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Earlier on Thursday, OPEC and its allies appeared to have an agreement…

Earlier on Thursday, OPEC and its allies appeared to have an agreement in principle to boost output by 400,000 barrels a day each month from August to December

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Market Focus

All three major US stock indexes ended the session in positive territory. The Dow Jones Industrial Average added 131.02 points, or 0.38%, to 34,633.53, the S&P 500 put on 22.44 points, or 0.52%, to 4,319.94 and the Nasdaq Composite added 18.42 points, or 0.13%, to 14,522.38.

Earlier on Thursday, the Organization of Petroleum Exporting Countries and its allies appeared to have an agreement in principle to boost output by 400,000 barrels a day each month from August to December. It would also have extended the duration of the broader OPEC+ accord, setting the final expiry of the cuts in December 2022 instead of April.

That preliminary agreement was upended by the United Arab Emirates, which said it will block the deal until the baseline for its cuts is adjusted, effectively raising its production quota, delegates said.

“Any request to adjust the production quota would be like opening Pandora’s box,” said Giovanni Staunovo, a commodity analyst at UBS Group AG. That could add up to a production increase of about 700,000 barrels a day for the UAE alone, and “other OPEC+ states might also request an adjustment.”

The standoff between the United Arab Emirates and the rest of the cartel could ultimately mean that OPEC+ won’t increase production at all, according to a delegate. Without a deal, it would fall back on existing terms that call for output to remain unchanged until April 2022. That would squeeze an already tight market, risking an inflationary price spike.

The dramatic turn of events leaves the market in limbo — just as inflationary pressures are fixating investors with oil above $75. It also tarnishes the cartel’s carefully reconstructed reputation, raising the specter of the destructive Saudi-Russia price war of last year.

Main Pairs Movement

The US dollar has started the month on a solid footing after closing June with a total 2.81% gain, being the best month in four and a half years. On Thursday, ahead of the highly anticipated Nonfarm Payrolls report, the dollar hit three-month highs but traded within narrow ranges as traders get set for more clues on whether the Federal Reserve will start to reduce monetary stimulus sooner rather than later. The U.S. dollar index rose to 92.601, the highest since early April.

The euro pair fell to 1.1837 as a fresh low amid upbeat domestic data, which Eurostat announcing that the Unemployment Rate declined to 7.9% in May, compared to analysts’ estimate of 8%. Additionally, Markit Manufacturing PMI edged higher to 63.4 in June and surpassed the market expectation of 63.1.

Sterling dropped on Thursday after Bank of England Governor Andrew Bailey warned against over-reaction to rising inflation in Britain. Cable slipped in morning trading to $1.3752, its lowest level since April.

Both antipodean pairs breached their critical support line and now trading at worse prices. NZD/USD dived below 0.7000, while AUD/USD violated the 0.7500 support line and trades at 0.7470 as of writing; the loonie pair ended the day at 1.2430.

Gold priced higher despite yet another surge in the US dollar, sitting at $1,776.30 in the close; Crude oil price headed to the north supported by demand optimism and increased output. WTI was at $75.00 and higher by 2.06% at the end of the day, while Brent bounced off the yearly high at $76.71 and closed with a modest gain at $75.58.

For the day ahead, it is all about the highly anticipated US Nonfarm Payrolls.

Technical Analysis

USDJPY (4- Hour Chart)

USDJPY advances further north and stands above 111.00 yardsticks ahead of Friday’s US Nonfarm Payrolls data. From the technical aspect, the break of the previous day’s resistance at 111.12 confirms USDJPY’s bullish outlook on the 4- hour chart. At the moment, further upside move remains optimistic on the cards amidst the current atmosphere. The pair has traded to the highest level since March 2020. The MACD signals that the pair is on the way to sustain its positive move; however, the pair might face an adjustment before heading toward the next immediate hurdle at 111.63 as the RSI reading is above 70, in the overbought territory.

