The dollar is undermined by the existence of a further escalation in tensions between the White House and Beijing
Market Focus Major U.S. indexes climb, buoyed by Chinese stimulus overnight, as of writing. The S&P 500 aims at its before the pandemic closing- record; the Nasdaq outperforms as a jump in several technological companies. In the meanwhile, China has decided to roll over medium-term loans and keep borrowing costs constantly for banks, assisting to life Chinese stocks as well …
Major U.S. indexes climb, buoyed by Chinese stimulus overnight, as of writing. The S&P 500 aims at its before the pandemic closing- record; the Nasdaq outperforms as a jump in several technological companies. In the meanwhile, China has decided to roll over medium-term loans and keep borrowing costs constantly for banks, assisting to life Chinese stocks as well as investor’s confidence.
After releasing the CPI last week, the Federal Reserve announces that it will soon reveal a subtle plan in how it will conduct monetary policy for the United States. The Fed has officially embraced a more relaxed perspective on inflation, setting the benchmark rate at 1.5%. At the same time, the Fed also suggests that the expectation of imposing a negative interest rates policy would not be an option in the U.S. The Fed believes that it will essentially undermine the entire premise of U.S. banking systems and U.S. financial markets.
The dollar drops about 0.60% on a daily basis against the Aussie as a deadlock in the U.S. stimulus negotiations weighted on the dollar. At the same time, the dollar is undermined by the existence of a further escalation in tensions between the White House and Beijing; besides the recent controversy on WeChat and TikTok, the U.S. Commerce Department also discloses that it adds 38 Huawei facilities to the blacklist, inflaming concerns over a further escalation in U.S.- China relations. With all the downsides, the dollar is under pressure, pushing the AUDUSD pair higher today.
The dollar index drops around 0.20% during American trading session as of writing. The dollar index is falling as investors are uncertain of the currency as a foreign reserve. According to major banks like Bank of America, their recent survey shows that more than 40% of investors expect the amount of the dollar reserves to drop; 30% of them expect the euro to keep up its bullish momentum. Thereafter, the dollar index is in its fourth consecutive days in the red.
The USDCAD is trading around 1.3197 as of writing. The USDCAD pair has failed to challenge the 20 SMA in the 4- hour chart from last week, and now is retesting the downtrend line, signaling high bearish pressure. The first resistance level at 1.3247 is seen as the first downside signal. A valid breakthrough suggests a selling signal. The pair is currently heading to test the support level at 1.3177; if it rebounds, it is likely to be a buy signal. Adding up to the rebounding condition, the RSI indicator seems to almost reach the lower bound at 32.63 mark., implying an oversold. As of now, it cannot confirm the future movement of the pair yet.
Resistance: 1.3247, 1.3351, 1.3414
Support: 1.3177, 1.3090
The EURUSD pair has been trading in a narrow consolidation zone between 1.1772 and 1.1881 for more than a week. The pair is currently trading along with the 20 SMA and the mean in the Bollinger Band. In the meanwhile, the RSI indicator suggests that the pair is still in neutral at a 61 mark. With recent news and fundamentals, the euro still remains the bulls; however, if the pair wants to breakthrough its first resistance, the momentum must need a dynamic push.
Resistance: 1.2004, 1.1881
Support: 1.1772, 1.1714, 1.1591
The USDCHF pair is under selling pressure, and it just merely breaks through its crucial support level at 0.9066. A downside breakout suggests a further drop in the upcoming period; currently, the pair is trading its multi- year lows. Moreover, the pair is trading firmly below the 20 SMA while Ichimoku Cloud also suggests that the pair is in the bearish trend in the 4-hour chart. Thus, USDCHF is anticipated to continue its downward trend.
Resistance: 0.9066, 0.9131, 0.9220
As the dollar continues its bearish manner, it boosts the price of silver
Market Focus U.S. market oscillates while investors digest retail sales reports and pandemic resolutions. Overall retail sales index, 1.2%, has missed consensus estimates, 1.9%, though core retail sales index, 1.9%, surpassed the exception, 1.3%. However, despite of not having impressive numbers on both indicators, the retail sales figures are essentially encouraging because they imply the recovery has continued to grind …
U.S. market oscillates while investors digest retail sales reports and pandemic resolutions. Overall retail sales index, 1.2%, has missed consensus estimates, 1.9%, though core retail sales index, 1.9%, surpassed the exception, 1.3%. However, despite of not having impressive numbers on both indicators, the retail sales figures are essentially encouraging because they imply the recovery has continued to grind on even in the face of the resurgence in coronavirus cases. Recent market phenomenon is showing that the service sector is attempting to recover, but nowhere near pre-COVID-19 level. Thereafter, investors are keeping all eyes on resolutions on the fiscal stimulus package from the White House.
The precious metal, silver has been buoyed by a “trifecta of drivers,” according to Ole Hansen, head of commodity strategy. As monetary easing policies from countries have created further uncertainty about the health of the financial system and real yields are heading into a negative territory, they create an environment with less opportunity cost of investing in an asset that does not offer a return besides the fluctuation in its price, silver. In the meanwhile, as the dollar continues its bearish manner, it boosts the price of silver.
