LiteForex Analytics

[MikhailLF]

 Brent Crude Oil: oil continues growing

Current trend

Brent crude prices continue upward movement amid rising fears of declining demand due to the repeated outbreak of COVID-19 in China.

As China introduces new restrictions, investors fear another wave of falling demand for energy. This week, schools were closed in Beijing and air traffic was stopped, which alerted markets and triggered a surge in asset volatility.

In relative terms of expectations are stock data from the American Petroleum Institute (API) and the Energy Information Agency of the US Department of Energy (EIA). According to API, weekly oil reserves in storage were 3.900M barrels, which is significantly lower than 8.400M barrels last week. According to EIA, oil stocks showed a slight increase of 1.215M barrels, according to the forecasts of a decrease of 0.152M barrels. Excessive oil reserves in Cushing storage continued to decline, amounting to –2.608M barrels against a projected decrease of 0.183M barrels.

Support and resistance

The price of the asset continues to form global upward correction and this week it broke the Fibonacci retracement level of 38.2% out. Today, the growth may continue and new attempts to consolidate above this level may be made. Technical indicators continue to hold the global buy signal: the range of the Alligator indicator EMAs fluctuations is still expanding, and the histogram of the AO oscillator stays in the positive zone.

Resistance levels: 44.80, 51.00.
Support levels: 38.60, 31.00.

[MikhailLF]

USD/JPY: general review

Current trend

The pair is moderately correcting upward from the opening of trading due to a stable retention of the USD Index above the level of 97 points.

At the end of last week, Policy Board of the Bank of Japan Statement was published. The guidelines for the next period have not changed. The interest rate remains at –0.10%, the purchase of ten-year government bonds will continue with a yield of about 0%, the value of purchases will be increased to JPY 80T. Also, Japan's national consumer price index in May amounted to –0.2%, which is slightly worse than the forecast of –0.1%.

There have been no important statistics from the USA that could affect the exchange rate of USD in recent days, and the USD Index continues to be on Friday quotes, above the level of psychological stability at 97 points, at 97.450.

Support and resistance

The pair continues to trade within the correctional formation between the levels of intermediate and basic Fibonacci retracement. Technical indicators continue holding sell signals. The EMA oscillation range expands with a downtrend, and the histogram of the AO oscillator is trading in the negative zone.

Resistance levels: 107.70, 109.10.
Support levels: 106.60, 105.50.
 

[MikhailLF]

WTI Crude Oil: price continues to rise

Current trend

Oil prices rise slightly near 40.00 amid concerns about the second wave of the COVID-19 pandemic.

It seemed that after the extension of the OPEC+ deal, the black gold market was not in danger, and an early recovery in energy prices could be expected but a new wave of coronavirus was again causing demand to decline. Yesterday, the World Health Organization reported a record increase in the number of infected in the world, the main epicenters of which are the countries of Latin America.

Meanwhile, the spread in the main arbitrage position between Brent Crude Oil and WTI Crude Oil is $2.64, the lowest since the beginning of the year. Such a narrowing indicates the accumulation of a very large position, which, if implemented, will significantly affect the asset quotes.

Support and resistance

The asset continues global correctional growth, and at the end of last week, the price finally fixed above the level of the intermediate correction of 50.0% Fibonacci. Although the global trend indicator Alligator continues to keep a buy signal, the range of EMA fluctuations continues to narrow, and downtrend bars continue to form on the AO oscillator.

Resistance levels: 42.00, 53.00.
Support levels: 35.40, 28.80.

[MikhailLF]

Morning Market Review

United States of America
USD continues weakening against all major currencies included in the USD Index.

USD is declining under the pressure of the tense situation in the country. Mass riots and protests have a negative impact on market conditions. Even positive data on New Home Sales, which in May amounted to 676K against the forecast of 640K, are not able to stop the downtrend. During the day, investors are waiting for the publication of data on price indices and weekly oil inventories, where another reduction is expected.

Eurozone
EUR is strengthening against USD and other major currencies.

Yesterday's data on Manufacturing PMI in Germany in June, which showed an increase to 44.6 points against expectations of 41.5 points, as well as on Services PMI in the eurozone, which also rose to 47.3 points with expectations at 41.0 points, contribute to additional interest in EUR from investors. The main expectations of traders today are associated with the publication of the German IFO Business Climate index for June, which is expected to rise to 85.0 points.

United Kingdom
GBP is strengthening against all major world currencies.

Yesterday turned out to be extremely positive in terms of macroeconomic statistics. Composite PMI in Britain rose to 47.6 points against expectations of 41.0 points. Manufacturing PMI reached 50.1 points against expectations of 45.0 points, while Services PMI rose to 47.0 points, which is much better than the forecast of 40.0 points. The follow-up statement by the Governor of the Bank of England, Andrew Bailey, was also filled with positive rhetoric regarding economic forecasts and the early exit of Britain from the EU.

Japan
JPY is trading in both directions with respect to the major world currencies with a prevailing tendency to strengthen.

Japanese currency was positively impacted by yesterday's data on Services PMI, which rose to 42.3 points from 26.5 points earlier. The investment community also positively accepted the statement of the White House trade adviser, Peter Navarro, who said that the trade deal with China would continue to operate, thereby refuting his previous statements in which he said that the deal could be terminated at any time.

Australia
AUD is strengthening against most major currencies.

The market continues to positively view AUD after a recent speech by the Governor of the Reserve Bank of Australia, Philip Lowe, who assured investors of the stability and high efficiency of the current monetary policy, which allows keeping key indicators at target levels. To a greater extent, this applies to inflation, which does not exceed 2.2%, and the long-term benchmark at a key rate of 0.25%.

Oil
Oil prices show a moderate decline at the beginning of the day.

The energy market continues to be heavily pressured by concerns about the second wave of the COVID-19 pandemic. Yesterday's data on weekly oil reserves from the American Petroleum Institute showed their unexpected increase to 1.749M barrels against expectations of 0.300M barrels. In this regard, the most important for today's dynamics will be data from the Energy Information Agency of the US Department of Energy, as well as data on excess oil reserves in Cushing's storage, which have been declining for 6 consecutive weeks.
 

[MikhailLF]

XAU/USD: gold comes to the fore again

Current trend

Gold quotes stays above the channel resistance line at the level of 1748.0, trading at the level of 1763.0.

The precious metals market is growing. Recently, the instrument was supported by growing fears about a new wave of the COVID-19 pandemic. The number of virus victims in Latin America has already exceeded 100K people, and in some regions of the United States there is an increase in newly detected cases by 25–30% against last week.

The volatility of the US dollar is extremely high, which is a bad signal for conservative investors. The second negative factor is the decline in oil prices. Of the Big Three, only gold remains relatively stable. It causes the inflow of new capital into it, which contributes to the growth of the precious metal.

Support and resistance

The price trades confidently above the resistance level of the sideways channel, and the prospects for further growth are quite high. Technical indicators signal a possible continuation of the uptrend. The range of fluctuations of the EMA indicator Alligator is expanding with an upward trend, and the histogram of the AO oscillator, going into the buying zone, is forming upward bars.

Resistance levels: 1778.0, 1800.0.
Support levels: 1748.0, 1670.0.

[MikhailLF]

 Brent Crude Oil: oil rises again

Current trend

Brent crude oil prices are recovering after a significant drop in the middle of the week on the backdrop of negative news about the increase in stocks in storage.

Stock data from the American Petroleum Institute (API) and the Energy Information Agency of the US Department of Energy (EIA) were unexpected. According to API data, weekly oil reserves in storage were 1.749M barrels, which is significantly higher than the forecast of 0.300M barrels. According to the EIA, oil reserves held by US firms showed an increase of up to 1.442M barrels, with analysts projecting 0.219M barrels. Excessive oil reserves in Cushing’s storage also remained in the negative zone, showing –0.991M barrels after a decrease of –2.608M barrels last week.