Resistance: 111.63

Support: 110.91, 110.46, 110.10

EURUSD (4- Hour Chart)

EURUSD hovers around its support level at 1.1837 amid US mixed economic data today with upbeat US jobless claims and worst-than-estimate ISM Manufacturing PMI. From the technical viewpoint, EURUSD pauses its descending momentum, bouncing off the lows to push the RSI away from the 30 levels, the oversold condition on the 4- hour chart; however, the downside momentum of the pair does not end in the outlook since pushing the RSI above 30 will allow for more falls afterward. Moreover, momentum remains downside due to the pair continues to trade below the 50, 100, and 200 SMAs. On the downside, if the fall resumes, then it is expected to the pair head toward the next support at 1.1704, the lowest level since March.

Resistance: 1.1919, 1.1985, 1.2052

Support: 1.1837, 1.1704 

GBPUSD (4- Hour Chart)

GBPUSD tumbles to fresh monthly lows under the 1.3770 level during the American session after the comments from BOE’s Andrew Bailey. From the technical perspective, the earlier break of the support at 1.3793 has re-confirmed GBPUSD’s bearish trend, which signals that downside momentum remains robust on the 4- hour chart. It is expected to see the pair continue descending as the RSI is well above 30 readings, outside of the oversold territory, giving the pair rooms to extend further south. In the meantime, remaining to trade below the 50, 100, and 200 SMAs also suggests that the pair is under pressured. On the downside, the pair is expected to head toward its next support level at 1.3675, the lowest point since March.

Resistance: 1.3793, 1.4007

Support: 1.3675

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The US dollar index appreciated to the highest level yet since it…

The US dollar index appreciated to the highest level yet since it took off from 90.441 following the Federal Reserve’s surprise hawkish hold on 16 June

20210701
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Market Focus

Stocks were mixed on Wednesday, with the S&P 500 gaining for a fifth straight session to end the day at yet another record closing high. Dow Jones surged 0.61% to 34502, but Nasdaq declined 0.17% due to the poor performance of its main components. Look back on the first half of 2021, S&P 500 has increased by about 14.4%, Nasdaq by 12.5%, and Dow Jones by 12.7%.

Some of the biggest names in the hedge fund industry are wading deeper into crypto. Steve Cohen’s Point72 Asset Management is seeking to hire a head of cryptocurrencies, while the family office of billionaire George Soros has started trading Bitcoin, according to people familiar with the matter. Spokespeople for the firms declined to comment.

The moves, which were both reported earlier by TheStreet.com, come as a growing number of marquee hedge funds have begun to dabble in digital assets. Point72 rival Millennium Management has been active in crypto-related futures and exchange-traded funds, while Brevan Howard Asset Management and macro trader Paul Tudor Jones have begun investing in crypto. In March, hedge fund manager Dan Loeb said he was doing a “deep dive” into crypto.

“We are exploring opportunities around blockchain technology and its transformative and disruptive capabilities,” Point72 said in a May letter to investors seen by Bloomberg. “We would be remiss to ignore a now $2 trillion cryptocurrency market.”

In a March interview with Bloomberg Television’s Erik Schatzker, Dawn Fitzpatrick, who oversees Soros Fund Management, said that Bitcoin was interesting and that the firm had been making investments into crypto infrastructures, such as exchanges, asset managers, and custodians.

“There’s a real fear of debasing fiat currencies” that’s driving demand for crypto, Fitzpatrick said in the interview. “Bitcoin, I don’t think it’s a currency — I think it’s a commodity” that is easily stored and transferable, with a finite supply. She declined to say whether she owned any Bitcoin.

Main Pairs Movement

The US dollar index appreciated to the highest level yet since it took off from 90.441 following the Federal Reserve’s surprise hawkish hold on 16 June. Printing a high of 92.448, DXY traded at its best level since 8 April earlier this year.

A mix of strong US data, delta covid flows, hawkish Fed speakers, and anticipation of a healthy Nonfarm Payrolls report on Friday helped the greenback maintain its strong narrative in financial markets on Wednesday. Fed’s Robert Kaplan reaffirmed his hawkish stance and said, ”I’d want to taper sooner than the end of the year.”

