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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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Date : 8th July 2020.

EURUSD – The remainder of the week.

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EURUSD, H4 – Even though the weekly framework is still sideways, the overall view of this pair is still considered positive. However, due to the strength of the USD yesterday, the pair pushed back to below 1.3000, after it initially propped up following the European Economic Report yesterday . Overall, the results were lower than expected. German industrial production came out at 7.8% from the forecast of 11%. France had a trade deficit more than expected at -7.1 billion, while Italian retail sales came out better than expected.

Throughout June the pair was in the range of 1.1200-1.1350. In the H4-chart it has been being supported by the 50-period EMA line since yesterday. From last week we began to see higher lows as well as new highs, suggesting that it is likely to see the pair test the same high again at 1.1350. The MACD is still in the positive territory, but if we see the pair breaking through the 50-period-EMA, it could be seen that this pair will come down to test the key support zone at the 200-period EMA , which clashes with the 1.1200 low.

However, in larger time frames like the weekly one, it can be seen that the EURUSD is already trying for the 6th consecutive week to pass the major Resistance level at the 200-week EMA or higher, but it looks to be stuck between the 50-week and the 200-week EMA. Hence any pullback away from the 200-week EMA could see the asset retesting the 50-week EMA line if the 1.1200 fails to provide Support.

The economic calendar this week is quiet. The key data from the EUR side today is the European Commission’s economic growth forecast. On Thursday, there is the European group meeting Including numbers using the US unemployment privileges, and on Friday, US PPI numbers will be announced.

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

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 : 9th July 2020.

14th consecutive decline in US claims.

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After it pared declines as a mostly risk-on session in Asia, led by a continued rally in Chinese stocks, gave way to a less certain session in European markets, Dollar was little changed after the slightly higher than consensus rise in jobless claims. EURUSD turned slightly lower to 1.1335 from 1.1340, while USDJPY was pretty much unchanged, bouncing between 107.17-107.40.

US initial jobless claims dropped -99k to 1,314k in the week ended July 4, close to forecasts. The prior report for June 27 was revised to show a -69k decline to 1,413k (was 1,427k). This is the 14th week of decline from the record 6,867k from March 27. It brings the 4-week moving average to 1,437.25k from 1,500.25k (was 1,503.75k). Continuing claims declined -698k to 18,062k in the week ended June 27 versus 18,760k (was 19,290k) in the June 20 week. And continuing claims are down from a May 9 high of 24,912k. The insured unemployment rate fell to 12.4% from 12.9% (was 13.2%).

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Today‘s improvement was encouraging, though claims declines overall continue to fall short of the rebound we’re seeing in nonfarm payrolls, as well as the increases into the summer for most available supply and demand measures for the economy, though with some restraint in gains recently from pull-backs in re-openings.

[IMG]

Treasury yields are inching slightly lower, even as equity futures rally. There was no real impact from the 14th consecutive decline in initial jobless claims. The 10-year yield is 1.8 bps richer at 0.646%, while the 2-year has dipped to 0.157%. Equity futures are now in the green, albeit barely for the USA30, while the USA100 is 0.6% firmer and the USA500 is up 0.2%.

Caution over the coronavirus, with another record increase in US cases, and concerns over the reopening process are dictating a lot of the trade.

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 : 13th July 2020.

Events to Look Out for This Week.


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An interesting week is coming up, packed with economic data and political developments, as next week’s EU summit highlights that the EUR 750 bln recovery fund proposed by the European Commission remains controversial in its proposed form, and remains far from certain. Attention will remain on virus reports and on the monetary policy meetings in the world’s major economies (ECB, BoJ and BoC) and their potential for guidance regarding future stimulus actions.
.Monday – 13 July 2020

  • BoE’s Governor Bailey speech (USD, GMT 15:30) – In June’s meeting, the BoE voted unanimously to keep rates unchanged, but a 8-1 majority opted for an extension of the asset purchase target by GBP 100 bln to now GBP 745 bln. The overall tone of the assessment seemed less gloomy than the sharp contraction in monthly GDP had suggested. This speech could clear the view of further stimulus and the reports that the BoE has been talking with commercial banks to prepare them for the possibility of negative interest rates.

Tuesday – 14 July 2020
 

  • Harmonized Index of Consumer Prices (EUR, GMT 06:00) – The German HICP inflation for June is anticipated to decline at 0.5% y/y from 0.8% y/y.
  • Gross Domestic Product (GBP, GMT 06:00) – GDP is the economy’s most important figure. April’s GDP was contracted to -20.4% m/m.
  • ECB Bank Lending Survey (EUR, GMT 08:00) – The bank lending survey (BLS) for the euro area was launched in 2003. Its main objective is to enhance the Eurosystem’s knowledge of financing conditions in the euro area.
  • Economic Sentiment (EUR, GMT 09:00) – German July ZEW economic sentiment is expected to have declined at 60.0 compared to 63.4 in June.
  • Consumer Price Index (USD, GMT 12:30) – The headline CPI for June is expected with a 0.1% core price rate, following May declines of -0.1% for both. The headline will be boosted by an estimated 13% June pop for CPI gasoline prices. As-expected June figures would result in a headline y/y increase of 0.6%, up from 0.1% in May. Core prices should sit a 1.0% y/y rise, below the 1.2% y/y pace last month.
  • SNB’s Chairman Jordan speech (CHF, GMT 13:30)

Wednesday – 15 July 2020

  • BoJ Interest Rate Decision and Conference (JPY, GMT 03:00- 06:00) – Shadowed by Covid-19, the BoJ has less room for monetary policy manoeuvre, with Japan not depending on foreign investment inflows to sustain financing and with Japanese investors apt during times of risk aversion in global markets to repatriate capital from the sale of foreign assets, and/or put on currency hedges on foreign assets.
  • Consumer Price Index and Retail Sales (GBP, GMT 06:00) – Prices are expected to have eased in June, with overall inflation expected to stand unchanged at 0.5% y/y, and core at 1.3% from 1.2% y/y last month. UK retail sales expected to grow slightly to 0.1% in June.
  • BoC Interest Rate Decision and Conference (CAD, GMT 14:00- 15:00) – Bank of Canada expected to maintain the 0.25% rate setting. However, since in the latest announcement the Bank maintained its commitment to continue large-scale asset purchases until the economic recovery is well underway, this is expected to be seen again this time.

Thursday – 16 July 2020

  • Employment Data (AUD, GMT 01:30) – Both the unemployment rate and the employment change are expected to have grown in June.
  • Gross Domestic Product (CNY, GMT 02:00) – GDP is the economy’s most important figure. Q2’s GDP is expected to be dropped to -9.9% q/q contraction from -9.8%q/q.
  • Average Earnings (GBP, GMT 06:00) – Average Earnings excluding bonus are expected to have grown by 1.4% in May. The ILO unemployment rate is expected to have risen at 4.7% from 3.9%.
  • ECB Interest Rate Decision and Press Conference (EUR, GMT 11:45 & 12:30) – So far the ECB seems to have been united behind the goal to provide financial market stability through the crisis as lockdowns not just across Europe plunged economies into deep recessions. However, hectic diplomacy ahead of EU summit highlights that the EUR 750 bln recovery fund proposed by the European Commission remains controversial in its proposed form, and remains far from certain. At the same time, there is a new rifts emerging at the ECB – not just over the need to use the full PEPP envelope, but also over the future of the inflation target. Virus headlines have distracted from the fact that the ECB is currently in the process of conducting a thorough review of its overall strategy and that also involved the definition of price stability, which currently still is set as “below but close to 2%”. In the current situation that would mean the central bank would leave expansionary policy measures in place longer than necessary to bring inflation back to the 2% target.
  • Retail Sales (USD, GMT 12:30) – June increases are expected at 6.0% for headline retail sales and 6.7% for the ex-auto figure, following May increases of 17.7% for the headline and 12.4% ex-autos.