Also, quotes could be affected by the EIA report, according to which US oil production grew by 0.5M barrels and reached 11.0M barrels per day.

Support and resistance

The price of the asset continues to form a global upward correction and this week it consolidated above the Fibonacci retracement level of 38.2%. Today, continued growth and new attempts to achieve higher levels are possible. Technical indicators continue to hold the global buy signal: the range of the Alligator indicator EMAs fluctuations is still expanding, and the histogram of the AO oscillator is held in the positive zone.

Resistance levels: 45.75, 51.80.
Support levels: 39.25, 31.66.

[MikhailLF]

Morning Market Review

EUR/USD

EUR is showing moderate growth against USD during today's Asian session, correcting after the "bearish" close of trading last week. The emergence of downtrend in the instrument was facilitated by the growth of correctional sentiment, while fundamentally the situation on the market changes little. EUR is recovering against expectations of the growth of the European economy; however, the outbreaks of disease that are recorded in various countries of the world again suggest the second wave of the epidemic, which can significantly affect the recovery of the global economy. Today, European investors are focused on the publication of statistics on business sentiment in the eurozone in June. Traders also expect the release of data on consumer inflation in Germany in June. Consumer inflation in Germany is projected to rise by 0,3 MoM after falling 0.1% MoM last month.

GBP/USD

GBP shows a slight increase against USD during today's morning session, retreating from local lows since May 29, updated at the end of last trading week. Macroeconomic data from the USA published last Friday turned out to be contradictory; however, on the whole, they contributed to a moderate growth of USD. Personal Spending of US citizens in May increased by 8.2% MoM after a decrease of 12.6% MoM last month. Analysts had expected growth by 9% MoM. Personal Income, on the other hand, decreased by 4.2% MoM after rising by 10.8% MoM in April. Analysts had expected decline by 6% MoM. Michigan Consumer Sentiment Index fell from 78.9 to 78.1 points in June, which turned out to be worse than market expectations of 79 points. Today, investors are awaiting the publication of May statistics on consumer credit in the UK. In addition, a speech by the member of the Monetary Policy Committee of the Bank of England, Gertjan Vlieghe, is expected during the day.

NZD/USD

NZD shows ambiguous dynamics of trading against USD during today's Asian session, located near 0.6400. Investors hesitate to open new long positions on the instrument, responding to alarming statistics that indicate an increase in the incidence of coronavirus in the world. A number of US states suspend the program of gradual lifting of restrictions, which inevitably leads to a revision of previous forecasts regarding the restoration of the global economy. At the same time, consumer interest in NZD is supported by the publication of good macroeconomic statistics. Today, traders expect publication of information on the dynamics of the construction market in the US in May. Also the release of Dallas Fed Manufacturing Business Index in June is expected today. Closer to the end of the American trading session, a speech will be made by the FOMC member, John Williams.

USD/JPY

USD is showing flat trading against JPY during today's Asian session. The instrument unsuccessfully tries to consolidate above 107.00, receiving support from the growth in demand for safe assets. Monday's macroeconomic statistics from Japan turned out to be ambiguous. Retail sales in Japan increased by 2.1% MoM in May after falling by 9.9% MoM a month earlier. At the same time, the annual indicator decreased by 12.3% YoY after a decrease of 13.9% YoY in April. Analysts had expected decline by 11.6% YoY. Large Retailers' Sales fell by 16.7% MoM, slightly correcting from the April rate of decline at 22.1% MoM.

XAU/USD

Gold prices show ambiguous dynamics during today's Asian session, trading near record highs since October 2012. The surge in the incidence of coronavirus is providing significant support to the asset, as investors are again actively talking about the second wave of the epidemic and the return of previous restrictions. In particular, alarming statistics come from the United States, where some states were forced to suspend the phased quarantine cancellation program. Additional support for gold is also provided by the soft monetary policy of the world's leading financial regulators.

[MikhailLF]

Morning Market Review

EUR/USD

EUR is trading in both directions against USD during today's Asian session, consolidating after a moderate increase the day before. Yesterday, the pair managed to demonstrate active growth, but could not consolidate at new highs. The reason for the increase in purchasing activity for the instrument was the publication of good macroeconomic statistics on consumer inflation from Germany. Consumer Price Index in June accelerated from the previous –0.1% MoM to 0.6% MoM, which turned out to be better than expectations. In annual terms, prices added 0.9% YoY with an expected increase of 0.6% YoY. Harmonized Consumer Price Index for the same period accelerated from 0.5% YoY to 0.8% YoY, which also turned out to be better than the forecast of 0.6% YoY. Today, investors expect the release of statistics on consumer inflation for June in the eurozone. Also, traders will be focused on the speech of the ECB Vice President Luis de Guindos.

GBP/USD

The British pound shows ambiguous trading during today's Asian session, trying to consolidate below 1.2300. Yesterday, GBP fell against USD again, updating local lows since May 28, while by the end of the trading session on Monday, the "bulls" managed to partially recoup. At the beginning of the week, GBP was under pressure from macroeconomic indicators released in the UK. Consumer Credit in May decreased by 4.597B pounds after a decrease of 7.425B pounds over the past period. Analysts had expected a decline of 2.5B. The number of Mortgage Approvals in May grew by only 9.273K, which turned out to be significantly worse than the forecasts of 25K. Finally, investors were worried by statements by British Prime Minister Boris Johnson, who noted that he was ready for a dialogue with the EU on the Brexit issue, but was still considering an alternative scenario for the country to leave without an agreement at all.

AUD/USD

AUD strengthens slightly against USD during today's Asian session, continuing to develop a weak "bullish" momentum formed yesterday. Buying activity in AUD remains restrained, as investors assess the prospects of a new wave of the coronavirus epidemic amid an increase in the number of cases in several countries, in particular in the US. Data from China provide some support to the instrument this morning, while Australian Private Sector Lending showed negative results. The Chinese Non-Manufacturing PMI in June showed an increase from 53.6 to 54.4 points. NBS Manufacturing PMI for the same period strengthened from 50.6 to 50.9 points, which also turned out to be better than market expectations of 50.4 points. In the US today, several important statements by officials are expected at once, including a speech by US Treasury Secretary Steven Mnuchin and a speech by Fed Chairman Jerome Powell in the US Congress.

USD/JPY

USD is showing moderate growth against JPY during today's morning trading, located near local highs since June 9, updated the day before. Support for USD is provided by macroeconomic statistics from Japan published on Monday. Japan's Unemployment Rate in May rose from 2.6% to 2.9%, exceeding growth forecasts to 2.8%. Over the same period, Industrial Production fell by 8.4% MoM and 25.9% YoY, while analysts expected a decline of 5.6% MoM and 11.3% YoY. An additional impetus for USD growth was a slight improvement in the dynamics of the number of new cases of coronavirus in the United States over the weekend. The country is experiencing a repeated increase in the incidence of COVID-19, with the result that some states are forced to return some of the restrictive measures.

XAU/USD

Gold prices are consolidating near eight-year highs, supported by rising concerns about the second wave of the COVID-19 epidemic. The growth of cases is recorded in the USA, Brazil and India, which forces investors to reconsider their forecasts regarding the pace of global economic recovery. Only news about the appearance of medicine that can ease the course of the disease, as well as active work on the invention of the vaccine softens the situation. In addition, judging by reports from China, Beijing has managed to take a second outbreak of the disease under control and stop the further spread of the epidemic.

[MikhailLF]

Morning Market Review

EUR/USD

EUR is showing a slight decrease against USD during today’s Asian session, consolidating after an active but multidirectional dynamics the day before. Yesterday, quite a lot of interesting macroeconomic statistics was released in Europe and the USA; however, it did not contribute to the formation of any intelligible vector of movement in the market. Coronavirus again became the main topic of discussion, which was once again emphasized during a joint speech by US Treasury Secretary Steven Mnuchin and the Fed Chair Jerome Powell. Powell tried to soften the overall negative picture, noting that the US economy was able to recover to current levels faster than the initial estimates, but further prospects so far are slim. Today, investors are focused on the June report on the labor market in Germany, as well as data on Non-Farm Payrolls in the US from ADP.