The euro pair extended its losses sub-1.1900 to test the June lows in the 1.1840 price zone. Aussie fell further to break the 0.7500 level to score a fresh low of 0.7492, while the loonie pair continued to test bearish commitments through 1.2400 again in the New York session to print a high of 1.2421, recovering from the London sell-off.

Cable settled around 1.3830 and remains undermined by Brexit jitters related to the Northern Ireland Protocol. Sterling is also facing uncertainty over the spread of the Delta variant of COVID-19 in the UK. Earlier this month forced the government to delay full reopening.

Gold recovered from the fresh two-month lows in the $1,750s and tallied a gain of over 0.5% on the day, printing a high of $1,774.45 before ending by the closing bell near $1,770. WTI crude oil price rose from near the day’s lows of $72.84 on a big draw on US inventories ahead of the highly anticipated OPEC+ meeting with a spot near to $73.51 by the close of play on Wall Street. Meanwhile, Brent’s price moved roughly along with the WTI’s, closed the day at $74.64.

Technical Analysis

USDJPY (4- Hour Chart)

USDJPY climbs to daily highs above 110.70 level during the American session amid better-than-expected ADP data. After spending the majority of the week in a narrow range, the pair regains traction today, reaching as high as 111.09 at the time of writing. On the 4- hour chart, the intraday bias turns bullish as the pair trades within the ascending channel and it has reached the top of the ascending trend line, signaling that bullish momentum has been resumed. Additionally, the pair have officially traded above the 20 and the 50 simple moving averages, suggesting a bullish mode. From the technical indicator, the RSI has not reached the overbought territory, meaning that the pair still has rooms to extend further north before an adjustment. On the upside, if the pair ends up breaching its resistance of 111.12, then it will open up an accelerated path for bulls.

Resistance: 111.12

Support: 110.51, 110.14, 109.84

EURUSD (4- Hour Chart)

EURUSD declines below 1.1900 after the US ADP jobs figures have come with 692K, beating the estimates. From the technical aspect, EURUSD remains bearish, attempting to contest its current resistance at 1.1837 at the time of writing. A successful break of the resistance at 1.1837 will lead the pair to the next level at 1.1704, which is the lowest since April. On the support side, if the pair can sustain and settle above 1.1837, it will give a chance to move toward 1.1919. In the short- run, bears are expected to pause a bit as the RSI reading has reached below 30, an oversold territory, which allows the pair to bounce back. However, in a bigger outlook, the pair remains under pressure.

Resistance: 1.1919, 1.1985, 1.2052

Support: 1.1837, 1.1704 

GBPUSD (4- Hour Chart)

GBPUSD slides toward 1.3800 level as the US dollar edges higher on US upbeat ADP data. From the technical perspective, the intraday bias of the pair remains bearish as it trades well below the 50 and 100 simple moving averages. The RSI has not yet reached the oversold territory, giving bears more room to decline further and heading toward its immediate support of 1.3787. On the downside, a successful test of the support at 1.3787 will open the path to the next support at11111. On the upside, if the pair can recover above 1.3896, then it will head to challenge the next resistance at 1.3963 and 1.4017.

Resistance: 1.3896, 1.3963, 1.4017, 1.4072

Support: 1.3787

20210701
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A divided U.S. Supreme Court refused to lift the federal moratorium on…

A divided U.S. Supreme Court refused to lift the federal moratorium on evictions during the Covid-19 outbreak, leaving the ban in place until the end of July

20210630
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Market Focus

The three major indexes traded mixed Tuesday afternoon after gaining earlier in the day, with traders looking for fresh catalysts to rally beyond current record levels. The information technology and consumer discretionary sectors outperformed in the S&P 500. The tech-led session kept the Nasdaq in slightly positive territory (+0.19%). Dow Jones was little changed (+0.03%) as more than 1% drops in shares of Intel, Disney, and Boeing offset gains in other components including Nike, Home Depot, and Apple.

A divided U.S. Supreme Court refused to lift the federal moratorium on evictions during the Covid-19 outbreak, leaving the ban in place until the end of July.