Friday – 17 July 2020

  • EU Leaders Special Summit
  • Consumer Price Index (EUR, GMT 09:00) – The final Euro Area CPI for June is anticipated to slow down to 0.1% y/y from 0.3%y/y last month. The core inflation is seen at 0.9% y/y from 0.8% y/y.

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 : 14th July 2020.

Sterling in the Cross-hairs today.

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GBPUSD, H1
UK data today has continued the pressure on Sterling, with the UK economy rebounding less than expected in May. Overall GDP lifted 1.8% m/m, compared to Bloomberg consensus of 5.5% m/m. With economic activity still falling -20.3% m/m in April, the modest uptick over the month still saw the annual rate falling back to -19.1%, from -10.8% y/y in the previous month. Industrial production actually lifted 6.0% m/m and construction output rebounded 8.2% m/m, but rebounds fell short of expectations and this also holds for the index of services, which lifted a mere 0.9% m/m, after still falling -18.9% m/m in April. Services are still down nearly 19% on last year’s levels, construction output is nearly 40% below the levels in May last year and overall industrial production 20%. Virus restrictions came later and subsequently were also lifted later in the UK compared to most other European countries, and forward looking confidence data are signalling that at least the construction sector is back in expansion territory. Still, the numbers highlight downside risks, especially as there is also not much progress in trade talks with the EU, leaving the risk that the transition period will end without a new deal in place.

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The Office for Budget Responsibility (OBR) also issued their latest updates today and it makes sorry reading for the UK economy, with expectations of record peacetime levels of public debt and the largest decline in UK GDP in 300 years.

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Cable carved out a six-day low at 1.2537, which has been partly a product of sterling underperformance following a much weaker than expected UK May GDP figure, and followed through to test 1.2505 following the OBR report. EURGBP concurrently lifted to a seven-day peak at 0.9069, and GBPJPY traded into six-day low terrain at 134.17.

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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Date : 15th July 2020.

FX Update – July 15 – A Softer USD persists.

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EURUSD, H1
The Dollar has remained on a softening track against most other currencies, while the Euro has remained broadly underpinned amid expectations for EU leaders to green-light the proposed EUR 750 bln recovery fund this week. The Pound managed to rebound after underperforming over the prior two days. Risk appetite has been buoyant, with European and Asia stock markets rallying and US equity index futures gaining, underpinned by news that US biotech company Moderna’s candidate vaccine for the SARS Cov-2 coronavirus was shown in an early-stage trial to be safe while successfully provoking immune responses in all 45 of the volunteers. News from Oxford, UK¹, too, that more progress is being made on the vaccine front also helped lift sentiment and equity markets.

The narrow trade-weighted USDIndex carved out a fresh one-month low at 95.80, drawing in on the four-and-a-half-month low seen in June at 95.72. EURUSD rallied to its highest level since early March at 1.1445. Cable rallied to a two-day high at 1.2626, extending a strong rebound from Tuesday’s eight-day low at 1.2479. The rise in Cable wasn’t just a softer dollar story, as the Pound concurrently rebounded against the Euro, driving EURGBP to a 0.9051 low, extending a correction from yesterday’s two-week high at 0.9115. GBPJPY also lifted to a two-day high. USDJPY drifted under 107.00, expecting a moderate correction from yesterday’s one-week high at 107.44. The risk-sensitive AUDJPY cross printed a five-week high at 75.29. AUDUSD similarly reached a five-week peak, at 0.7020. The BoJ left policy unchanged, as had been widely anticipated. Governor Kuroda maintained dovish guidance, noting that there remain various tools that could be utilized for further easing.

Ahead of the BOC later, USDCAD has ebbed to a two-day low at 1.3560, weighed down by a combination of the broader US dollar softness and a broadly firmer Canadian currency, which has been concomitant with a bout of risk-on positioning in global markets. Front-month USOil futures have rotated higher following a phase of sub-$40 pricing, printing a six-day high at $40.93, which has been supportive of oil-correlating currencies, including the Canadian Dollar. Gold continues to wind higher, trading to a four-day high at $1815 earlier, before cooling to $1805 currently.

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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Date : 16th July 2020.

EUR & ECB Preview.

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Economic activity has rebounded on both sides of the channel as lockdowns were lifted, but the impressive rebound in confidence data in recent months has proven to be too optimistic on the speed of the recovery with real sector data for May actually looking weaker than hoped. That ties in with the moderation in market confidence, which was also reflected in German ZEW investor confidence, which pulled back from June highs in today’s July numbers. Central bankers meanwhile acknowledge that the second quarter may not have been as bad as initially feared and have essentially switched to a wait and see stance, after putting substantial crisis measures in place.

With that in mind the ECB is widely expected to keep policy settings unchanged at today’s meeting. Lagarde’s recent comments suggest that data releases have come in slightly better than officials had feared and the central bank seems ready to move out of crisis mode and into a wait and see stance. That doesn’t mean the ECB won’t keep the option of additional easing measures open, but for now officials should be able to afford to take a step back and monitor the impact of crisis measures already implemented.

Wait and see then is likely to be the main message at today’s council meeting, although Lagarde will, however, stress again the need for fiscal stimulus to support monetary policy and step up the pressure on politicians to come to an agreement on the proposed EUR 750 bln pandemic recovery fund, that will be discussed at the EU leaders summit later in the week. Central bankers have long stressed the need to complement monetary policies with appropriate fiscal policies and on the whole central bankers also seem to welcome the proposal for a jointly funded mechanism and a focus on grants rather than loans.

The debate will take place within the context of the EU’s next multiannual budget framework, and won’t be easy, as countries disagree on whether to focus on grants or loans and whether jointly backed market funding is the right way forward.

Markets have the fund pretty much priced in and the risk is of course that the reality of EU politics once again falls short of what investors are looking for.

DAX – GER30

Meanwhile European stock markets are broadly lower with peripheral markets outperforming slightly going into the ECB meeting. General risk appetite has waned again amid concerns about the global outlook and rising tensions between the US and China. The GER30 is currently down -0.8%, and the UK100 down -0.9%, while IBEX and MIB are posting losses of -0.1%. US futures are also heading south following on from a broad move lower across Asian markets.

GER30, despite the short term decline, sustains 4-month highs, close to the 13,000 area. The index filled May’s and June’s gap, while it has been trading well above Ichimoku cloud since May, suggesting an overall positive bias. All daily exponential moving averages (20, 50 and 200) are aligned northwards. Momentum indicators are gradually moving more positive as the market has pulled higher this week. RSI is above 60 and confirming higher lows since early June, inline with the uptrend in the price action along with strong positive configuration on Stochastics, despite the flattening of MACD lines that suggest consolidation. The bulls could be looking to use any near term weakness as an entry point. Hence Support could be seen at 12,500 (20-DMA and 76.4% Fib. level since January 2020).

It is interesting to see though that despite the positive technical background it struggles to break the 13,000 Resistance area.

[IMG]

EURO

The EUR fell back against a generally stronger US Dollar, with EURUSD trading slightly above S1 at 1.1384. Risk appetite waned again, amid concern about the world recovery, and US-China tensions and with the security breach at Twitter Inc not helping. Eurozone markets which traded unevenly yesterday are likely to remain cautious going into the ECB announcement today.

EUR intraday remains under pressure with fast MAs aligned lower and lower Bollinger bands extending southwards. Next immediate support could be found at 1.1350, and 1.1330 (200-EMA in 1-hour chart). Volumes meanwhile declining suggesting that the bullish momentum seen since 10 of June is threatened.