GBP/USD

GBP slightly declines against USD in morning trading today, retreating from local highs since June 26, updated the day before. The reason for the active growth of the instrument on Tuesday was the positive comments of Michel Barnier, EU chief negotiator on Brexit. Barnier emphasized that based on current agreements between the parties the potential conclusion of a trade deal is possible. Meanwhile, the growth of GBP was overshadowed by new alarming information about the increase in the number of patients with coronavirus in the UK. Earlier this week, the government announced the return of quarantine restrictions in Leicester, where a new outbreak was recorded.

AUD/USD

AUD is trading in both directions against USD during today’s Asian session, trying to consolidate below 0.6900. Some pressure on AUD is exerted by macroeconomic statistics from Australia. Building Permits issued in May fell sharply by 16.4% MoM after a decrease of 1.8% MoM in the previous month. Analysts had expected deterioration in the dynamics of the indicator, but expected a decrease of 10% MoM. In annual terms, the number of permits fell by 11.6% YoY after an increase of 5.7% YoY a month earlier. In turn, data from China support the buying activity in the instrument. Caixin Manufacturing PMI in June rose from 50.7 to 51.2 points against the forecast of a decrease to 50.5 points.

USD/JPY

USD is falling against JPY during today’s trading session, testing the level of 107.60 for a breakdown. The instrument managed to update local highs since June 9 at the opening of the session, but the uncertain market situation did not allow the “bulls” to consolidate at new levels. JPY is supported today by good macroeconomic indicators from Japan. Jibun Bank Manufacturing PMI rose from 37.8 to 40.1 points in June, although analysts did not expect changes in the indicator. Consumer Confidence Index for the same period rose from 24 to 28.4 points, which turned out to be better than market expectations for a decrease to 20.9 points.

XAU/USD

Gold prices are trading in both directions near their multi-year highs, which were once again updated the day before. Investors are once again resorting to safe assets amid alarming news of a new outbreak of coronavirus, which may erase previous estimates of the timing of global economic recovery. First of all, the growing incidence in the United States is alarming, as the US economy has just begun to recover from the first wave of quarantine restrictions. Rising geopolitical tensions between the US and China also contribute to lower demand for risk. Earlier, Beijing passed a controversial national security bill, which implies the strengthening of state control in Hong Kong. In response to this decision, the USA withdrew the special status of Hong Kong, which implied certain preferences in the field of trade.

[MikhailLF]

EUR/USD

EUR shows a slight decline against USD during today's Asian session, developing flat trend in the short term. US macroeconomic statistics released yesterday allowed USD to recover in the afternoon and move away from local lows since June 24. Meanwhile, the released data cannot be called unambiguously positive. Nonfarm Payrolls in June grew by 4800K, significantly exceeding market expectations of 3000K. Unemployment Rate fell in June from 13.3% to 11.1%, which also turned out to be better than expectations of 12.3%. At the same time, the Average Hourly Earnings in June slowed down from +6.6% YoY to +5% YoY, while experts were counting on +5.3% YoY. Initial Jobless Claims for the week ending June 26 increased by 1.427M applications, which turned out to be worse than the forecasts of 1.355M.

GBP/USD

GBP is consolidating against USD at the end of the week, trading near 1.2450. The upward potential of the instrument turned out to be almost completely exhausted by the end of the week amid the publication of a large amount of interesting macroeconomic statistics from the USA. In addition, GBP is still under pressure from uncertain prospects regarding trade negotiations between the UK and the EU, despite a series of optimistic statements on both sides of the process. In turn, a more confident growth of USD is restrained against the background of alarming information about the dynamics of the incidence of coronavirus in the United States. The country again shows a record growth rate of new cases, which may lead to returning to strict quarantine restrictions.

AUD/USD

AUD shows flat dynamics against USD during today's Asian session, trading near the previous local highs since June 24, updated the day before. The growth of the instrument slowed down somewhat yesterday against the background of the publication of moderately optimistic macroeconomic statistics from the USA. Today, the instrument is supported by data from Australia and China. Retail Sales in Australia increased by 16.9% MoM in May after growth by 16.3% MoM a month earlier. Analysts had expected it to maintain the same growth rate. The Chinese Caixin Services PMI grew from 55 to 58.4 points in June, while forecasts predicted its decline to 49.9 points.

USD/JPY

USD is trading ambiguously against JPY during today's morning session, consolidating near 107.50. Traders continue to analyze the June statistics on the US labor market, released the day before. The steady increase in Nonfarm Payrolls and lower unemployment at the end of June were overshadowed by a further decrease in the dynamics of earnings growth and a high rate of Initial Jobless Claims. Support for JPY at the end of the week is provided by data on the Japanese Services PMI from Jibun Bank. In June, the index rose from 26.5 to 45 points, which turned out to be better than average market forecasts.

XAU/USD

Gold prices are once again consolidating in the market during today's Asian session. The day before, instrument showed moderate growth, despite the publication of a large number of positive macroeconomic statistics from the United States. In particular, investors were optimistic about the high rate of Nonfarm Payrolls in June. At the same time, the first attempts of the US economy to begin recovering are overshadowed by alarming information about the record increase in new patients with coronavirus in the country. It is quite likely that the US authorities will have to return part of the quarantine restrictions in order to reduce the intensity of the second wave of incidence, which will be extremely painful for the country's weakened economy.

[MikhailLF]

Morning Market Review

EUR/USD

EUR shows strong growth against USD during today's Asian session, approaching the local highs of last Thursday. Moderate support for the instrument is provided by good macroeconomic statistics from Europe, published last Friday. Markit Services PMI in Germany rose in June from 45.8 to 47.3 points with a neutral forecast. Markit PMI Composite for the same period rose from 45.8 to 47 points, which also turned out to be better than the forecasts. Markit Services PMI in the eurozone grew from 47.3 to 48.3 points, while Markit PMI Composite rose from 47.5 to 48.5 points. In turn, pressure on USD is caused by disturbing news regarding the dynamics of the incidence of coronavirus in the United States. Despite the record growth rate of new cases, the authorities are hesitant to return harsh quarantine measures, limiting themselves only to a number of local restrictions. In particular, President Donald Trump has not canceled a trip around the country, dedicated to the celebration of Independence Day.

GBP/USD

GBP is trading with an uptrend against USD this morning, developing a "bullish" signal formed last week. Investors began to buy GBP actively against the background of optimistic comments from officials who positively assessed the prospects of concluding a trade deal between the UK and the EU before the Brexit deadline at the end of the year. However, further growth of the instrument is hindered by the uncertainty that is inherent in many markets today. Today, investors are focused on business activity statistics from ISM in the USA. In the UK, Markit Construction PMI data for June will be published.

NZD/USD

NZD continues moderate growth against USD during today's Asian session. The instrument is testing the level of 0.6550, which is the highest since June 10. Demand for NZD remains quite high, given the overall recovery of the global economy. First of all, investors are optimistic about signals from China, while news from the USA, for example, remains alarming due to a sharp increase in the incidence of coronavirus. Some pressure on NZD at the beginning of the week was exerted by statistics from New Zealand. In June, ANZ Commodity Price Index decreased by 0.7% MoM after rising 1.1% MoM a month earlier. Analysts had expected zero dynamics.

USD/JPY

USD shows moderate growth against JPY during today's Asian session. The instrument adds about 0.20% and is testing the level of 107.70 for a breakout. Moderate support for USD is still provided by data on the US labor market published last Thursday. Despite the fact that not all investors' expectations were met, the US economy is showing a fairly rapid recovery. In turn, traders are concerned about the rapid increase in new cases of coronavirus incidence in the United States. It is possible that in the near future, President Donald Trump will have to return part of the quarantine restrictions, which will negatively affect the pace of recovery in the US economy.