Voting 5-4, the justices rejected calls by landlords and real-estate trade associations from Alabama and Georgia to block the moratorium while their challenge goes forward. They contend the Centers for Disease Control and Prevention exceeded its authority by imposing the spread of the coronavirus.

Chief Justice John Roberts and Justice Brett Kavanaugh joined the court’s three liberals in the majority. Kavanaugh said he was doing so because the moratorium is set to expire on July 31.

The ban applies to tenants who, if evicted, would have “no other available housing options.” The CDC and President Joe Biden’s administration say the moratorium is geared toward protecting tenants who would be forced to live in close quarters elsewhere or become homeless and dependent on shelters.

Main Pairs Movement

The greenback appreciated against most major rivals as the dollar index reached a five-day high above 92.00, especially against high-yielding currencies. There was no obvious catalyst for the gains as the greenback retreated in the final trading session of the day, despite better than anticipated US data.

The euro pair hovered below 1.1900, awaiting the upcoming inflation figures; cable settled around 1.3840, undermined by Brexit jitters related to the Northern Ireland Protocol. Aussie fell toward the 0.7500 level, while the loonie pair flirts with 1.2400. The American currency strength and the modest performance of Wall Street weighed on commodity-linked currencies.

Gold plummeted to a fresh two-month low of $1,750.60 a troy ounce, bouncing ahead of the close to $1,761. Crude oil prices were mixed, as WTI surged around 1%, settling at $73.40 a barrel, and Brent almost declined for another day, closing with a tiny gain at $74.63.

“Unemployment rate would have to drop fairly substantially, or inflation would have to stay high, to have a 2022 rate hike,” Fed Governor Christopher Waller said on Tuesday’s Bloomberg TV Interview. “If you think you may need to raise rates by end-2022 or early 2023, you need to get tapering done before then.”

Though Fed’s Waller adds to the market’s anxiety over inflation and rate-hike, major pairs still trade at familiar levels, seemingly unaffected by the press time. The reason could be traced from the cautious sentiment ahead of the day’s key data, namely China PMI and US ADP Employment Change.

Technical Analysis

USDJPY (4- Hour Chart)

USDJPY loses its traction around 110.5 level during the American session. Even though the pair still trades within the overall ascending trend, it stages a technical correction. Similar to the previous day, USDJPY remains neutral for its intraday bias. The further rally will resume with its resistance of 111.12 intact. On the downside, the break of 110.51 will turn the pair’s bias back to the downside for 110.14, turning the pair to bearish as it will breach the ascending trend line. From the technical indicator’s view of point, the pair is bearish in the near- term as the MACD is turning down, lending supports to bears; the RSI is neutral, lacking directional strength as of now.

Resistance: 111.12

Support: 110.51, 110.14, 109.84

EURUSD (4- Hour Chart)

EURUSD remains pressured under the 1.1900 level as the greenback gains strength. From the technical aspect, EURUSD is poised to extend its decline, heading toward its support of 1.1837. On the 4- hour chart, the outlook of the pair is bearish as it trades below the 20 simple moving average as well as the 50 SMA, stating that the pair is under pressured. At the same time, the downside pressure is also supported by the negative MACD. If the pair falls below the previous low on the 22nd of June, then it will accelerate its slide within a negative level, favoring a challenge against 1.1837.

Resistance: 1.1919, 1.1985, 1.2052

Support: 1.1837, 1.1704 

GBPUSD (4- Hour Chart)

GBPUSD slips below 1.3850, reaching the weekly low as the greenback gains ground across the board. On the 4- hour chart, GBPUSD remains bearish as it has been unable to recapture the 20 and the 50 SMAs, experiencing the downside momentum. Additionally, the RSI is currently above the 30 readings, thus far from oversold conditions, allowing the pair for more declines; the MACD sustains its negative mode, lending supports to bears. At the time of writing, GBPUSD is expected to extend its fall toward its next support of 1.3787 in the near- term.

Resistance: 1.3896, 1.3963, 1.4017, 1.4072

Support: 1.3787

20210630
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