[IMG]

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 : 17th July 2020.

FX Update – July 17 – Preparing for the Weekend.

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USDCAD, H1

Currencies have hunkered down in narrow ranges, with the Dollar and Yen consolidating after rising against most other units yesterday. Global stock markets are lacking direction, too. The persisting pandemic remains a concern for investors, even though the lack of fresh cases in many reopened countries now looks like nothing more than a bad respiratory illness season. Offsetting pandemic concerns are expectations for the US and other countries to extend “first wave” fiscal support packages before they expire, while EU leaders will meet later today to move the proposed EUR 750 bln recovery fund toward fruition.

Among currencies, EURUSD settled just above the three-day low that was seen yesterday at 1.1370. USDJPY plied a sub-20 pip range in the lower 107.00s, and EURJPY and other yen crosses were similarly directionally challenged. AUDUSD held in a narrow range above yesterday’s three-day low at 0.6963. AUDJPY did likewise. USDCAD edged out a two-day high at 1.3589, extending a rebound from Thursday’s eight-day low at 1.3500. Front-month USOil prices remained in a narrow-range consolidation below the three-week high seen earlier in the week at $41.26. Highlights on the calendar today include eurozone June inflation and US consumer confidence data, neither of which are likely to impact markets much. Market participants will also be watching the White House for a decision on whether President Trump will follow through on his threat to ban Chinese Communist Party members from travelling to the US.

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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Date : 20th July 2020.

Events to Look Out for This Week.


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The week ahead will be a quiet one due to the limited economic releases, with the most telling data the preliminary estimates of July manufacturing PMIs from across the globe.
Monday – 20 July 2020

  • PBoC Interest Rate Decision (CNY, GMT 01:30) – The People’s Bank of China announced heavy government and PBoC stimulus measures in the 1st half of the year. However, China’s central bank isn’t planning much more stimulus for the country as its economy looks to be recovering.
  • National CPI Index (JPY, GMT 23:30) – The Japanese price index should have zeroed on a y/y basis, compared to 0.1% in May.

Tuesday – 21 July 2020
 

  • RBA Minutes (AUD, GMT 00:30) – The RBA minutes will provide more insight on the views the Australian Central Bank has about the economy.
  • Retail Sales (CAD, GMT 12:30) – Core Canadian sales ex Autos are anticipated to have dropped by -13.5% m/m in May, but higher than April’s drift at -22% m/m.

Wednesday – 22 July 2020

  • Consumer Price Index and Core (CAD, GMT 12:30) – June BoC CPI is expected higher at 0.9% y/y from 0.7% y/y and at 0.2% m/m from 0.3% m/m in May.
  • Existing Home Sales (USD, GMT 13:00-14:00) – A 22.8% rebound is anticipated in existing home sales in June to a 4.800 mln pace, after a drop to 3.910 mln in May. The MBA purchase index surged by 40% in May and 17% in June, before a 3% rise thus far in July, after falling -21.8% in April. Existing home sales are tracked at closings, so sales by this measure remained weak into May even though the sector was bouncing. The median sales price is expected to rise to $285,000 in June to leave a y/y decrease of -0.1%, down from a 2.3% y/y rise in May, with potential downward pressure from a skewing of sales toward lower-cost areas. In Q1, we saw an average sales pace of an elevated 5.483 mln, and we expect a lower 4.347 mln pace in Q2.

Thursday – 23 July 2020

  • Jobless Claims (USD, GMT 12:30)– US initial jobless claims declined -10k to 1,300k in the week ended July 11 following the -98k drop in the July 4 week to 1,310k (was 1,314k). It’s a 15th straight weekly decline since the record surge to a historic peak of 6,867k in late March.

Friday – 24 July 2020

  • Retail Sales (GBP, GMT 06:00) – Following the -9.8% m/m contraction in UK retail sales ex fuel in May, they are expected to decline further by -14.4% in June.
  • Services and Manufacturing PMI (EUR, GMT 08:00) – June PMIs marked contraction in manufacturing activity and a sharp slowdown in services sector growth. This picture is likely to be seen again in the preliminary readings for July, as German Manufacturing PMI has been forecast at 41.5 and composite at 44.2, which it is still below neutral. Meanwhile, Services PMI is expected to fall to 42.0. The Manufacturing and Services PMI for Eurozone is seen at 44.5 and 41 respectively.
  • UK Service PMI (GBP, GMT 08:30) – The preliminary services PMI for July are seen to remain in contraction levels at 47.0.
  • Services and Manufacturing PMI (USD, GMT 13:45) – Preliminary Manufacturing are expected to slip in July, to 48 from 49.8.

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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EU leaders reach a deal – EUR mixed.

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EU leaders reach agreement on recovery fund, 7-year budget. After the second longest summit on record EU leaders managed to find a complex compromise on the EUR 750 bln pandemic recovery fund and the next seven year budget, which together amount to an unprecedented EUR 1.82 trillion. That these discussions would not be easy was clear from the outset, and after marathon talks the compromise is a complex system that aims to accommodate all sides.

The portion of grants in the pandemic recovery fund was scaled back to EUR 390 bln from EUR 500 bln in the original proposal. There is also a new system that allows states to stop handouts by qualified majority over rule-of law violations, a move that finally appeased Dutch Premier Rutte, who had voiced concern over some legislation in Poland and Hungary. The Netherlands and Austria were also among the countries securing larger budget rebates in exchange for agreeing to cash handouts, rather than conditional loans that require budget oversights in the recovery fund. The European Commission will also be tasked with coming up with proposals on protecting the EU budget and recovering spending more effectively.

All in all a complex deal – typical for the EU – and while a deal is on the table, the EUR is heading south in what looks like a “buy the rumour sell the fact move” that likely also reflects some disappointment over the lower portion of grants in the recovery fund. EURUSD is currently trading at 1.1447 (above PP), while the Pound is little changed from yesterday against the Dollar and higher against the EUR.

GER30 and UK100 futures are up 0.5% and 0.4% respectively and US futures are also making headway, with the USA100 outperforming again.

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BTPs already rallied yesterday, there may be some consolidation today, especially as the final portion of grants was lower than in the original proposal at EUR 390 bln out of a EUR 750 bln total.

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 : 22nd July 2020.

FX Update – July 22 – Dollar & Yen Down.

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AUDUSD, H1
The Euro, along with the Aussie and Kiwi Dollars, posted fresh highs against the Dollar and Yen, despite a backdrop of flagging stock markets. EURUSD reached its highest level since January 2019, at 1.1547, the culmination of what has now been a five-week rally. EURJPY pegged a fresh six-week high at 123.34. Most other Euro crosses are also firmer, though remain below recent highs. Cable has moved below 1.2700, to 1.2660, below Tuesday’s six-week peak at 1.2768. USDJPY plied a narrow range just above the one-week low seen yesterday at 106.68, while EURJPY and the risk-sensitive AUDJPY scaled to respective six-week highs. GBPJPY and CADJPY, in contrast, remained below their respective six-week highs, which had been printed yesterday. AUDUSD reached a new 15-month peak at 0.7165, while NZDUSD ascended further into 18-month high territory. USDCAD settled around the 1.3450 mark, above the six-week low seen yesterday at 1.3422, concomitant with front-month USOil futures at $41.50, below the three-and-a-half month peak that was left at $42.40 yesterday.