XAU/USD

Gold prices show ambiguous dynamics of trading, located near the level of 1770.00. The instrument is supported by concerns about a new wave of coronavirus incidence in the world. First of all, investors are worried about the record dynamics in the USA. At the same time, a fairly large amount of positive macroeconomic statistics, including from the USA and China, enter the market, which increases the demand for risky assets and leads to a decrease in gold quotes. The instrument receives additional support from escalated geopolitical risks. In particular, the confrontation between the USA and China intensified again after Beijing passed the controversial bill on national security and began its implementation in Hong Kong.

 

[MikhailLF]

WTI Crude Oil: oil prices consolidate

Current trend

Today, during the Asian session, the price of oil shows ambiguous dynamics, trying to consolidate above the level of $40 per barrel. Quotes are supported by optimistic macroeconomic statistics, which indicate a gradual recovery of the global economy. In turn, alarming data on the surge in the incidence of coronavirus in the United States and several other countries are holding back the further growth of the instrument. Investors fear that a new wave of the COVID-19 epidemic may lead to a decrease in demand for oil products, especially if states are forced to return part of the quarantine restrictions.

On Tuesday, the market is focused on the publication of data from the American Petroleum Institute on oil reserves for the week of July 3. The previous report reflected a sharp decrease by 8.156 million barrels, which significantly supported the instrument.

Support and resistance

On the daily chart, Bollinger bands are growing slightly. The price range changes slightly, reflecting the flat nature of trading in the short term. The MACD indicator falls, maintaining a poor sell signal (the histogram is below the signal line). Stochastic has reversed near the level of 80 and is reflecting the development of a correctional decline in the ultra-short term.

To open new trading positions, it is better to wait for the signals from technical indicators to be clarified.

Resistance levels: 40.97, 42.00, 43.00.
Support levels: 40.00, 38.91, 37.36, 35.70.

[MikhailLF]

Morning Market Review

EUR/USD

EUR shows flat dynamics of trading against USD during today's Asian session, consolidating after the decline the day before, which did not allow the instrument to consolidate at local highs since June 23. On Tuesday, EUR almost completely ignored quite uncertain macroeconomic statistics from Germany. Industrial Production in May increased by 7.8% MoM after a decrease of 17.5% MoM a month earlier. Analysts had expected growth by 10% MoM. In annual terms, Industrial Production rate decreased by 19.3% YoY against the forecast of a decrease of 11.1% YoY. Today, European investors are focused on the speech of the ECB Vice President Luis de Guindos, while in general no interesting publications are expected.

GBP/USD

GBP shows a slight increase against USD during today's morning session, trading near the local highs of June 16, which the instrument managed to update the day before. GBP is supported by rumors of notable progress on the Brexit issue, but there is no official information yet. UK macroeconomic statistics published yesterday did not have a significant impact on the dynamics of the instrument. Halifax House Price Index in June showed an increase of 2.5% YoY/3M, slightly slowing down from the previous value of 2.6% YoY/3M. On a monthly basis, the index fell by 0.1% MoM after a decrease of 0.2% MoM in May. The indicator also was much better than its projected decrease of 0.9% MoM.

AUD/USD

AUD shows ambiguous dynamics of trading against USD during today's Asian session. The pair retreated from local highs under the influence of technical factors, as well as after some improvement in the statistics on incidence in the United States, which increased the attractiveness of USD. The minutes of the RBA meeting published yesterday were neutral. The regulator kept the key interest rate at the previous level of 0.25% as expected, while not reporting anything new in the follow-up statement. Macroeconomic statistics also turned out to be neutral. AiG Performance of Services Index went down from 31.6 to 31.5 points in June. No interesting publications are expected in Australia and the USA today.

USD/JPY

USD shows ambiguous dynamics of trading against JPY during today's Asian session, continuing the development of a flat trend in the short term. JPY is moderately supported by Japanese statistics today. Eco Watchers Survey Outlook in June showed an increase from 36.5 to 44 points with a forecast of a decrease to 24.1 points. Eco Watchers Survey Current for the same period strengthened from 15.5 to 38.8 points, which also turned out to be noticeably better than market expectations of 21.1 points. Bank Lending in June grew by 6.2% YoY after an increase of 4.8% YoY in the previous month. Analysts had expected growth by 7.2% YoY.

XAU/USD

Gold prices are consolidating after the next update of multi-year highs at yesterday's trading. The asset has risen in price in response to investor concern over the growing number of new cases of coronavirus incidence. Among other things, India, which is one of the largest consumers of gold, attracted attention. The situation in the United States is also worrying, but recently there has been some stabilization of dynamics, which has provoked corrective growth of USD across almost the entire spectrum of the market.

[MikhailLF]

Morning Market Review

EUR/USD

EUR has shown steady growth against USD during today's Asian session, updating local highs since June 11. The instrument adds about 0.34% and is testing the level of 1.1370 for a breakout. EUR is supported by the positive sentiment of investors, who positively assess the growth rate of the eurozone economy and expect new fiscal measures from the Fed in response to the rapid growth of new cases of coronavirus incidence in the United States. In the medium to long term, traders expect testing of 1.1500 if the situation does not change significantly. Today, European investors are focused on the data from Germany on the dynamics of imports and exports in May, as well as information on the country's trade balance for the same period.

GBP/USD

GBP continues moderate growth against USD this morning, updating local highs since June 16. Despite the increase in demand for USD in response to the worsening situation with the incidence of coronavirus in the world, GBP remains positive, expecting significant progress on the Brexit issue and the conclusion of a trade agreement with the EU by the end of the year. Today, investors are expecting the publication of a block of macroeconomic statistics on the dynamics of the US labor market. It is expected that the number of initial jobless claims for the week ending July 3 will fall below 1.400M, which, however, can hardly be considered a truly optimistic result.

NZD/USD

NZD shows an uptrend against USD during today's Asian session, updating record highs since the end of January and again preparing to test the level of 0.6600 for a breakout. Statistics from New Zealand and China provide moderate support for the instrument today. ANZ Business Confidence in June rose from –34.4 to –29.8 points, which turned out to be quite close to the forecast of most analysts. The Chinese Consumer Price Index showed a decline of 0.1% MoM in June after falling 0.8% MoM in May. Experts expected to see zero dynamics of the indicator. In annual terms, inflation in June accelerated from +2.4% YoY to +2.5% YoY.

USD/JPY

USD shows flat dynamics of trading against JPY during today's Asian session, consolidating after a moderate decline the day before, provoked by the publication of good macroeconomic statistics from Japan. Japanese data released today also provided moderate support for the yen. Machinery Orders in May grew by 1.7% MoM after a decrease of 12% MoM a month earlier. Experts expected the negative dynamics to remain at the level of –5.4% MoM. In annual terms, the dynamics of orders improved from –17.7% YoY to –16.3% YoY with a forecast of –17.1% YoY.

XAU/USD

Gold is trading in the green zone during today's Asian session, remaining in the area of record highs, updated the day before. As before, support for the instrument is provided by fears of a sharp increase in the number of new cases of COVID-19, which may push countries to return to quarantine restrictions. The dynamics in the United States is of particular concern, as the rates there remain the highest in the world, and so far the number of infected people has exceeded 3 million.

[MikhailLF]

Morning Market Review

EUR/USD

EUR shows a downtrend against USD during today's Asian session, continuing the correctional decline which started the day before when the instrument retreated from its local highs since June 11. The appearance of the "bearish" trend was driven by concerns about the rapid increase in the number of new cases of coronavirus in the United States, as well as yesterday's publication of good macroeconomic statistics from the USA. Initial jobless claims for the week ending July 3 decreased from 1.413M to 1.314M, which was better than market expectations. Continuing Jobless Claims for the week ending June 26 decreased from 18.76M to 18.062M, which also turned out to be better than the forecast of 18.95M.

