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Date : 23rd June 2020.

European Market : EURUSD at 1.1300 again.

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The news flow today caused a brief risk-off burst in Asia-Pacific markets followed by a sharp recovery. In currencies, this transpired as a bout of dollar and yen outperformance alongside a sharp drop in risk-sensitive currencies such as the Australian dollar, followed by a quick reversal. The cause was miscommunication from the White House. Trade adviser to President Trump, Pete Navarro, said during an interview with Fox that the trade deal with China was “over.”

This saw risk assets and currencies tumbling, before Navarro quickly walked-back his remarks with the help of White House Economic adviser Kudlow, who affirmed that the trade deal was very much in place. Trump himself then tweeted: “China Trade Deal is fully intact.

The narrow trade-weighted USDIndex (DXY) dropped to a 96.65 low on the initial remarks by Navarro, which is the lowest level seen since June 17th, before sprinting to a 97.24 high and subsequently settling near 97.00. EURUSD concurrently dropped by over 30 pips in making a low at 1.1244 before rebounding to levels around 1.1305. The pair earlier printed a six-day high at 1.1305.

Followed by overnight news, European stock markets and Euro remain broadly higher, after the stronger than expected Eurozone and UK PMI readings that help to underpin sentiment further.

Eurozone PMIs stronger than expected in preliminary readings for June. The manufacturing PMI lifted to a four months high of 46.9 from 39.4 in May and the services number jumped to 47.3 from 30.5 in May. That left the composite at a 4-month high of 47.5, up from 31.9 in the previous month. Data still points to overall contraction in the Eurozone economy, but the French readings were already above the 50-point no change mark and the pace of the downturn eased markedly as economies further relaxed restrictions. Markit also reported continued strong improvement in business expectations for the year ahead. Hotels, restaurants, travel and tourism remain impacted but with borders gradually opening there seems at least light at the end of the tunnel, which is helping to boost sentiment even if current conditions remain subdued. Nevertheless, we agree with Markit’s comment that the outlook remains uncertain as the “new normal” will likely continue to impact the services sector in particular and it remains to be seen how many companies can survive the downturn, especially if and when government wage support is scaled back

In other news, SNB’s Zurbruegg stated that FX intervention potentially “unlimited”. Zurbruegg said there are no limits to how far the SNB’s balance sheet could expand. He also suggested that the bank is not concerned about the possibility of being named a currency manipulator by the U.S. saying the central bank is in close contact with the United States to explain Switzerland’s special situation and its highly valued currency. At the same time, Zurbruegg said monetary policy can not cushion the blow of Covid-19 – stressing that “this is where fiscal policy comes in. If fiscal policy no longer able to use its instruments, this will lead to a worse overall economic result”.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 24th June 2020.

European stock markets are selling off.

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European stock markets are selling off. The better than expected German Ifo reading failed to lift sentiment and after a mixed close in Asia stock markets are now selling off across Europe, with GER30 and UK100 down -1.8% on the day.

Meanwhile US futures have lost their modest overnight gains and are down -0.4 to -0.7% now with fears of a second wave of virus infections and warnings that the lockdowns will have a longer term impact on activity adding to caution.Markets already struggled during the Asian part of the session and Topix and Nikkei closed with losses of -0.4% and -0.07% respectively. The Hang Seng was -0.50% lower at the close, while CSI 300 and ASX managed gained of 0.4% and 0.2%.

Lets get back to GER30 and UK100 though. The interesting part is that both assets reversed away from the 61.8%-76.4% Fibonacci level set on the June’s downleg. Theoretically, 61.8% is the strongest retracement level, hence that confirms that from the technical side, the asset confirmed that retracement and further decline could find support on lower Fib. levels. However other that the slip away from 61.8% Fib. level, both assets breakout their 20-day SMA, suggesting that if the price action is been sustained by the end of the day below it, then the asset could be seen retesting June 11-15 low territory.

In regards to the EU data now……

German Ifo business confidence jumped to 86.2 in June, from 79.7 in the previous month. The current conditions index nudged higher, but less than hoped and the overall improvement was mainly due to a jump in the future expectations reading, which lifted to 91.4 from 80.4 in may. This is the highest reading since February, although the overall reading still fell back to an average of 80.1 in the second quarter of the year, from 92.6 in the first quarter. The numbers highlight the sharp correction in overall activity that was the result of lockdowns and the diffusion index, which gives the balance of positive and negative answers, still remained firmly in negative territory in June, with pessimists outnumbering optimists across all key sectors. A further indication then that things are improving, but that it will take a long time to overcome the slump. Against that background it remains to be see how many companies will survive and how the labour market will far once official wage support schemes are scaled back.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 26th June 2020.

Another mixed US data set.

 
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USDJPY, H1
Another mixed set of US data today, with the Weekly Claims once again falling but just as importantly missing expectations. Durable Goods were a positive beat but the advance goods trade deficit widened and the final reading of Q1 GDP remained unmoved at -5.0%.