Gold and silver prices have continued to surge, reflecting investors’ expectation for global monetary stimulus taps to remain open and the Dollar to remain weak. The gains in the non-yielding assets also reflect concerns that inflation might spike as a consequence of the stimulus. XAUUSD rallied to $1865 earlier before cooling to the $1850 zone, whilst XAGUSD ran to $22.80 (October 2013 highs) before trimming gains to R1 at $21.70.

In other news, the UK’s Telegraph newspaper reported that the UK government is pessimistic about reaching a trade deal with the EU, just days before Prime Minister Johnston’s end-of-July deadline for reaching a deal in principle. The FT also reported, citing unnamed senior government officials, that the UK government has abandoned hopes for reaching a trade deal with the US before the presidential election in November, which means that there will be zero hope for a deal by the time Britain leaves the EU’s single market at the end of the year. The pandemic gets the blame for the slow progress.

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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Date : 23rd July 2020.

FX Update – July 23 – USD Trends Lower.

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Trading Leveraged Products is risky
The Dollar has continued to track lower, despite a backdrop of flagging stock markets in Asia, although US equities closed with moderate gains yesterday and S&P 500 futures are showing a modest rise in overnight trading. The narrow trade-weighted USDIndex (DXY) printed a fresh four-and-a-half-month low at 94.82, drawing in on the early March low at 94.66, which was the lowest level seen since August 2018.

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EURUSD has been buoyant, though has remained below the 21-month high that was printed yesterday at 1.1601. The pair is amid its fifth week of an accelerating rally phase, underpinned both by broader dollar weakness (amid shifting risk premia in global markets) and broader euro outperformance (on the back of the EU recovery fund, seen as reducing Eurozone breakup risk while creating a new liquid AAA fund that will attract foreign investment). The common currency has been gaining against most other currencies recently, outside the case against the outperforming commodity currencies. The research team at Goldman Sachs is anticipating a further 10% gain in the Euro. EURJPY has seen a similar price action to EURUSD today, in holding off yesterday’s seven-week peak. Other euro crosses have also been steady.

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Elsewhere, USDJPY has continued to ply a narrow range near the 107.00 level. Cable remained buoyant, settling in the lower 1.2700s, below Tuesday’s six-week high at 1.2768. The Pound has been trading more mixed against other currencies. AUDUSD has settled near 0.7150, so far holding below the 15-month high seen yesterday at 0.7183. A sharp drop in Australia’s Q2 business confidence survey had been widely anticipated, as was a downbeat economic update of the Federal government. USDCAD posted a fresh six-week low at 1.3378, with the Canadian Dollar firming concomitantly with oil prices. Front-month USOil lifted back above $42.00, drawing back in on Tuesday’s four-and-a-half-month high at $42.40.

Geopolitics remain a concern, as China blacked out English premier league games on Chinese television, and closed the US consulate in Chengdu in retaliation for the White House closing the Chinese consulate in Houston. President TRUMP said Chinese consulates in other US cities could come under investigation.

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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Date : 24th July 2020.

FX Update – July 24 – USD remains heavy.

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USDJPY, H1

The Yen has outperformed today as risk aversion took a firm grip on global markets. The Dollar has so far failed to pick up safe haven demand, and has remained on a softening path. The narrow trade-weighted USDIndex carved out a fresh 22-month low at 94.49. The Dollar has lost appeal partly on the advent of the EU’s recovery fund, seen as a milestone by many analysts that has served to tip the balance out of the dollar’s favour, and partly amid expectations for dovish guidance from the Fed at next week’s FOMC, with some speculating that the US central bank is considering yield curve targeting. A Reuters survey highlighted increasing pessimism about the nearer-term US outlook given the extent of localized lockdown measures in response to the spike in coronavirus cases across many southern and western states. Intel also underwhelmed markets in its guidance for Q3 earnings.

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Against this backdrop, EURUSD remained firm, although off from the 21-month peak that was seen yesterday at 1.1628. USDJPY dropped by 0.5% to a one-month low at 106.17. Yen crosses were concurrently weak, driven by safe haven demand for the Yen. EURJPY fell to a two-day low at 123.36, extending a correction from Wednesday’s seven-week peak at 124.30. AUDJPY has been the biggest mover of the day so far, dropping 0.6% to a three-day low at 75.32. AUDUSD fell by a lesser magnitude, but still managed to peg a three-day low, at 0.7074. USDCAD lifted to within a pip of its peak from yesterday, at 1.3428. Oil prices have remained heavy after yesterday sinking to three-day lows. Cable edged out a fresh six-week high at 1.2773. The pair has been trending higher for about three weeks, though recent daily price action has been jagged and upside momentum has been waning, with the Pound having been weakening against other currencies on signs, and confirmation at a press conference yesterday, that the UK and EU remain deadlocked on key issues in trade talks.

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The first reading of July PMIs from the Eurozone and the UK both beat expectations earlier. The Markit Composite EZ number came in at 54.8, significantly above expectations of 51.1 and back in expansion territory over 50.0. The preliminary UK July PMI surveys smashed expectations, with the composite headline surging to a five-year high of 57.1, up from 47.7 in the final reading for June and well up on the median forecast for a 50.8 reading. This extends the strong rebound for a third consecutive month from April’s series-record low at 13.8. The services PMI rose to 56.6 from 47.1 and the manufacturing PMI lifted to 53.6 from 50.1. However, a note of caution accompanied the data, with Markit noting – “July’s PMI represents a step in the right direction, but there is a mountain still to climb before a sustainable recovery is in sight.”

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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Date : 27th July 2020.

Events to Look Out for This Week.


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The growing worries over the spreading coronavirus, the rollback in some reopenings, and possible flattening in growth have set the scene for risk aversion. Adding to the mix is the the increased friction between the US-China. Therefore next week’s inflation and GDP data out of some of the major economies and Fed monetary policy and press conference could be the highlights in the coming week. Another focus is the upcoming Q2 corporate earnings season, which will get into gear next week with “show and tells” from the FANGs and tech sector in general.

Have a look at the most important events of the coming days in our usual weekly publication.

Monday – 27 July 2020
 

  • German IFO (EUR, GMT 08:00) – German IFO business confidence is expected to slip to 85 after the jump seen in June. The current conditions index nudged higher, but less than hoped and the overall improvement is mainly due to a jump in the future expectations reading.
  • Durable Goods (USD, GMT 12:30) – Durable goods orders are expected to rise 14.0% in June with a 55.7% surge in transportation orders, after a 15.7% headline orders rebound in May that included an 82.0% transportation orders surge. Durable shipments should rise 10.5%, and inventories should rise 0.5%.

Tuesday – 28 July 2020
 

  • Consumer confidence (USD, GMT 14:00) – Consumer confidence is expected to bounce to 128.0 in July from 121.5 in June, versus another 16-month low of 121.7 as recently as January and an 18-year high of 137.9 in October. Overall, confidence measures remain historically high.

Wednesday – 29 July 2020
 

  • Consumer Price Index (AUD, GMT 01:30) – Australian Q2 CPI is expected to rise to 0.2% after confirmed at 0.3% q/q for Q1 2020.
  • Interest rate Decision and Conference (USD, GMT 18:00) – The FED is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. Hence dovish guidance is expected from the Fed at next week’s FOMC, with some speculating that the US central bank is considering yield curve targeting. A Reuters survey highlighted increasing pessimism about the nearer-term US outlook given the extent of localized lockdown measures in response to the spike in coronavirus cases across many southern and western states.