GBP/USD

GBP is lowering against USD during trading at today's Asian session. The instrument retreats from its local highs, updated the day before, being under pressure from technical factors, while the overall picture on the market changes slightly. GBP is still supported by rumors of marked progress on the issue of a trade agreement between the UK and the EU. In addition, investors responded positively to the UK Treasury Secretary's plan for additional support to the British economy, presented on Wednesday. USD, in turn, is strengthening as a safe haven currency, since the latest statistics on the dynamics of the incidence of coronavirus in the US and the world cause more and more anxiety and concern.

NZD/USD

NZD is going down against USD during today's morning session, retreating from local highs, updated on Thursday. The decrease in the instrument is of technical nature, since not much interesting macroeconomic statistics is published. In addition, the demand for safe assets is rising amid a sharp increase in the number of cases of COVID-19 in the United States. Despite record incidence rates, the US authorities are in no hurry to return to quarantine restrictions, so it is not yet clear how soon it will be possible to take control of the new outbreak of the epidemic. New Zealand macroeconomic statistics released on Friday do not have a significant impact on the dynamics of the instrument. Electronic Card Retail Sales in June grew by 8% YoY after a decrease of 6% YoY last month.

USD/JPY

USD shows a steady decline against JPY during today's Asian trading session, updating local lows since June 26. The instrument loses about 0.25%, testing the level of 107.00 for a breakdown. USD is falling against JPY amid a timid correctional growth attempt at the end of the week against many of its other competitors. The disturbing statistics on the dynamics of the incidence rate in the USA are affecting, which threatens the return of new quarantine restrictions and additional measures to support the economy. On Friday, JPY is supported by macroeconomic statistics published in Japan. In June, the Producer Price Index increased by 0.6% MoM after a decline of 0.5% MoM in the previous month. Analysts had expected growth of 0.4% MoM. In annual terms, the index for the same period decreased by 1.6% YoY after rising by 2.8% YoY a month earlier. Analysts had expected decline by 1.9% YoY.

XAU/USD

Gold prices are falling, retreating from their record highs. The instrument is testing an important psychological level of 1800.00 for a breakdown. The appearance of the "bearish" trend is due to the general strengthening of USD in the market, as well as technical factors for correcting long profit. At the same time, the continuing geopolitical risks, as well as the rapid increase in the number of new cases of coronavirus, provide significant support to gold. Against the backdrop of record incidence rates in the United States, analysts believe that the recovery of the US economy may slow down significantly, and authorities will be forced to return some quarantine restrictions and announce additional measures to support the national economy.

[MikhailLF]

EUR/USD

EUR has shown steady growth against USD during today's Asian session, recovering from a decline last Thursday from new local highs since June 11. The recovery of the "bullish" trend of the instrument is due to optimistic investor sentiment regarding the prospects for the European economy. In addition, alarming statistics on the incidence of coronavirus in the United States puts significant pressure on USD. Analysts believe that the growth rate of the US economy will be significantly lower than previously calculated values, which will reduce the economic gap between the US and the eurozone. Today's trading is likely to be fairly calm, given the semi-empty macroeconomic calendar. Attention should be paid only to the speech of the FOMC member John Williams, as well as the publication of the US Federal Budget Balance for June.

GBP/USD

GBP continues moderate growth against USD during today's morning trading, updating local highs since June 16. GBP takes advantage of the weak USD, which is under pressure from alarming statistics on the coronavirus. In addition, British investors are optimistic about the prospects for a trade agreement between the EU and the UK. Friday's US statistic was worse than expected. The Producer Price Index in June showed a decline of 0.8% YoY, while investors predicted a drop of only 0.2% YoY. In monthly terms, the production inflation indicator fell by 0.2% MoM against the forecast for growth of 0.4% MoM. Today, investors expect the speech of the head of the Bank of England, Andrew Bailey, who may present new forecasts for the British economy in the near future.

AUD/USD

AUD is showing insignificant growth against USD during today's Asian session, recovering from a "bearish" end of trading last week. Investors are buying AUD amid taking a short profit on the instrument, while fundamentally the picture is changing little. Moderate support for the pair is provided by the gradual recovery of the global economy; however, alarming data indicating a sharp increase in the incidence of coronavirus, inhibit the growth of "bullish" sentiment. USD, however, also does not receive significant support from the deterioration of the epidemiological situation in the world. Interesting macroeconomic statistics from Australia will appear on Tuesday, when the data from the National Bank of Australia on business sentiment in June will be published.

USD/JPY

USD shows flat dynamics against JPY during today's Asian session. Investors are cautious against the backdrop of growing alarming statistics on the incidence of COVID-19 in the world. The US continue updating record highs of daily infections, but in many other countries, the situation is gradually deteriorating as well. Published macroeconomic statistics from the United States and Japan are often worse than market expectations, but traditionally more attention is drawn to American data. Slight support for JPY on Monday is provided by Tertiary Industry Activity Index. In May, indicator decreased by 2.1% MoM, while in April the index showed a decrease of 6% MoM.

XAU/USD

Gold prices are rising at the beginning of the week, again located above 1800.00. Support for the instrument is still provided by a new surge in the incidence of coronavirus, which has led to an increase in demand for safe assets. The most alarming situation is in the USA, where the number of daily infections exceeded a record high of 60 thousand people. Additional support for gold was provided by a decrease in the yield of ten-year treasury bonds in the USA to the minimum values since April of this year.

[MikhailLF]

Morning Market Review

EUR/USD

EUR shows flat trading dynamics against USD during today's Asian session, consolidating near 1.1340 after active growth the day before. The growth of EUR at the beginning of the week was of a technical nature, while there are still not many fundamental factors for the uptrend in the instrument. European investors today are focused on the statistics on consumer inflation in Germany in June. In annual terms, inflation retained the same rate of growth (0.9% YoY). In addition, ZEW Institute will report on the dynamics of business sentiment in Germany for July. In the eurozone, the data on industrial production for May, as well as a Bank Lending Survey will be released.

GBP/USD

GBP shows ambiguous dynamics of trading during today's morning session. The instrument is consolidating at 1.2550 after an active decline the day before, which interrupted the short-term upward rally for the instrument. GBP retreated from its monthly local highs amid the taking of long profits, while Monday's macroeconomic background remained rather meager. In addition, the negative factors associated with the rapid increase in new cases of COVID-19 infections dominate the market, which reduces investor interest in risk. Today, May statistics on the dynamics of GDP and industrial production in the UK was released. The British economy showed growth of 1.8% MoM in May after a decline of 20.4% MoM in April. Industrial production in May grew by 6.0% MoM. However, these positive statistics cannot provide serious support to GBP just yet.

AUD/USD

AUD is trading ambiguously during today's Asian session, located near 0.6950. AUD is under pressure against the background of the corrective growth of USD, which is strengthening at the beginning of the week due to technical factors. Today's macroeconomic statistics from Australia provide additional support to the instrument. National Australia Bank's Business Confidence in June rose from –20 to 1 point, while analysts expected a sharp decline to –87 points. National Australia Bank's Business Conditions for the same period strengthened from –24 to –7 points, which also turned out to be significantly better than market forecasts of –39 points. Interesting publications in Australia are expected on Thursday when the June labor market report is released.

USD/JPY

USD shows flat dynamics against JPY during today's Asian session. Having shown quite active growth the day before, and having retreated from local lows of last Friday, USD does not get noticeable support in the market, since fundamentally the picture is changing little. Development of the "bullish" trend on the instrument on Tuesday is promoted by poor macroeconomic statistics from Japan. Industrial Production in May decreased from –25.9% YoY to –26.3% YoY, which turned out to be worse than neutral forecasts. In monthly terms, the production rate decreased by 8.9% MoM after a decline of 8.4% MoM in the previous month. At the same time, the percentage of Capacity Utilization decreased by 11.6% after falling by 13.3% in April.