US initial jobless claims fell -60,000 to 1,480,000 in the week ended June 20 following the disappointing small -26,000 drop to 1,540,000 (was 1,508,000) in the June 13 week which also coincided with the BLS survey period. This is a 12th straight decline in claims after the record surge to the all-time high of 6,867,000 in the March 27 week. The 4-week moving average continued to slip and was at 1,620,750 versus 1,781,500 (was 1,773,000). Continuing claims dropped -767,000 to 19,522,000 in the week of June 13 after falling -317,000 to 20,289,000 (was 20,544,000).

US durable goods orders bounced 15.8% in May, a little firmer than expected and the biggest leap since July 2014, following the -18.1% (was -17.7%) plunge in April (the second worst on record) and the -16.7% drop in March. Transportation orders climbed 80.7% after April’s -48.6% (was -47.3%) plunge. Excluding transportation, orders rebounded 4.0% from -8.2% (was -7.7%) previously. Nondefense capital goods orders excluding aircraft climbed 2.3% from -6.5% (was -6.1%). Shipments were up 4.4% in May from -18.6% (was -18.2%). Nondefense capital goods shipments excluding aircraft rose 1.8% from -6.2% (was -5.7%). Inventories edged up 0.1% versus the prior unchanged reading (was 0.2%).

US Q1 GDP was unrevised at -5.0% in the third look at the data, and compares to -4.8% in the Advance number, and 2.1% in Q4 2019. Personal consumption was down -6.8%, as it was in the second report, and was -7.6% in the Advance, and 1.8% in Q4. Fixed investment was revised up to a -1.3% pace from -2.4% in the second look, and was -0.6% in Q4. Government consumption was bumped up to 1.1% from 0.8% previously and 2.5% in Q4. Inventories subtracted -1.56%, revised down from -0.98%, while net exports added 1.3%, also lowered from 1.5% previously. The GDP chain price index posted a 1.4% rate, as it did in the second look, and was 1.3% in Q4. The core rate rose to 1.7% from 1.6% previously and 1.3% in Q4.

Finally, the US advance goods trade deficit widened to -$74.3 bln in May from -$70.7 bln (was -$69.7 bln). Exports fell -5.8% to $90.1 bln after plunging -25.1% to $95.6 bln in April. Imports dropped -1.2% to $164.4 bln following the -13.6% decline to $166.3 bln previously. Wholesale inventories declined -1.2% to $642.2 from $649.9 bln (was $651.5 bln), with retail inventories dropping -6.1% to $604.5 bln from $643.8 bln (was $644.9 bln).
 
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All of this has taken the shine off the USD recovery today – USDJPY slipped from 107.45 back under R1 at 107.20 and EURUSD moved up from S2 sub-1.1200, to 1.1225. However, both remain on trend from key moves which were initiated yesterday.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer:
This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
 

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AUDJPY today as we see here, the price is still in sideways trend, so if the price breaks support area at 73.377, you can start sell it with potential target up to 50 pips below

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Date : 29th June 2020.

Events to Look Out for This Week.


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An important week is coming up as Brexit trade talks resume next week, with Boris Johnson holding a video link summit with the EU Commission President on Monday. In addition, NFPs will be out on Thursday and a broad range of PMIs and other early indicators are expected during the week.

Monday – 29 June 2020
 

  • Harmonized Index of Consumer Prices (EUR, GMT 12:00) – The German HICP inflation is expected to hold at 0.5% y/y for June.

Tuesday – 30 June 2020
 

  • Gross Domestic Product (GBP, GMT 06:00) – The GDP is the economy’s most important figure. Q1’s GDP is expected to remain unchanged at -1.6% y/y and -2% q/q. As for the Q2 GDP, a severe contraction is expected after the 20.4% m/m contraction seen in April.
  • Consumer Price Index and Core (EUR, GMT 09:00) – The Euro Area flash CPI for June is forecasted to remain steady, at 0.1% y/y.
  • Gross Domestic Product (CAD, GMT 12:30) – The April GDP is expected to contract at -18.2%. The Q1 GDP revealed a -8.2% pandemic driven drop, marking a hefty pull-back in activity as lockdown measures shuttered much of the economy in the second half of March.
  • Consumer Confidence (USD, GMT 14:00) – Consumer confidence is expected to rise to 89.0 from 86.6 in May and a 6-year low of 86.9 in April. This compares to an 18-year high of 137.9 in October of 2018 and a recession-low of 25.3 in February of 2009. The present situation index is expected to improve to 78.5 from a seven-year low of 71.1 in May. All of the available confidence measures were oscillating near historic highs before being crushed by COVID-19, and even with big drop-backs, it’s remarkable how firm the consumer measures have stayed relative to prior recessions.
  • Treasury Secretary Mnuchin speech
  • Feds Chair Powell testimony