Thursday – 30 July 2020
 

  • Gross Domestic Product (EUR, GMT 06:00) – Q1 2020 GDP was confirmed at -2.2% q/q as investment, consumption plunged. Q2 will look even worse as several economic sectors remain impacted by lockdown and new measures. More importantly, the disruptions of supply chains during the height of lockdowns have led many to re-focus on domestic production and Germany’s export oriented production sector that also relies heavily on real time supply chains, may have to rethink its strategy long term.
  • Harmonized Index of Consumer Prices (EUR, GMT 12:00) – The German HICP inflation is expected to slip back to 0.6% y/y for July after it was revised up to 0.8% y/y in June.
  • Gross Domestic Product (USD, GMT 12:30) – Gross Domestic Product is expected to show a contraction rate of -32.0%, with weakness across all the GDP components thanks to mandatory closures between mid-March and early-May. The Q2 hits to the economy were particularly large for net exports, and exports in particular, alongside hefty pull-backs in service consumption.
  • Jobless Claims (USD, GMT 12:30)– US Initial jobless claims rose 109k to 1,416k in the week ended July 18, missing estimates for a 16th straight decline. This uptick follows the -3k slide to 1,307k (was 1,300k) in the July 11 week and the -98k drop to 1,310k over the July 4 week.

Friday – 31 July 2020
 

  • Manufacturing PMI (CNY, GMT 01:00) – Final non- and NBS-Manufacturing PMIs are expected to decline in July, to 51.2 from 54.4 and 48.6 from 50.9 respectively.
  • Retail Sales (EUR, GMT 06:00) – 11% June retail sales gains are expected for Germany, following 13.9% May gains. April revised to -6.5% m/m.
  • Consumer Price Index & Gross Domestic Product (EUR, GMT 09:00) –The Eurozone Inflation was confirmed at 0.3% y/y in the final June reading, in line with the preliminary number and up from 0.1% y/y in the previous month. Core inflation fell back to 0.8% y/y as food price inflation decelerated, although at 3.2% y/y it remains high, largely thanks to the knock on effects of lockdown measures. The preliminary CPI for July is expected to come at 0.4% y/y, with the core inflation at 0.9% y/y. Preliminary Gross Domestic Product is expected to slow further to -4.7% in Q2, after Q1 GDP revised up to -3.6% q/q from -3.8% q/q reported initially.

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 : 28th July 2020.

eBay Earning Preview – Will it Benefit from Social Distancing?

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eBay (MT4 Symbol: EBAY) is set to report its second quarter 2020 earnings after the market closes on 28th July 2020 (Tuesday). It is attracting significant interest from investors as they will get an early look at the performance of the e-commerce company during the global lockdown because of the coronavirus pandemic. eBay will be the first among the major US e-commerce companies to report its earnings as Shopify will report its earnings on 29th July followed by Amazon on 30th July.

This week’s announcement also will be eBay’s first quarterly report under new CEO Jamie Iannone, who joined the company at the end of April. This quarterly report will be expected to leave a good impression as in early June, eBay raised its 2nd quarter (Q2) outlook as the company results exceeded expectations during Covid-19. They expect the Q2 revenue to increase in the range of $2.75 billion to $2.8 billion (April guidance: 2.38 billion – $2.48 billion) and adjusted earning per share in the range of $1.02-$1.06.

eBay will report its second quarter earnings on after US trading day closes later today (July 28). The e-commerce giant is expected to report earnings per share of $1.06, up from $0.68 in the prior year quarter. Revenue is projected at $2.80 billion with the growth estimate for the current quarter at 4.10%. Most analysts expect that eBay’s upcoming earnings report will beat the forecast.

Technical Analysis
eBay’s share price has been on fire in 2020. eBay stock currently trades at $57, after climbing ~57% in 2020. BMO Capital lifted the target price of eBay stock to $59, while Wedbush and Keybanc hiked eBay’s target price to $65.

From the technical perspective, the trend is currently bullish. The price is positioned higher than both the 50 Day Moving Average and the 200 Day Moving Average. The share currently trades at $57.21, slightly lower than the 2020 high of $61.13 which also act as a strong resistance. The subsequent resistance is at $66.71 (2015 high). The immediate support for the share is at $54.03 and followed by support at the 50 Daily MA ($50.61).

The share price is on course for its best performing year. The 14-day RSI indicator has retraced from overbought region and currently shows momentum to the upside.

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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.

Tunku Ishak Al-Irsyad
Market Analyst
HF Educational Office – Malaysia

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 : 29th July 2020.

FX Update – July 29 – USD got a break but not for long.

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USDJPY, H1

The Dollar relief rally yesterday and dip today is consolidating the sharp declines seen over the prior 10 days. The narrow trade-weighted USDIndex has posted new 25-month lows at 93.31 today, breaking below Monday’s 93.40 low. EURUSD is showing gains too, though below the 22-month high seen on Monday at 1.1780. Cable has moved higher to test R1 at 1.2975, and above the five-month high seen Tuesday at 1.2951. AUDUSD whittled out a fresh 15-month peak at 0.7192, 8 pips shy of the key 0.7200 which was last seen on April 14. USDCAD trades at the 1.3360 mark, above Tuesday’s seven-week low at 1.3329. USDJPY remains heavy, and broke below yesterday’s near five-month low at 104.93, to register a new low at 104.80 before finding support. The Japanese currency is registering as the biggest gainer on the week so far, gaining most against the US Dollar and New Zealand Dollar, with just over a 2% advance versus both underperformers. The sputtering price action in global equity markets has driven safe haven demand into the Yen, with the Dollar evidently perceived to be no longer providing protection.

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Profit taking and position trimming has been a theme across markets over the last day into the Fed’s policy announcement and the final week of political wrangling over the next US fiscal package (there is a degree of uncertainty about the outcomes of both, or at least in terms of signalling with regard to the Fed). Corporate earnings and concerns about the impact of new localized lockdown measures due to spikes in coronavirus infections have also been in the mix.

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Regarding the Fed, no policy changes are expected and a dovish stance is expected, though Forex markets will be laser focused on whether there is a signal that it will tolerate higher inflation, as this could weigh on real yields, and thereby the Dollar, further. Additional comments surrounding the purchase of longer-dated debt and the sticky and tricky issue of yield caps will be in the spotlight. The statement is due at 18:00 GMT with Chair Powell’s Press Conference 30 minutes later.

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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Date : 30th July 2020.

US GDP & Claims data.

 
 
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EURUSD, H1

The US advance GDP report beat estimates with a -32.9% Q2 contraction rate that was a modestly smaller drop than feared, though it still constituted a record drop, following annual revisions that raised the real and nominal GDP levels as of Q1, but left the chain price index the same. For revisions, the -5.0% Q1 real GDP figure was left unrevised, though the prior two quarterly gains were raised to 2.4% (was 2.1%) in Q4 and 2.6% (was 2.1%) in Q3, hence leaving a stronger trajectory into Q2. There were plenty of Q2 component surprises, with the big upside surprise coming from a much weaker than assumed real import figure, where we saw a -53.4% decline (import drops add to GDP), alongside an expected -64.1% export drop. We also saw a surprising 2.7% rise for real government purchases, instead of the widely assumed drop. The Q2 inventory figures posted the expected huge liquidation, with a -$234.6 bln inventory subtraction that left a record-large liquidation rate of -$315.5 bln. We saw more modest downside Q2 surprises for the investment figures, with a -27.0% contraction rate for business fixed investment and a -38.7% for residential investment. Consumption fell -34.6% in Q2, which was a tad weaker than we assumed but was in line with market estimates. Today’s GDP and claims data prompted tentative bumps to GDP forecasts to 28.0% (was 31%) in Q3 and 9.0% (was 7.5%) in Q4, and a trimming of the July non-farm payroll estimate to 2.6 million from 3.3 million.

The Dollar was unchanged following the data, where Q2 GDP fell a historic 32.9% and jobless claims rose another 1.434 mln versus the 1.422 previously. EURUSD sits near 1.1790, having spiked over 1.1800, and the USDJPY is steady at 105.15.