XAU/USD

Gold prices are falling slightly this morning, developing flat trading dynamics in the short term. The instrument is still located near its record highs and is testing the level of 1800.00 for a breakdown. Support for gold is provided by growing market uncertainty associated with a sharp increase in the dynamics of the incidence of coronavirus in the United States, Brazil, India and several other countries. Investors are looking forward to the news regarding a possible vaccine against the virus, which is currently actively being developed by several states and private companies. The difficult geopolitical situation in the world also adds to the negative background. Earlier, Donald Trump said that he is not considering the prospect of resuming trade negotiations with China so far.

[MikhailLF]

Morning Market Review

EUR/USD

Today, during the Asian session, the EUR/USD pair shows ambiguous dynamics. Now, the euro is trying to consolidate above 1.1400, although at the opening of trading, the instrument renewed its local highs of June 10, touching the level of 1.1422. EUR’s technical factors for growth stays relatively strong, while increasing market tension in response to the confrontation between the US and China, as well as the rapid growth of new cases of COVID-19 infection, significantly inhibit investor interest in risk. Tuesday’s macroeconomic statistics from Europe was ambiguous. May industrial production increased by 12.4% MoM after a decrease of 18.2% MoM for the previous month. Analysts had expected an increase of 15% MoM. The index of moods in the business environment of Germany from the ZEW Institute for July fell from 63.4 to 59.3 points, which was worse than forecasts of 60 points.

GBP/USD

Today, during the Asian session, the GBP/USD pair is growing slightly, recovering from the “bearish” start of the week. The reason for the pound's decline on Tuesday was poor data on the dynamics of UK GDP, which was noticeably worse than market expectations. So, according to the results of May, the indicator rose only by 1.8% MoM after a decrease of 20.3% MoM in the previous month. Experts counted on an increase in GDP of 5% MoM. At the same time, industrial production in May increased by 6% MoM after falling by 20.2% MoM in April. Production in the manufacturing industry rose by 8.4% MoM, which was much better than experts' forecasts, who expected a decrease of 20.9% MoM. On Wednesday, investors are focused on a block of British data on the dynamics of consumer and industrial inflation for June.

AUD/USD

Today, during the Asian session, the AUD/USD pair is strengthening, renewing local highs from June 10. The instrument retries to consolidate above the level of 0.7000 with the support of poor positions of the American currency. At the same time, demand for USD remains quite high, given the growing geopolitical risks, as well as the difficult epidemiological situation in the world. In particular, this week, California was forced to once again suspend the work of all enterprises and change the plan to open schools in the new school year. AUD is under the pressure of today’s Westpac consumer confidence index. In July, the indicator decreased by 6.1% MoM after rising by 6.3% MoM a month earlier.

USD/JPY

Today, during the Asian session, the USD/JPY pair shows ambiguous trading dynamics, consolidating near 107.25. Investors are focused on the Bank of Japan interest rate decision. As expected, the regulator did not change the parameters of its monetary policy. The rate remained at -0.1% and the program of annual redemption of securities stayed at 12 trillion yen. In the accompanying statement, the regulator noted the high risks associated with the spread of new coronavirus infection and emphasized the willingness to take additional measures if necessary. With the opening of the American trading session, the focus of investors will shift to data from the United States. In particular, traders will be interested in the June dynamics of industrial production. Closer to the end of the afternoon session, the Fed will publish a monthly economic review, the so-called Beige Book.

XAU/USD

Today, during the Asian session, gold prices show flat dynamics, consolidating near the level of 1800.00, above which the instrument managed to consolidate yesterday. Support for the instrument is still provided by tensions between the USA and China, as well as the extremely alarming situation around the growing number of new cases of COVID-19. Earlier, China said it would impose retaliation against the United States for Washington’s recent Hong Kong bill. After Beijing approved the bill on national security, US President Donald Trump is trying to achieve the abolition of the "special status" of Hong Kong and in every possible way accuses China of discrimination and violation of civil rights. Insignificant support to the dollar, in turn, is provided by yesterday’s macroeconomic statistics. Thus, the consumer price index for June rose by 0.6% MoM after a decrease of 0.1% MoM in the previous month. Analysts had expected an increase of 0.5% MoM. The inflation for June increased by 0.6% YoY, accelerating relative to the previous value of +0.1% YoY.

[MikhailLF]

Morning Market Review

EUR/USD

EUR shows flat dynamics of trading against USD during today's Asian session, consolidating near the level of 1.1400. Yesterday, EUR repeatedly renewed local highs since March 10, rising to the level of 1.1451, which was facilitated by the growth of investor interest in risk. With the opening of the American trading session, USD managed to strengthen slightly, having received support from macroeconomic publications from the United States. Industrial Production in the USA in June grew by 5.4% MoM after an increase of 1.4% MoM in the previous month. Analysts had expected growth of 4.3% MoM. Capacity Utilization for the same period grew from 65.1% to 68.6%, which also turned out to be better than the forecasts of 67.7%. Today, investors are focused on the ECB decision on interest rates, as well as a follow-up press conference, at which updated forecasts on the economy of the eurozone are likely to be presented.

GBP/USD

GBP is slightly decreasing against USD, maintaining the multidirectional dynamics of trading prevailing in the ultra-short term. The macroeconomic statistics from the UK published yesterday provided some support to the instrument; however, with the opening of trading in the US, the sentiment changed again. One way or another, investors were optimistic about the appearance of data on consumer inflation. In June, the Consumer Price Index accelerated from +0.5% YoY to +0.6% YoY, which turned out to be better than the forecast for a slowdown to +0.4% YoY. In monthly terms, the indicator increased by 0.1% MoM after zero dynamics last month.

AUD/USD

AUD is falling against USD during today's Asian session, retreating from strong resistance at 0.7000. On Thursday, Australian investors are focused on the publication of the report on the Australian labor market in June. Part-Time Employment in June grew by 249K jobs after a decrease of 162.3K in the previous month. At the same time, Full-Time Employment reduced by 38.1K after a decrease of 101.9K a month earlier. Employment Change in June increased by 210.8K, which turned out to be almost twice as good as market expectations. Unemployment Rate increased from 7.1% to 7.4%, which coincided with the expectations of investors. Participation Rate has grown from 62.7% to 64%, exceeding forecasts of 63.6%.

USD/JPY

USD again demonstrates flat trading dynamics against JPY during the morning session, consolidating near 107.00. Support for JPY is provided by continued demand for safe assets, while USD remains in the spotlight due to the raging coronavirus epidemic in the United States. Today, the data on the Retail Sales in the US for June is expected to be published. In addition, updated information on Initial Jobless Claims is expected (for the week ending July 10).

XAU/USD

Gold prices show flat dynamics, however, they continue to stay near their record highs, receiving support against the backdrop of prevailing market uncertainty. The growth of geopolitical tensions between the US and China, as well as the difficult epidemiological situation in the world contributes to an increase in demand for safe assets. In addition, investors expect that amid worsening incidence dynamics, many financial regulators will again have to resort to additional stimulation of their economies, which will further increase the attractiveness of gold. Additional pressure on USD is exerted by a corporate reporting season which started recently.
 

[MikhailLF]

Morning Market Review

EUR/USD

EUR shows ambiguous dynamics against USD during today's Asian session, having retreated from local highs the day before. The "bearish" dynamics on Thursday was facilitated by correctional sentiment, as well as by quite positive macroeconomic statistics from the United States. US Retail Sales in June grew by 7.5% MoM after an increase of 18.2% MoM in the previous month. Analysts had expected increase by 5% MoM. Philadelphia Fed Manufacturing Survey in July fell from 27.5 to 24.1 points, which also turned out to be better than market forecasts of 20 points. On Thursday, EUR was under some pressure from the results of the ECB meeting. As expected, the European regulator kept all the key parameters of its monetary policy unchanged. At the same time, ECB President Christine Lagarde again called on European governments to make every effort to develop new measures of economic support.