Worse than expected U.S. retail sales figure has further weakened the dollar against the euro. The EURUSD pair has advanced to a daily high around 1.1828 as of writing. In the meanwhile, the euro is supported by EU domestic fundamentals, which have been in turn supporting further the view of a strong economic recovery. On the other side, failing to finalize a stimulus package has continued to reduce the strength of the dollar, thus leading the euro to gain for the fourth consecutive days.
USDCAD advances to 1.3269 during the U.S. trading session. Despite of having a better figure on the Canadian manufacturing sales for June, 20.7%, the CAD fails to benefit from it. Instead, the strength of the CAD is impacted by the U.S.- Iran tensions regarding to the U.S. seizes Iranian Fuel Cargo for the first time. As a result, confidence in the oil sensitive currency has slipped today.
USDCAD rebounds from its previous bearish trend, trading at 1.3252 as of writing. The pair seems to get boosted by an exterior factor, the tensions between the U.S. and Iran. The pair merely breakthroughs its resistance at 1.3247, where the intersection with the 20 SMA as well. It is not hard to see the pair continues to breakthrough the 20 SMA if Iran decides to make any revenges on the U.S. If more exterior factors adding up in the future, the pair can beat its next resistance at 1.3281, followed by 1.3302. The RSI is currently neutral, and MACD indicator is showing a rebound from the bearish trend.
Resistance: 107.9, 109.2, 110.2
Support: 106.1, 104.5, 102.4
The EURUSD has been rejected at the level of 1.1850, and now is challenging again as of writing. The nearest technical support at 1.1793 seems to be rigid because the pair is currently trading solidly above the 20 SMA. The RSI indicator suggests that the pair is still around neutral, at around 59 mark. Thereafter, the pair has confirmed the uptrend, so any pullbacks and corrections are not coming too soon.
Resistance: 1.1850, 1.1877
Support: 1.1793, 1.1752, 1.1714
After pluming about 7.36% in the beginning of the week, the precious metal, gold is back to the consolidation area between 1954.00 and 1910.91, where the resistance and the support are, respectively. Gold’s gain factors still exist, meaning that gold can still rise as long as it is stable above the level of 1910.91. Gold has challenged its first resistance twice, and currently under consolidation mode; Gold is waiting to get a positive momentum to retest the resistance again in the upcoming session. The RSI suggests that gold is still neutral, still having a space for a momentum to go upward.
Resistance: 1954, 1977.38, 2033.30
Support: 1910.91, 1881.12
US equity market was mixed as stimulus negotiations linger
Market Focus US equity market was mixed as stimulus negotiations linger. The White House and the Treasury is $1 trillion away from reaching a deal, “we have made clear to the administration that we are willing to come down $1 trillion if they will come up $1 trillion. We are willing to resume negotiations once they start to take this …
US equity market was mixed as stimulus negotiations linger. The White House and the Treasury is $1 trillion away from reaching a deal, “we have made clear to the administration that we are willing to come down $1 trillion if they will come up $1 trillion. We are willing to resume negotiations once they start to take this process seriously.” House speaker Nancy Pelosi said Wednesday. Meanwhile, Treasury Secretary Steven Mnuchin accused it was Pelosi who refused to compromise, and commented that “Congress could pass a relief plan of ‘a little more than $1 trillion’ and deal with any additional stimulus that’s needed later.”
The United Arab Emirates has confirmed that Israel has agreed on halting its plans to annex Palestinian territories, a potentially historic breakthrough that President Donald Trump said will facilitate peace in the Mideast. “The UAE and Israel agreed to cooperation and setting a roadmap towards establishing a bilateral relationship.” Said Abu Dhabi Crown Price Mohamed Bin Zayed says.
US Jobless Claims fell below 1 million for the first time since this year’s pandemic began, suggesting the US stimulus package is effectively helping to heal its economic wound amid a slowdown in coronavirus infections.
Euro and the sterling had an upper hand over US dollar amid signs that faster US inflation is consuming the greenback’s real yield. The lack of interest in the US long-bond auction has caused the spread between the 5-year and 30-year bond yield to rise to the highest level in more than a month. The Treasury sold $26 billion worth of 30-year bonds at a high yield of 1.406% and awarded 20.72% of bids at high. The 10-year Treasury surged to its highest level since mid-June, up 5% as of writing.
Aussie ignores upbeat employment data, declined 0.29% near closing hours. Australians gained 114.7K new jobs position in July, declined from June’s 210.8K, but still came on top of market expectation of 40K. Aussie outperforms Kiwi, AUDNZD climbed 0.3% as RBNZ indicates it would prefer a weaker currency, the antipodeans pair is on a ten-days winning streak.
Gold experienced yet another volatile day, surged 1.97%. The precious metal is gaining traction amid weaker tone surrounding the US Treasury bond yield, and the deadlock stimulus negotiation.