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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Date : 31st July 2020.

Sterling Storms On.

[IMG]


GBPUSD, H1


Cable has pinned a new five-month peak at 1.3145. The pair is now firmly back in pre-lockdown territory. The UK currency still registers as the weakest of the main currencies on the year-to-date, and by some distance in trade-weighted terms, while recent dollar underperformance has been somewhat flattering the Pound. Nevertheless, there are some convincing bullish arguments in market narratives. One is the pick-up in the pace of economic recovery in the UK, as evidenced by the much stronger than forecast preliminary July PMI data and improvement in the CBI’s July distributive sales report, which flagged a near full recovery in the retail sector, with sales in upcoming months seen at near seasonal norms. There have also been signs that have led markets to factor in improved odds for an EU-UK trade deal, with a number of sourced press reports suggesting that discussions are going better than the official line suggests. However, the Government’s handling of the pandemic has been coming under daily scrutiny and last night’s sudden announcement of restrictions and lock-downs in parts of northern England only added to the uncertainty.

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Technically, Cable breached the key 20-day simple moving average on July 7 and has rallied significantly over the last 11 trading days, posting consecutive gains each day. The next Donchian Channel top is 1.3200 and then 1.3500. The 200-day moving average sits way below at 1.2688 and the RSI has breached into the 80s this week into overbought territory.

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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Date : 6th August 2020.

FX Update – August 6 – USD to new lows.

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Trading Leveraged Products is risky
The USDIndex edged out a fresh 27-month low at 92.50, continuing what is a fourth consecutive week of decline and a fourth straight month of decline, dropping by just over 10% from the early March peak. The loss of confidence in the US currency has partly been reflected in the ongoing rally in gold, which has remained buoyant after posting a fresh record nominal high at $2,055.00 yesterday.

A deal on the US fiscal package remains elusive, though President Trump’s threat to take executive action to cut payroll taxes managed to keep investor spirits up, along with the above-forecast services ISM out of the US, and more positive news from the candidate vaccine front for the SARS Cov-2 coronavirus. The good vibe across equity markets flagged somewhat as the Asia session wore on, however. The MSCI Asia-Pacific equity index printed a six-and-a-half-month-high during early trading before turning lower to near net unchanged levels. S&P 500 futures, while off highs, still show moderate gains, while the European markets have opened lower to start the day.

AUDUSD saw a downward flurry after the Australian government lifted its unemployment forecast while forecasting growth would be trimmed by 2.5 percentage points as a consequence of its own lockdown measures (having chosen the sledgehammer approach, similar to many other nations, despite the standout success of the much less costly Swedish approach, which has refrained from lockdown and masks and has performed near the same as most other European countries during the pandemic, with its ICU and mortality numbers having now dropped to near nothing). AUDUSD dipped to a 0.7184 low, which is nearly 60 pips below yesterday’s peak.

Elsewhere, EURUSD edged out a new 27-month high at 1.1917, and Cable a five-month peak at 1.3182. USDJPY idled in the mid 105.00s, above yesterday’s six-day low at 105.32. USDCAD settled above the six-month low seen yesterday at 1.3231. Front-month USOIL crude futures settled in the lower $42.00s, below Wednesday’s five-month peak at $43.52.

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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Date : 7th August 2020.

FX Update – Ahead of NFP, USD finds a bid.

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The narrow trade-weighted USDIndex (DXY) posted a two-day high at 93.16, extending the rebound from the 27-month low seen yesterday at 92.53. EURUSD concurrently retreated to a 1.1819 low, which is a pip shy of yesterday’s low and 2 pips shy of making it a big figure correction from yesterday’s 27-month peak. Cable posted a two-day low at 1.3098, drawing back from the 1.3187 five-month peak seen Thursday following the warily upbeat BoE outlook. USDJPY continued to ply a narrow range (less than 15 pips) around the 105.50 mark. Both the Aussie and Kiwi Dollars corrected moderately as the US currency firmed. AUDUSD, after first edging out a high at 0.7243, which matches Wednesday’s 18-month peak, ebbed to a low at 0.7196. USDCAD lifted to a three-day high at 1.3372.

Front-month USOil futures were soft for a second day, maintaining sub-$42.00 levels after posting a five-month high earlier in the week at $42.52. Gold prices corrected below $2,050.00 after printing a fresh nominal record high at $2,077.85. The ascent of gold has been a reflection of investor concerns over the risk of there being an eventual pop in inflation as a consequence of massive global fiscal stimulus efforts and massive global monetary uber-accommodation, although there has been scant sign of this happening thus far, with disinflation remaining in force and with much of the US yield curve and other sovereign benchmark yields either at or near record lows. In the mix is speculation that the Fed, and possibly other major central banks, may be amid a strategic shift to allow higher inflation.

The US Department of Labor’s weekly initial jobless claims will be THE key data release from the US later today, while labor market reports from Canada and the United States will be closely watched by market participants. The median forecast of economists polled by Reuters is for the Non-Farm Payroll to rise by 1,600,000, following the big miss in ADP number of 167,000 on Wednesday and the better than expected Weekly Claims yesterday of 1,186,000 compared to expectations of 1,400,000. The range in the Reuters poll estimates varies from -280,000 to 3,500,000. On the other hand, Canada is expected to add 400,000 jobs with the Unemployment Rate slumping lower to 11% from 12.3%.

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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Date : 10 August 2020.

Events to Look Out for This Week.


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As the month of August began,uncertainties both fresh and familiar keep challenging the markets, driving volatility in the stock market and pushing bond rates to record lows. The worries over the second wave of the viral pandemic, US-China frictions, the government’s inability to pass a new US stimulus bill and the whatever-it-takes policy commitments from the core central banks all expected to hold in the week ahead as well.
Have a look at the most important events of the coming days in our usual weekly publication.

Monday – 10 August 2020

 

  • Consumer Price Index (CNY, GMT 01:30) – The July Chinese CPI is expected to have improved on a monthly basis, with higher outcome at 0.2% m/m from -0.1% m/m

Tuesday – 11 August 2020
 

  • Average Earnings (GBP, GMT 08:30) – Average Earnings excluding bonus are expected to have grown by 0.4% in June from 0.7%. The ILO unemployment rate is expected to be unchanged at 3.9%.
  • Economic Sentiment (EUR, GMT 09:00) – German August ZEW economic sentiment is seen to have inclined at 62.4 compared to 59.3 in July.
  • Producer Price Index (USD, GMT 12:30) – The headline CPI for PPI in July is expected with a 0.4% gain with a 0.1% core price increase. As expected readings would result in a rise for the y/y headline PPI metric to -0.7% from -0.8% in June. The y/y core reading is assumed to remain in the 0.2%-0.5% area over the near future, with the downward hit from reduced aggregate demand proving greater than the boost for prices from supply disruptions, though supply constraints for some sectors should prove increasingly important as we pass through Q3.

Wednesday – 12 August 2020
 

  • Interest Rate Decision & Policy Report (NZD, GMT 02:00) – The Reserve Bank of New Zealand (RBNZ) is widely expected to keep the OCR (Official Cash Rate) at the current record low 0.25%. The OCR is the means by which the RBNZ manages a dovish monetary policy for the New Zealand economy, by lending overnight cash at 25 basis points above the OCR, and receiving deposits and paying interest at 25 basis points below the OCR. The bank expected to expand QE, when the Bank’s bimonthly monetary policy statement and press conference are also scheduled, since last time it stressed a willingness to take further stimulus measures if necessary while noting persisting downside risks to the economy, adding that currency strength remains a negative for NZ exporters.
  • Gross Domestic Product (GBP, GMT 06:00) – GDP is the economy’s most important figure. The preliminary Q2 GDP is expected to slightly improved at -1.8% q/q however it remains contracted in a quarterly and yearly basis.
  • Consumer Price Index (USD, GMT 12:30) – The headline CPI for July is expected at a 0.3% July and with a 0.1% core price rate, following June figures of 0.6% for the headline and 0.2% for the core. The headline will be boosted by an estimated 5% July increase for CPI gasoline prices. As-expected July figures would result in a headline y/y increase of 0.7%, up from 0.6% in June.

