JUL 29,2020

July 29, 2020

Daily Market Analysis

Market Focus

The Fed extended most of its emergency lending programs by three months, to help revive the desperate economy. Since mid-March, the Federal Reserve has opened nine emergency programs aimed at injecting liquidity into short-term credit markets and extending credit to businesses and local governments. The facilities have the potential to deploy trillions of dollars, but so far have only about $100 billion in loans outstanding.

Swiss Franc reached its strongest since June 2015 as investor sought havens ahead of Wednesday’s Fed interest rate decision, the rate is widely expected to remain unchanged, thus the focus shifts to Fed’s stance on current monetary policy and how much more liquidity they are willing to give out.

The European Union decided to keep its external borders closed to travelers from most countries including U.S. for at least two more weeks amid surging number in coronavirus cases. The resurgence in COVID-19 cases worldwide is hampering European efforts to pull its economy out of sliding recession.

Market Wrap

Main Pairs Movement

        Dollar index was taking a breath from heavy selling pressure, it recovered 0.12% on Tuesday. However, the pound is still charging into the greenback, recorded a eighth straight win, closed the day up 0.53%. The risky currency is lifted to four months high by the current risk-on mood in the financial market and dollar weakness. Gold surged nearly $40 in early Asian session and briefly touched $1982, but the precious metal quickly plunged back to $1907 probably due to enormous profit-taking orders. Nonetheless, it still closed the day up $16, settled around $1958.

The Kiwi was left behind by its peer Aussie, dropped 0.26% and up 0.16% respectively. The fact that New Zealand suspended its extradition agreement with Hong Kong could damage ties between the two countries, which could draw potentially retaliation from China. NZDUSD is drove down as speculators generally want to pull their money out before things turn ugly.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (Monthy)

EURUSD slipped 0.29% on Tuesday, but is still on its way towards 1.1815, where the 12-year descending trendline intersects with horizontal resistance line on the monthly chart.
If price could penetrate this pivotal resistance, then bulls have chance to take back the driver seat after a long wait.

Resistance: 1.1818, 1.2238, 1.2803

Support: 1.145, 1.0517

USDCHF (Weekly)

USDCHF dropped 0.22%, and is currently hovering above its five-year low, settled around 0.9179. The Swiss Franc is underpinned by USD sell-off and safe-haven seeking. RSI is one step from entering the oversold region, printed 30.8 as of writing, and MACD is keeping its downside bias on the weekly chart. Bears look to test 0.9084 support in the near term, which we might see some rebound from there.

Resistance: 0.9275, 0.9537, 0.9737

Support: 0.9084, 0.8909, 0.8699

GBPUSD (Daily)

Cable’s bullish momentum has managed to conquer 76.4% Fibonacci, and is heading toward the intermediate resistance at 1.3 handle. If the pound takes out this important resistance, price could accelerate toward yearly high of 1.32, which will be tough to crack. To the downside, horizontal support lies around 1.2778, followed by 1.2623-1.2526 region, then to 1.2306.

Resistance: 1.2984, 1.3201

Support: 1.2778, 1.2623-1.2526, 1.2306

Economic Data