Wednesday – 01 July 2020
 

  • Canada and Hong-Kong – Holiday Day
  • Caixin Manufacturing PMI (CNY, GMT 01:45) – The Caixin manufacturing PMI is expected to hold into the neutral zone in June.
  • Markit Manufacturing PMI and Unemployment data (EUR, GMT 07:55) – In June, the German PMI is expected to once again show weakness in German manufacturing and a lift in the jobless rate at 6.6%, despite the wage subsidies and announced stimulus from the government. These are unlikely to prevent a further rise in official jobless numbers to around the 3 million mark by the end of the year, highlighting the impact of the pandemic on the economy.
  • ADP Employment Change (USD, GMT 12:15) – Employment change is seen spiking to 3.5 mln in the number of employed people in June, compared to the -2,760k May ADP drop.
  • ISM Manufacturing PMI (USD, GMT 14:00) – The ISM index is expected to rise to 49.0 in June from 43.1 in May.

Thursday – 02 July 2020
 

  • NFP and Labour Market Data (USD, GMT 12:30) – A 3,000k June nonfarm payroll increase is projected, after a 2,509k rebound in May and a -20,527 April collapse.An assumption has been made for a 600k factory jobs increase in June, after a 225k May rise, with a big lift from a re-opening vehicle sector. The jobless rate should fall to 12.0% from 13.3% in May and a 14.7% peak in April. The continuing claims data have been slow to moderate, but nearly all other measures of activity have risen into June from a trough just after the April BLS survey week. Average hourly earnings are assumed to fall another -1.0% in June with a continued unwind of the April distortion from the concentration of layoffs in low-wage categories. This would translate to a drop in the y/y gain to 5.3% from 6.7%.

Friday – 03 July 2020
 

  • United States – Independence Day
  • Retail Sales (AUD, GMT 00:30) – Retail Sales are expected to flatten at 16.3% for May.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 30th June 2020.

USDIndex – Is the trend still down?

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USDIndex – The Dollar has strengthened after home sales came out better than expected, at 44.3% from the 19.7% predicted and higher than -21.8% seen last month, boosting also stock markets. The US returned to the positive with S&P +1.47%, NASDAQ +1.2% and Dow Jones +2.32%.

It looks like the USDIndex’s resumption attempt in the second half of June was not as effective as expected, with safe haven demand falling after the May lockdown. As a result of the latter, the US Dollar seems to be based on more internal economic factors. Therefore, this week we must pay special attention to US economic data. Today, the Chicago PMI index numbers are due alongside consumer confidence and Fed President Powell’s testimony, and tomorrow the ADP employment numbers and the PMI-ISM index will highlight US economic calendar this week , Tthe non-farm payrolls – which have moved to Thursday because Friday is the National Day and the market is closed.

However, the USDIndex trend still has significant obstacles in the uptrend. A potential bearish flag trend could be spotted which could be the continuation of the downtrend if it is confirmed with a strong pullback. That is still below the 200-EMA and followed by Golden cross (50-EMA and 200-EMA), all of which are in line with momentum indicators such as MACD that are still in the negative.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand
HotForex

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 1st July 2020.

 

US Data – ADP, PMIs & Vaccine News.

 

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EURUSD, H1

 

US ADP reported private payrolls rose 2.369 million in June. Also, May was revised sharply higher, by 5.825 million to a 3.065 million increase (was -2.760 million). April’s -19.409 million was a record plunge. Jobs in the goods production sector increased 457,000, with construction jobs up 394,000. Service sector employment increased 1.912 million, with gains of 961,000 in leisure/hospitality, 283,000 in education/health, and 151,000 in professional/business services. A robust private payrolls. The ADP climb beats the modest improvement in the continuing and initial claims data for the period, but undershoots the bigger sales, sentiment, and output gains in other measures, and is in line with the payroll gain expected for tomorrow’s jobs report. ADP gains were fairly evenly dispersed across increases of 873,000 for large companies, 559,000 for medium companies, and 937,000 for small companies.

 

US final June Markit manufacturing rose to 49.8 (was 49.6 in the preliminary) from May’s 39.8. It is a fourth month of contraction and was at 50.6 a year ago. But the weakness is abating from the 36.1 record low from April amid re-openings of the economy. The 10-point surge in the index was a record jump, and it is now the highest reading since February. Output climbed to 47.5 from May’s 34.4, with new orders also moving higher.

 

US equity markets have opened in positive territory, rebounding from early losses on the futures market following reports of positive results on a vaccine from Pfizer and BioNTech.

 

EURUSD pushes towards 1.1250 following a dip to 1.1184 earlier, USDJPY pivots around 107.50, down from Asian session highs at 108.06 and the USA500 trades at 3115 and highs of the day. FOMC Minutes due at 18:00 GMT.

 

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

 

Please note that times displayed based on local time zone and are from time of writing this report.

 

Click HERE to access the full HotForex Economic calendar.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

 

Click HERE to READ more Market news.


Stuart Cowell
Head Market Analyst
HotForex

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission. 

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