Thursday – 13 August 2020
 

  • Employment Data (AUD, GMT 01:30) – Both the unemployment rate and the employment change are expected to have grown in July, at 7.8% m/m and 394.2K respectively.
  • Harmonized Index of Consumer Prices (EUR, GMT 06:00) – The German HICP inflation for July is anticipated flat.

Friday – 14 August 2020
 

  • Retail Sales (CNY, GMT 02:00) – Following the -1.8% m/m contraction in China retail sales in June, they are expected to rise slightly by 0.3% in July.
  • Gross Domestic Product (EUR, GMT 09:00) – The preliminary Q2 GDP s.a. is expected to remain contracted at -15.0%y/y and -12.1% q/, with national GDP rates varying pretty much along the lines of virus developments and depending and the extend of lockdown measures. The key question for the future is when the initial rebound will be, but if that can be sustained and broadened into a lasting recovery even when governments and ECB start to reign in their very generous support. The agreement on an EU wide stimulus package has helped to bolster confidence in the project, but it remains to be seen whether the package really is sufficient to strengthen long term growth in the Eurozone.
  • Retail Sales (USD, GMT 12:30) – July increases of 1.0% for headline retail sales is expected and 0.8% for the ex-auto figure, following June increases of 7.5% for the headline and 7.3% ex-autos. We expect a 5% increase for the CPI gasoline index, and rising sales volume as well should allow a 5% service station sales rebound as well. Real consumer spending is expected to contract at a rate of -33.2% in Q2 before an assumed 33% bounce in Q3.
  • Michigan Consumer Sentiment Index (USD, GMT 14:00) – The August preliminary Michigan sentiment reading is forecast at 79.0, from 72.5 in the final July reading.

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 : 13th August 2020.

FX Update – August 13 – Weaker Dollar & Stronger Sterling.

[IMG]

The Dollar is down for a second day, with the narrow trade-weighted USDIndex printing a six-day low at 93.08 to nearly fully unwind the gains seen in the wake of last Friday’s US July jobs report, when we printed an eight-day high at 93.87.

Some market narratives have been attributing the Dollar’s ebb as being a return of the currency’s inverse correlation with stock market direction, along with the perception that the Fed has strategically dropped its concern about inflation risk, which has driven real US yields into negative territory. These factors appear to be outweighing the improvement in the US economy and downward trend in new coronavirus cases. As for Washington’s tensions with Beijing, this hasn’t been much of a concern for Wall Street, with most onlookers anticipating this weekend’s meetings to review progress on the Phase 1 trade deal will go well, even though China has been lagging behind in its purchases of US farm and energy goods.

Among the main Dollar pairings, EURUSD climbed to a six-day high at 1.1838, putting the 27-month high seen last Thursday at 1.1917 back in the scopes. USDJPY extended a moderate correction from yesterday’s three-week high at 107.03, posting a low at 106.57. The Yen was more mixed against other currencies, with EURJPY remaining buoyant, just off the 16-month high that was pegged yesterday at 126.23, while AUDJPY traded softer after the cross peaked at a three-week high yesterday. The Nikkei 225 hit a six-month high, which followed a strong close on Wall Street yesterday, with the S&P 500 finishing just a whisker below a record closing peak. European stocks have opened lower with GER30 holding over 13,000 at 13,025 and the UK100 trades down around 6,200. AUDUSD edged out a two-day peak at 0.7188. Australian July employment data showed a forecast-smashing 114,700 rise in the headline, while the June figure was revised higher, though lockdowns across the country are now blighting the immediate outlook. USDCAD settled just above Wednesday’s six-month low at 1.3227.

[IMG]

Sterling is trading mixed, edging out a two-day high at 1.3092 against the Dollar, while also gaining on the Yen and Aussie Dollar, but holding steady-to-softer versus the Euro and some other currencies. Yesterday’s preliminary UK Q2 GDP data showed a gargantuan 20.4% q/q contraction to confirm the technical definition of recession following Q1’s 2.2% shrink. The data wasn’t a surprise given the lockdown that was in place to varying degrees throughout the quarter. June GDP rose by 8.7% m/m, however, with June production data showing a robust rebound and beating expectations in the main headline readings, while high frequency data and a myriad of anecdotal evidence point to a strong rebound in the current quarter. The government’s furlough scheme has greatly limited the impact on the employment market. We have been talking down the Pound, to a degree, having seen limited scope for the currency to sustain its recent patch of outperformance. The BoE last week delivered a warily-upbeat outlook, though with localized lockdowns and most media doing their utmost to maintain maximum fear of a second wave of coronavirus infections, we take a circumspect view of the outlook over the coming months, anticipating a plateauing in economic rebound momentum. Manchester, Preston, Bradford and Aberdeen are back in lockdown and there is a number of new travel restrictions with other countries. The furlough scheme will end in late October, which is likely to trigger a wave of job losses, particularly in the airline, retail and hospitality sectors.

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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Date : 14th August 2020.

FX Update – August 14 – USD Consolidates at lows.

[IMG]

EURUSD, H4
The main currencies have settled in narrow ranges, with the Dollar consolidating above yesterday’s lows after a two-day decline. The USDIndex (DXY) has steadied in the lower 93.0s, above yesterday’s one-week low at 92.93. EURUSD has concurrently reached a stasis in the lower 1.1800s, below Thursday’s one-week peak at 1.1865. The pair has been in a strong uptrend since early May, producing last week’s 27-month high at 1.1917, though upside momentum has flagged over the last two weeks. The advent of the 750 bln Euro recovery fund and the fact that Europe has come through the pandemic ahead of the US have been underpinning EURUSD, along with the perception that the Fed is strategically being less attentive to inflation risks, which pushed real Treasury yields deep into negative territory. This dynamic looks to be shifting in certain aspects, which may curtail EURUSD’s uptrend. New coronavirus cases are dropping in sun states as community immunity builds up, having already done so in other parts of the US, while high frequency data and the July employment report are evidencing rebounding economic activity.

[IMG]

Elsewhere today, USDJPY has been plying a narrow range below yesterday’s three-week high at 107.06. Cable has settled near 1.3050, holding well within the broadly sideways range that’s been seen over the last week. Ditto for AUD-USD, which has been making time near the 0.7150 mark.

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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Events to Look Out for This Week.
 
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As the month of August moves into week 3, uncertainties both fresh and familiar keep challenging the markets, driving volatility in the bond market as rates bounce off record lows and stock markets consolidate. The cooling worries over the second wave of the viral pandemic, and continuing US-China frictions, even as talks are due to resume and the impasse over a new US stimulus bill all expected to hold in the week ahead.
Have a look at the most important events of the coming days in our usual weekly publication.