USDJPY finally made a breakthrough from its medium term descending trendline, though the pair was little changed on Thursday. Price looked pass 106.1 resistance, and is clinging to DMA50 as speculators wait to find trade incentives from Friday’s US Retail Sales or progress in stimulus talks. That being said, the bulls should find acceptence above DMA50 after escaping from the shorter period downtrend highlighted in purple, and try to contest July’s highest point around 107.9. RSI remains netural, while MACD is bullish on the daily chart.
Resistance: 107.9, 109.2, 110.2
Support: 106.1, 104.5, 102.4
USDCAD was extending its slide, and touched the lowest level since February, closed the day down 0.17%. The previous rebound looks faint and the bears took the chance to plunge price toward 1.3215. MACD is reinforcing the bearish bias, and some follow-through should take price further down to 1.3125. Conversely, any attempted recovery will find stern resistance at 1.3342.
Resistance: 1.3342, 1.3494, 1.3628
Support: 1.3215, 1.3125, 1.3035
Euro-dollar pared half of its gain on Thursday, still up 0.25%. The pair could be undergoing a bearish head-and-shoulder pattern on the daily chart as price closed below left shoulder’s high. Traders will be closely watching the formation, if price settled above the head, then it is likely the upward momentum will carry price toward 1.19 horizontal resistance, and possibly 1.2078.
Resistance: 1.192, 1.2078, 1.2203
Support: 1.171, 1.1543, 1.1378
U.S. stocks surges in an across the board rally as investors reacts the rebound of gold, the development of vaccines, and Treasury yields
Market Focus An American biotechnological company, Moderna Inc. reached an unprecedented deal of $1.5 billion with the Trump administration to supply 100 million does of its experimental vaccine for COVID-19. Under the deal, Moderna Inc. will provide about 100 million does, with the price of around $30.50 per person. In the meantime, the U.S. government also has made agreements with …
An American biotechnological company, Moderna Inc. reached an unprecedented deal of $1.5 billion with the Trump administration to supply 100 million does of its experimental vaccine for COVID-19. Under the deal, Moderna Inc. will provide about 100 million does, with the price of around $30.50 per person. In the meantime, the U.S. government also has made agreements with other biotechnological and pharmaceutical companies for potential COVID-19 vaccines, including Johnson and Johnson and Sanofi…etc. With all the potential progress, it essentially elevates the U.S. market.
U.S. stocks and U.S. equities surges in an across the board rally as investors reacts the rebound of gold, the development of vaccines, and Treasury yields retreat to nearly seven- week highs. The S&P 500 gradually approaches the record level prior to when the COVID-19 crashed markets, and the Nasdaq climbs, led by the health care, technology, and utilities sectors.
EURUSD has gone into a consolidation phase in the 1.1780 price zone as of writing. The euro seems to be a little stronger than the dollar after the reveal of U.S. consumer price index report surprises on the upside. U.S. consumer price index comes in higher than expected in the month of July, posting 0.6% verse 0.2% expectation. On the euro side, although the Industrial Production data is slightly worse than the expectation, the shared currency capitalized on risk flows and gathered strength against the dollar.
After surging around 30% this year, the precious metal, gold has once fallen below $1900 per ounce level, and continues its bearish momentum for the second- straight day. The huge pullback suggests that a price movement is driven more by short- term trading than a fundamental shift in sentiment. Another main factor to drag gold down is the boosted by global stimulus plans to support countries’ economies. As the global economy is suffering from catastrophes caused by the pandemic, countries are doing their best to save and revive economies.
GBPUSD extends its decline as of writing. In the 4- hour chart, it shows that a mere bearish mode has contained intraday attempts to advance; at the same time, the pair is currently trading below the 20 SMA. The pair is currently testing its first support level at 1.3029; the bearish momentum will likely accelerate toward 1.2973 level after breaking through its support level. Additionally, MACD indicator advises a selling trend on the doward reversal.
Resistance: 1.3068, 1.3155
Support: 1.3029, 1.2973
USDCHF remains neutral as consolidation is extending. With its resistance level at 0.9192 intact, several failures to challenge the resistance suggest that a further fall is still expected. However, the pair is expected to remain in a consolidation zone for a while since it is trading on the 20 SMA; in the meanwhile, the RSI indicator at the 45.58 mark shows that the pair is neither overbought nor oversold. Though, if the pair eventually breaks through 0.9107, it will likely confirm short term bottoming toward 0.9065.
Resistance: 0.9192, 0.9220
Support: 0.9107, 0.9065
CADJPY extends its bullish momentum as of writing. The pair is testing a new 2- month high, 87.90, back in June 2020. In the short- run, the RSI indicator suggests the condition of overbought, reflecting a positive momentum. In the 4- hour chart, trading firmly above the 20 SMA suggests a bullish mode for CADJPY. That being said, CADJPY is looking for an upside recovery, shifting to bullish in the short run.
Pacific Union LLC is registered in St. Vincent and the Grenadines with registration number: 271 LLC 2020 . Registered address is: 1 Floor, First St Vincent Bank Building, James Street, Kingstown, St. Vincent and the Grenadines.