Daily Market Analysis

Market Focus

An American biotechnological company, Moderna Inc. reached an unprecedented deal of $1.5 billion with the Trump administration to supply 100 million does of its experimental vaccine for COVID-19. Under the deal, Moderna Inc. will provide about 100 million does, with the price of around $30.50 per person. In the meantime, the U.S. government also has made agreements with other biotechnological and pharmaceutical companies for potential COVID-19 vaccines, including Johnson and Johnson and Sanofi…etc. With all the potential progress, it essentially elevates the U.S. market.

U.S. stocks and U.S. equities surges in an across the board rally as investors reacts the rebound of gold, the development of vaccines, and Treasury yields retreat to nearly seven- week highs. The S&P 500 gradually approaches the record level prior to when the COVID-19 crashed markets, and the Nasdaq climbs, led by the health care, technology, and utilities sectors.

Market Wrap

Main Pairs Movement

EURUSD has gone into a consolidation phase in the 1.1780 price zone as of writing. The euro seems to be a little stronger than the dollar after the reveal of U.S. consumer price index report surprises on the upside. U.S. consumer price index comes in higher than expected in the month of July, posting 0.6% verse 0.2% expectation. On the euro side, although the Industrial Production data is slightly worse than the expectation, the shared currency capitalized on risk flows and gathered strength against the dollar.

After surging around 30% this year, the precious metal, gold has once fallen below $1900 per ounce level, and continues its bearish momentum for the second- straight day. The huge pullback suggests that a price movement is driven more by short- term trading than a fundamental shift in sentiment. Another main factor to drag gold down is the boosted by global stimulus plans to support countries’ economies. As the global economy is suffering from catastrophes caused by the pandemic, countries are doing their best to save and revive economies.

COVID-19 Data (EOD):

Technical Analysis:

GBPUSD(H4)

GBPUSD extends its decline as of writing. In the 4- hour chart, it shows that a mere bearish mode has contained intraday attempts to advance; at the same time, the pair is currently trading below the 20 SMA. The pair is currently testing its first support level at 1.3029; the bearish momentum will likely accelerate toward 1.2973 level after breaking through its support level. Additionally, MACD indicator advises a selling trend on the doward reversal.

Resistance: 1.3068, 1.3155

Support: 1.3029, 1.2973

USDCHF (H4)

USDCHF remains neutral as consolidation is extending. With its resistance level at 0.9192 intact, several failures to challenge the resistance suggest that a further fall is still expected. However, the pair is expected to remain in a consolidation zone for a while since it is trading on the 20 SMA; in the meanwhile, the RSI indicator at the 45.58 mark shows that the pair is neither overbought nor oversold. Though, if the pair eventually breaks through 0.9107, it will likely confirm short term bottoming toward 0.9065.

Resistance: 0.9192, 0.9220

Support: 0.9107, 0.9065

CADJPY(H4)

CADJPY extends its bullish momentum as of writing. The pair is testing a new 2- month high, 87.90, back in June 2020. In the short- run, the RSI indicator suggests the condition of overbought, reflecting a positive momentum. In the 4- hour chart, trading firmly above the 20 SMA suggests a bullish mode for CADJPY. That being said, CADJPY is looking for an upside recovery, shifting to bullish in the short run.

Resistance: 80.697, 80.937

Support: 80.004, 79.632, 79.114

Economic Data