GBP/USD

Today, GBP demonstrates flat dynamics of trading against USD, continuing the development of the lateral trend in the short term. The day before, GBP showed a moderate decline, which was a reaction to the technical growth of USD, while the macroeconomic background remained almost unchanged. On Thursday, British investors were focused on the report on the UK labor market. Claimant Count Rate in June fell from 7.4% to 7.3%. Claimant Count Change for the same period unexpectedly decreased by 28.1K after an increase of 566.4K in the previous month. Analysts had expected an increase of 250K. ILO Unemployment Rate in May remained at the previous level of 3.9% 3MoY, which did not justify the negative forecasts of analysts about the growth of the indicator to 4.2% 3MoY.

AUD/USD

AUD is strengthening against USD during today's morning trading, testing the level of 0.7000 for a breakout again. Having demonstrated a moderate decline the day before, the instrument is trying to return to previous levels, receiving support from the weakness of USD and good macroeconomic publications from China and Australia. China reported GDP growth in Q2 2020 by 3.2% YoY and 11.5% QoQ, which was better than market expectations of +2.1% YoY and +9.6% QoQ. Australian data showed steady increase in Employment Change in June by 210.8K, but the Unemployment Rate still rose significantly from 7.1% to 7.4%, which met expectations.

USD/JPY

USD shows flat dynamics against JPY during today's Asian session, trying to consolidate above 107.00. The instrument showed moderate growth the day before, having received support from fairly positive macroeconomic statistics from the United States on the dynamics of retail sales, but the general sentiment of investors remains ambiguous. Uncertain prospects for the recovery of the American economy against the backdrop of the ongoing deterioration of the epidemiological situation in the world put significant pressure on USD. Only some progress in the development of a vaccine against coronavirus can be called a positive point, but it is obvious that in such a short period of time it is not possible to develop a full-fledged vaccine.

XAU/USD

Gold prices show ambiguous trading during today's morning session, having shown a moderate decline in trading yesterday. The instrument is trying to consolidate below the key level of 1800.00 again; however, the demand for gold remains quite high. The instrument is supported by an uncertain market situation related to the aggravation of geopolitical risks and the further worsening of the epidemiological situation in the world. The United States and China again exchange mutual sanctions, and this threatens with crossing out all the progress made earlier in the framework of the trade agreement. While global regulators are taking a wait and see attitude, new measures to support the economy today seem quite reasonable, which also increases the attractiveness of gold among investors.

[MikhailLF]

Morning Market Review

EUR/USD

EUR has shown moderate growth against USD during today's Asian session, again approaching its highs since early March, updated on July 15. EUR ended last week's trading with moderate growth, receiving support from weak USD. At the end of the week, USD was under pressure from disappointing consumer confidence data. Michigan Consumer Sentiment Index in July fell from 78.1 to 73.2 points, while analysts had expected growth to 79 points. Today, European investors are focused on the publication of data on Producer Price Index from Germany for June. Also, German Bundesbank Monthly Report is expected during the day.

GBP/USD

GBP declines against USD during today's morning trading, preparing to test 1.2500 for a breakdown again. Investors are selling GBP amid the publication of mixed macroeconomic statistics from the UK and uncertain prospects. Last week, the UK reported on the growth rate of GDP, which in May was significantly worse than market expectations. In this regard, analysts believe that the previously adopted measures to support the country's economy may not be enough and soon the Bank of England will be forced to return to the issue of new incentives. Investors are also concerned about the prospect of a trade agreement between the UK and the EU, which should be signed before the end of the year. Due to the pandemic, no notable progress on the issue was achieved, despite a series of very optimistic statements by officials.

NZD/USD

NZD shows ambiguous dynamics of trading against USD during today's Asian session, located near the opening level of 0.6550. Investors expect new drivers to appear on the market to form trends for the instrument, but so far NZD has not been able to demonstrate growth even against the backdrop of strong macroeconomic signals. Last Friday, Business NZ PMI in June rose sharply from 39.7 to 56.3 points against the forecast of a decrease to 35.6 points. Today, attention is drawn to Business NZ Performance of Services Index. In June, the indicator increased from 37.2 to 54.1 points, which also turned out to be better than the market's average expectations. In turn, USD remains under pressure from alarming statistics on the incidence of coronavirus and uncertain prospects around the upcoming US presidential elections scheduled for autumn.

USD/JPY

USD shows moderate growth against JPY during today's Asian trading. The instrument adds more than 0.20% and is testing the level of 107.30 for a breakout. Pressure on JPY on Monday is exerted by weak statistics on exports. In June, exports from Japan decreased by 26.2% YoY after a decrease of 28.3% YoY in the previous month. Analysts had expected decline by 24.9% YoY. Imports for the same period fell by 14.4% YoY, which turned out to be better than forecasts of –16.8% YoY and previous dynamics at the level of –26.2% YoY. The trade balance in June showed a deficit of 268.8B yen, which turned out to be significantly worse than market expectations of –35.8B yen. In May, the balance showed a deficit of –833.5B yen.

XAU/USD

Gold prices are stable at the beginning of the new week and are trying to consolidate above 1800.00. The instrument recovered noticeably in trading last Friday, receiving support from the continuing risk aversion of investors. The United States again reported a record increase in new cases of coronavirus infection, which raises doubts about the previously announced pace of the American economic recovery. The country has not announced the return of large-scale quarantine measures, but some states are forced to lock down, which could lead to a sharp deterioration in the labor market. An additional source of market uncertainty is the relationship between the United States and China. The parties continue to exchange mutual sanctions, and at the end of last week it became known that Donald Trump's administration is considering the possibility of banning persons associated with the activities of the Chinese Communist Party from entering the United States.
 

[MikhailLF]

Morning Market Review

EUR/USD

EUR is falling against USD during today's Asian session, retreating from local highs of March 10, updated at the beginning of this trading week. Uncertain macroeconomic statistics from Germany put some pressure on EUR yesterday. Producer Price Index in Germany in June showed zero dynamics on a monthly basis, while analysts had expected growth in manufacturing inflation by 0.2% MoM. On an annualized basis, the indicator decreased by 1.8% YoY after falling by 2.2% YoY, which also turned out to be worse than market expectations of –1.5% YoY. In turn, USD remains under pressure amid decisions on new measures to support the US economy, which are due later this week.

GBP/USD

GBP is trading with multidirectional dynamics during today's Asian session, consolidating near new local highs and the level of 1.2650, which were renewed thanks to the activity of the "bulls" the day before. A confident uptrend on the instrument was facilitated by technical factors, as well as by the weakness of USD. GBP, in turn, looks good enough against the background of the latest macroeconomic statistics, as well as moderate optimism about Brexit and the accompanying trade agreement between the UK and the EU. Today British investors are awaiting the publication of information on the placement of 30-year government bonds.

AUD/USD

AUD is showing moderate growth during today's morning trading session, trying to consolidate above the important resistance at 0.7000. On Tuesday, investors are focused on the minutes of the RBA meeting, as well as the speech of the Governor of the regulator Philip Lowe. The bank Governor began his speech with a description of a rather difficult situation in the labor market, which was sharply aggravated against the backdrop of the outbreak of the COVID-19 epidemic. Toward the end of his speech, Lowe tried to cheer up investors and noted that Australia coped with the challenges of the new time much better than many countries and remained open to investment and innovation.

USD/JPY

USD has shown moderate gains against JPY during today's Asian session, aiming to consolidate above 107.30. A number of technical factors contribute to the growth of the instrument, as well as restrained optimism about the coronavirus vaccine under development. Meanwhile, JPY gets moderate support from macroeconomic publications from Japan on Tuesday. The National Consumer Price Index in June showed an increase of 0.1% YoY, maintaining the dynamics of the previous month. Analysts had expected the indicator to slow down to zero. National CPI excluding Food and Energy increased by 0.4% YoY over the same period, which also turned out to be slightly better than analysts' expectations of +0.3% YoY.

