close below the daily support of 25.70 that opens risk towards 25.45 8 and 9 April resistance structure. 

Support: 25.66 25.23 24.92

Resistance: 25.98 26.40 26.72

CRUDE WTI

The price of oil on Tuesday was rising despite expectations that OPEC+ would agree to add new supply when it meets later this week and as cases of the Delta Covid-19 variant continues to climb. OPEC+ is set to meet on Thursday to decide on whether to add new supply to the market in August, with most expecting the group to add at least 0.5-million barrels per day to slake rising demand.

Spot WTI was 0.93% higher in early Asia and had travelled between a low of $72.00 and a high of $73.78 on the day. WTI crude for August delivery settled up US$0.07 to US$72.98 per barrel, Marketwatch reported. August Brent crude, the global benchmark, was last seen up US$0.10 to US$74.78.

Technically, oil is consolidating the bullish trend and has resumed the trajectory, albeit falling short of the recent highs, stalling at a 61.8% Fibonacci retracement at 61.8% near 73.50. The bulls will be looking to defend 72.70 to take on the 74 handle. 

Support: 73.12 72.02 70.07

Resistance: 75.07 76.17 78.12


DOW JONES

After a session marked by lighter than average volume, as the market awaits more economic data, the Dow Jones Industrial Average added 9.02 points, or 0.03%, to 34,292.29. The S&P 500 gained again, adding 1.19 points, or 0.03%, to 4,291.8. The Nasdaq Composite IXIC added 27.83 points, or 0.19%, to 14,528.34.

Meanwhile, the focus is on US data. An upbeat consumer confidence report on Tuesday set a positive tone for jobs data due on Friday. This could sway the US Federal Reserve's policy stance in a number closer to 1 million and set the scene for the summer weeks into the Jackson Hole. 

From a technical standpoint, the index is in the consolidation of the bullish recovery attempts but it could be on brink of a downside continuation to snap the 34,186 recent daily lows. The price is otherwise supported by the meeting of the 10 and 20 daily EMAs.

Support: 34,138 33,775 33,117

Resistance: 34,796 35,159 35,817

MACROECONOMIC EVENTS