JUL 30,2020

July 30, 2020

Daily Market Analysis

Market Focus

Fed Chairman Jerome Powell signifies that the Federal Reserve will do whatever it can to help the U.S. economy and its labor market. The U.S. stocks climb on speculation as investors are looking for a potential rebound through a batch of corporate earnings and the economic stimulus from the Fed. In the meanwhile, the Fed is promising to extend its lending governments, businesses, and individuals until early 2021; especially, the Fed starts injecting a considerable sum of money in pharmaceutical companies to help produce ingredients to fight against COVID-19.

European stocks fluctuate throughout the session as investors are digesting a flood of earning reports from major banks and at the same time waiting for the result of a Fed meeting. For the market recaps, European markets are optimism about a new U.S. stimulus plan, the rising hopes of a potential vaccine, and decisions from the Fed.

Aussie market is in the rapid revival stage with a 32% ascend since March; however, the Australian share market edged slightly lower today due to waiting for an important meeting of the U.S. Fed. On the other side, Australia slipped into the stage of deflation, which giving the government the opportunity to intervene some service charge. In the short- term, Australia might be beneficial from deflation; however, in the long- term, Australia might face higher rates of unemployment and debt obligations.

Market Wrap

Main Pairs Movement

        Gold is in the gaining position, trading at 1962.75 as of writing, for a nine straight- day period amid the global pandemic crisis. As the dollar continues to stay fragile, gold continues to surge to an all-time high; gold is winning over a wider fan base of pension funds, private wealth specialists, and insurance companies. Major banks have already forecasted a rally to $2,300 while the yield on U.S. treasuries is record low. Investors start transferring their risk sentiments to the traditional safe- haven commodity, gold.

British Pound continues to appreciate against the dollar after the release of the initial outcome from the U.S. Federal Reserve. As the Fed rate remains unchanged, GBPUSD’s bullish momentum carries on dollar weakness, currently testing the 1.3006 level. Nonetheless, the pound is in an unclear stage due to the uncertainty surrounding Brexit. It is expected to see the dollar falls further tomorrow as the GDP(Q2) for the U.S. is going to release.

COVID-19 Data (EOD):

Technical Analysis:

EURUSD (H4)

EURUSD is in a steady and stable upward trend as the dollar continues to be in a bearish momentum after the U.S. Fed meeting. The Euro is underpinned by the impetus of safe- haven seeking and USD sell- off. EURUSD is now challenging its resistance level at 1.1805, with a strong supporting pivot at 1.1719 and 1.1596. As of now, EURUSD is still securely trading above and beating its 100 SMA.

Resistance: 1.1805

Support: 1.1752, 1.1719

AUDUSD (H4)

AUDUSD is in a bullish momentum, now testing 0.7182 after the announcement from the Fed. The Australian dollar is upheld by the safe- haven sentiment as the Dollar Index continues to drop and get weaker. AUDUSD is now testing its resistance level at 0.7182 with the firm supports pivots at 0.7122 and 0.7092. If it eventually breaks through, AUD is expected to have blue skies in the 0.73 area, backed by Australia’s historically large trade and Chinese’s industry- driven economic rebound. AUDUSD is anticipated to carry on its bullish momentum as the pair is firmly trading above the 20 SMA in the four- hour chart as of writing.

Resistance: 0.7182

Support: 0.6996, 0.7092, 0.7122, 0.7151

USDJPY (H4)

Japanese Yen has reached its 4- month low at 104.84 against the dollar as of writing. The 20 SMA in the 4- hour chart maintains its bearish trend above the current level. The Yen is underpinned by its two strong support levels, 105.59 and 105.04. If the dollar remains the weakest after the announcement from the Fed, the pair is expected to break through its current resistance level, 104.89.

Resistance: 104.89

Support: 105.04, 105.35, 105.59, 106.74

Economic Data