Tuesday – 18 August 2020

Meeting Minutes (AUD, GMT 01:30)
 – No surprises from the RBA in their last meeting are expected, the cautious “do all we can” prose is likely to continue. Lowe talked of interest rate hikes not being on the cards for at least 3 years this week.
  • Building Permits & Housing Starts (USD, GMT 12:30) – Permits are expected to show a rise to 1.30 million form 1.258 million last month whilst Starts are expected to decline from 1.186 million to 1.70 million, overall this would still show a resilient US housing market.
Wednesday – 19 August 2020
 
  • FOMC Minutes (USD, GMT 18:00) – The Federal Open Market Committee minutes ability to shock have lost the power they once had, however, they remain the key documented account of the discussions that take place (on-line) between the decision makers of the FED. Watch for the tone of the talk of recovery, any reference to negative interest rates (even a reference would be something), the spectre of inflation and the on-going issues with the yield curve.
  • Consumer Price Index (GBP, GMT 06:00) – The headline CPI for July is expected at a 0.6% July (y/y) and with a 1.4% core price rate, following June figures of 0.6% for the headline and 1.1% for the core.
  • OPEC – JMMC Meeting (All Day)
Thursday – 20 August 2020
 
  • US Weekly Claims (USD, GMT 12:30) – Following last week’s final breach of 1.0 million this week claims data will be eagerly watched to see if the decline continues.
  • German Consumer Confidence & PPI Data (EUR, GMT 06:00) – The German PPI & Consumer confidence will provide another key indicator to the recovery in German sentiment and prices. Last week the COVID cases showed a worryingly geographically widespread spike.
Friday – 21 August 2020
 
  • Markit PMI Composite (EUR, GMT 07:30) – expected to show a decline to 50.3 from 54.9 last time
  • UK Markit Services PMI (GBP GMT 08:30) – expected to show a decline from last month’s 56.5 to 55.9.
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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    • In general I agree. But how can we explain stagnation in those econimic areas where public policies are more proactive?
    • NASDAQ 100 PRICE ANALYSIS — DECEMBER 1 The Nasdaq 100 (NDX) has rounded off November on a positive note, after the month up by more than 11%. This surge was mainly stimulated by the recently-concluded US Presidential election and the discovery of potential COVID-19 vaccines. These themes were the major dominating fundamental factors through November, as hopes for things to go back to normal (pre-covid) ignited some sectoral rotation. The rotation occurred mainly between work-from-home stocks and traditional businesses, which helped indexes like the Dow Jones (DJIA) and Russell 2000 take the lead from the Nasdaq 100. Nonetheless, the NDX remains in a favorable position as markets enter the close of 2020. That said, stimulus hopes and potential political stalemate in Washington over most of President-elect Biden’s policies could cause the Federal Reserve to maintain its dovish outlook, which would be very beneficial for NDX bulls. That said, it is likely that there are tailwinds present in the equity market ahead of December and 2021. However, there’s the possibility that the NDX could fall into consolidation before we see a continuation to the upside, as the US Presidential election-induced volatility has now been weaned out of the market. Nasdaq 100 (NDX) Value Forecast — December 1 NDX Major Bias: Bullish Supply Levels: 12300, 12370, and 12439. Demand Levels: 12220, 12000, and 11890. The NDX is on an aggressive bullish rally as it inches closer to its all-time high at 12439. At the moment, the 12220 support will likely prevent any sustained decline given the confluence of indicators (ascending trendline and 12220 crucial support) at that level. We expect the NDX to break its previous all-time high and record new peaks in the coming days before consolidation likely sets in.   Source: https://learn2.trade 
    • GERMANY 30 (DE30EUR) IS IN A DOWNWARD MOVE, MAY FALL TO LEVEL 13153.70 Key Resistance Zones: 13600, 14000, 14400 Key Support Zones: 11200, 10800, 10400 Germany 30 (DE30EUR) Long-term Trend: Bullish The index is an upward move but it is facing resistance at level 13200. It must have reached bullish exhaustion as it faces rejection. On November 10, a retraced candle body tested the 88.6% Fibonacci retracement. This indicates that the index will rise to level 1.1129 and perhaps reversed. DE30EUR – Daily Chart Daily Chart Indicators Reading: Presently, the SMAs are sloping upward indicating the uptrend. The index is at level 64 of the Relative Strength Index period 14. This indicates that it is in the uptrend zone and above the centerline 50. Germany 30 (DE30EUR) Medium-term Trend: Bullish On the 4- hour chart, the index is in a downward move. On November 30 downtrend, a retraced candle body tested the 61.8% Fibonacci retracement level. This implies that the index will fall and reach level 1.618 Fibonacci extension. DE30EUR – 2 Hour Chart 4-hour Chart Indicators Reading The market is below the 80% range of the daily stochastic. It indicates that the index is in a bearish momentum. Meanwhile, the 50-day SMA and the 21-day SMA are sloping upward indicating the uptrend. General Outlook for Germany 30 (DE30EUR) DE30EUR is likely to take a downward movement. The index has been trading in the overbought region. Sellers may emerge to push prices down. However, in a trending market, the overbought condition may not hold. That is the pair will continue to rise. Source: https://learn2.trade 
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Core inflation meanwhile declined to 0.2% y/y and while special factors are playing a role, officials clearly are increasingly concerned that the prolonged period of underinflation and now negative headline rates will prompt a more lasting shift in price expectations, which against the background of a sizeable output gap and rising unemployment lifts the risk of real deflation down the line. Gross Domestic Product (CAD, GMT 13:30) – Canada GDP results for the Q3 are seen to be slowing down, at a yearly rate of -39.6% compared to 38.7% last month. ISM Manufacturing PMI (USD, GMT 15:00) – US manufacturing PMI is expected to fall to 57.5 in November from a 2-year high of 59.3 in October. We’re seeing a modest November pull-back in available producer sentiment measures to still-elevated levels, as output is continuing to rise in the face of plunging inventories and rising sales, with limited headwinds from delayed stimulus and continued virus outbreaks. 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Average hourly earnings are assumed to rise 0.1% in November, with a headwind from further unwinds of the April distortion from the concentration of layoffs in low-wage categories slows. This translates to a y/y gain of 4.2%, down from 4.5%. We expect the payroll rebound to continue through year-end, though the climb is leaving a net drop for employment for 2020 overall. Employment Change & Unemployment Rate (CAD, GMT 13:30) – Canadian data coincides with the USA release today with dire expectations for a slight deduction in Unemployment to 8.8% from 8.9% last month and a rise from the 83.6 in October for employment, to 100k. 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.
    • Date : 27th November 2020.FX Update – November 27 – Sterling in FocusGBPUSD, H1Narrow ranges have been prevailing in risk-cautious trading. The USDIndex settled around the 92.00 level, above yesterday’s 12-week low at 91.84. EURUSD remained buoyant but off from the 12-day peak seen yesterday at 1.1942. Cable also held within its Thursday range. USDJPY ebbed to a four-day low at 103.91. The Yen was concurrently steady versus the Euro and the Pound, but posted respective two- and four-day lows against the Australian and Canadian Dollars. AUDUSD ticked fractionally higher, which was still sufficient to lift the pair into 12-week high terrain above 0.7380. NZDUSD posted a new 29-month peak at 0.7030. USDCAD remained heavy but just above recent 17-day lows. Bitcoin, which performed strongly this year on the back of dollar liquidity, found a toehold, but remained over 12% down on its recent highs.US markets will reopen after yesterday’s Thanksgiving holiday, but market conditions will remain on the thin side. President Trump said that he will leave the White House if the Electoral College votes for Biden, which may be as close to formally conceding the election as he will go. A sharp focus remains on EU and UK talks, with a face-to-face round reportedly taking place in London over the weekend. There are now reports that the EU parliament might convene as late as December 28 to ratify a deal, if necessary.The spectre of a no-deal hangs over proceedings, though the consensus, as judged by the ongoing stability of the Pound, remains for a narrow deal to be reached.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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