XAU/USD

Gold prices are trading flat during today's Asian session, close to multi-year highs, which are constantly updated amid uncertain market conditions. Traders are seriously concerned about the continuing rise in the global incidence of coronavirus. In addition, investors expect the adoption of new measures stimulating economy by the world's leading regulators. In particular, the US government is expected to agree on a new package of assistance to the American economy this week, and the EU, meanwhile, managed to agree on the creation of a recovery fund in the amount of EUR 750B.

[MikhailLF]

Morning Market Review

EUR/USD

EUR is trading with an uptrend against USD during today's Asian session, hitting record highs since January 2019. Until now, EUR has shown three "bullish" trading sessions, which have led the instrument to new record highs. The growth of optimism was triggered by the expectations of investors regarding the creation of a fund to help the European economy in the amount of EUR 750 billion. After lengthy discussions, the long-awaited plan was approved by the European leaders, and the market was even more inspired, especially given the high risks of a further increase in the incidence of COVID-19. Today, investors are focused on the statistics on the dynamics of Existing Home Sales in the United States. Interesting data from Europe will appear only towards the end of the week. On Friday, consolidated statistics on business activity in the eurozone from Markit for July is expected to be released.

GBP/USD

GBP shows the flat dynamics of trading against USD during today's morning session. The instrument is retreating from its monthly highs, updated the day before, without the support of the previous drivers. Approval of the European economic support program in the amount of EUR 750 billion does not provide almost any support to GBP. In turn, the "bullish" activity on the instrument has noticeably decreased after the information that the UK and the EU are unlikely to have time to agree on a trade agreement before the end of the summer appeared at the market. Analysts believe that the process could drag on until the end of the year, when the Brexit transition deadline expires. Today investors do not expect interesting drivers from the UK to appear, and therefore flat dynamics may continue. On Thursday, investors await the publication of a report from the Confederation of British Industrialists on the dynamics of industrial orders for July. In addition, on this day, the representative of the Bank of England Jonathan Haskel will speak.

NZD/USD

NZD remains upward versus USD during today's Asian session. The instrument adds about 0.13% and is about to test the level of 0.6650 for a breakout. Some support for NZD is coming from the excitement in the market following the long-awaited approval of EUR 750 billion European economic recovery fund. In addition, the previous drivers remain in effect. USD is under noticeable pressure amid the deteriorating situation with the dynamics of the incidence of coronavirus in the United States. Also, the US authorities intend to obtain approval of a new package of economic stimuli; however, given the disagreements prevailing between the chambers of Congress, one cannot expect a quick solution. The macroeconomic statistics from New Zealand published yesterday exerted moderate pressure on NZD. New Zealand's Global Dairy Trade Price Index declined by 0.7% MoM after rising by 8.3% MoM last month. Analysts had expected growth of 3.9% MoM.

USD/JPY

USD is strengthening against JPY during today's Asian trading, correcting after a strong decline the day before. The "bearish" dynamics on Tuesday was facilitated by good statistics on consumer inflation in Japan, as well as the active growth of EUR on the market in response to the approval of the creation of the European economic recovery fund in the amount of EUR 750 billion. Today, American investors expect the publication of data on the dynamics of Existing Home Sales. After extremely disappointing May data, analysts expect strong sales growth (more than 20%) in June, which may provide significant support to USD. Markets in Japan are closed today due to a national holiday.

XAU/USD

Gold prices are showing strong growth during today's Asian session, once again updating multi-year highs. This time, the instrument managed to rise above the level of 1865.00; however, gold has not yet been able to consolidate at new highs. A weak USD supports the instrument. Investors expect new stimulus measures from the US government, and are also worried when analyzing the statistics on the incidence of coronavirus in the world. Some pressure on the instrument at the beginning of the week is exerted by the growth on stock exchanges, provoked by the approval of the idea of creating a fund for the recovery of the European economy in the amount of EUR 750 billion.
 

[MikhailLF]

EUR/USD: EUR maintains strong growth

Current trend

EUR is trading flat against USD today, consolidating after another “bullish” surge the day before, which led to the renewal of record highs since October 2018. EUR is supported by the fact that a European economic recovery fund worth EUR 750 billion has been approved. A breakthrough on this issue looks especially attractive against the backdrop of difficult negotiations on the introduction of new economic incentives in the USA. No one expected that Democrats and Republicans would be able to agree quickly, but the problem is that only a little more than a week remains until the end of the current plan to support the American economy.

Today European investors are focused on the speech of the Vice President of the ECB, Luis de Guindos, as well as the publication of the July data on the dynamics of the level of consumer confidence in the eurozone.

Support and resistance

Bollinger Bands in D1 chart show stable growth. The price range is expanding, but it fails to catch the development of “bullish” trend at the moment. MACD indicator is growing preserving a stable buy signal (located above the signal line). Stochastic, having approached its highs, reversed into the horizontal plane indicating overbought EUR in the ultra-short term.

Existing long positions should be kept in the short and/or ultra-short term until the signals from technical indicators clear up.

Resistance levels: 1.1600, 1.1657, 1.1700.

Support levels: 1.1546, 1.1500, 1.1460, 1.1422.

[MikhailLF]

 Morning Market Review

EUR/USD

EUR is showing moderate growth against USD during today's Asian session, trading near record highs updated the day before. EUR ends the week with strong gains, boosted by the decision of European leaders to create a EUR 750 billion economic recovery fund. Meanwhile, USD remains under pressure amid growing statistics on the incidence of coronavirus, and also reacts negatively to difficulties in discussing a new aid package for the US economy in the Senate. Today, European investors are focused on business activity statistics from Markit in the euro area. It is expected that the main indicators will be able to consolidate above the psychological level of 50 points, which will additionally support EUR.

GBP/USD

GBP is trading against USD in both directions during today's Asian session, updating local highs since June 10. Further growth of the instrument is limited by uncertain macroeconomic statistics from the UK. In addition, GBP is under pressure from uncertain prospects regarding the conclusion of a trade agreement between the UK and the EU. At the same time, the weakness of USD allows the "bulls" to feel relatively free. The report on jobless claims released in the US yesterday again disappointed investors, strengthening the idea of the urgent need for a new stage of stimulating the American economy. Today, investors are focused on the statistics on Retail Sales in the UK for June. Also during the day, the data on the level of business activity in the manufacturing sector and the service sector from Markit for July will be released.

AUD/USD

AUD has shown slight growth against USD during this morning session, once again trying to consolidate above 0.7100. The instrument is supported moderately by the Australian business activity statistics from Commonwealth Bank. Services PMI rose sharply from 53 to 58.5 points in July, which was significantly better than market expectations of 53.2 points. Manufacturing PMI for the same period increased from 51.2 to 53.4 points, but did not reach the expected value of 53.6 points. Composite PMI in July rose from 52.7 to 57.9 points. After the American trading session opens, the attention of investors will shift to the data on business activity from the US, where analysts also expect optimistic results.

USD/JPY

USD is actively falling against JPY during today's Asian session. The instrument lost about 0.40%, testing the level of 106.40 for a breakdown. Investors are actively selling USD again after the publication of disappointing labor market statistics on Thursday. Initial Jobless Claims for the week ending July 17 increased from +1.307M to +1.416M, which was worse than market expectations of 1.300M. Meanwhile, Continuing Jobless Claims for the week ending July 10 slowed from +17.304M to +16.197M, while the forecast did not imply a decrease in the indicator below 17M.

XAU/USD

Gold prices are consolidating during today's trading, slightly retreating from record highs, once again updated the day before. The instrument is supported by a further increase in tensions between the United States and China, which threatens to cancel out all the success achieved by the countries earlier. In addition, the demand for gold remains high amid active discussions on new stimulus measures in the US economy. Yesterday's report on jobless claims dynamics in the US only strengthened the belief in the need for such measures, but investors fear that the political forces in the Senate will not be able to agree quickly.