Forex News Analysis by LiteForex

Morning Market Review

EUR/USD

EUR shows a slight increase against USD during today's Asian session, correcting after an active decline yesterday, which was triggered by a new wave of growth in investor demand for safe assets. In turn, the published macroeconomic statistics from Germany and the eurozone turned out to be quite optimistic. Germany's consumer price index in May grew by 0.6% YoY, while the harmonized CPI added 0.5% YoY, which fully coincided with market expectations. ZEW Economic Sentiment Index in June rose sharply from 51 to 63.4 points, exceeding the forecast for growth to 60 points. The index of economic sentiment in the eurozone in June also increased from 46 to 58.6 points (ZEW survey data). European investors today are focused on the statistics on consumer inflation in the euro area in May. In addition, the market is awaiting speeches by ECB representatives Yves Mersch and Luis de Guindos.

GBP/USD

GBP today shows flat trading against USD, consolidating after yesterday's "bearish" correction. Pressure on the instrument was exerted by the growing USD, which again became popular amid alarming concerns about the second wave of the COVID-19 epidemic, which intensified yesterday when China announced that it would close all schools in Beijing due to a another surge in infections. Macroeconomic statistics from the UK published yesterday turned out to be mixed. Investors were optimistic about the unemployment rate from ILO, which in April remained at the previous level of 3.9% 3MoY with a forecast of growth of up to 4.5% 3MoY. However, investors understand that the calculation period matters and the real situation in the UK labor market is noticeably worse. Average Earnings Including Bonus slowed down from +2.3% 3MoY to +1.0% 3MoY in April, which also turned out to be worse than market expectations of +1.4% 3MoY.

AUD/USD

AUD shows ambiguous trading dynamics during today's Asian session, consolidating near 0.6870. The instrument weakened noticeably amid growing fears about a new wave of the COVID-19 epidemic. Morbidity statistics in individual countries show growth, and China, for example, has decided to close all schools in Beijing because of another surge in infections. Additional support for USD was provided by the comments of the head of the US Federal Reserve Jerome Powell, who said that the US economy may have reached its bottom and is beginning a period of active recovery. Today's macroeconomic statistics released in Australia did not have any noticeable effect on the movement of the instrument. HIA New Home Sales in April decreased by 4.2% MoM after falling by 1.1% MoM last month.

USD/JPY

USD is showing flat dynamics against JPY during today's Asian session, retreating from local highs since June 10. Both USD and JPY received support amid alarming news of the closure of schools in Beijing due to an outbreak of coronavirus incidence, which increased the risks of a second wave of the epidemic in the world. Additional support to USD was provided on Tuesday by macroeconomic statistics in the US. Retail Sales in May showed strong growth of 17.7% MoM after a decline of 14.7% MoM in April. Analysts had expected growth of 8% MoM. Industrial Production in May grew by 1.4% MoM after a record decline of 12.5% MoM last month. Analysts had expected growth rate at 2.9% MoM.

XAU/USD

Gold prices change insignificantly; however, they continue to be kept close to record highs, as the market situation remains ambiguous. Significant support for the instrument is provided by rising concerns about the second wave of the coronavirus epidemic, which again could lead to significant restrictions and, as a result, to another economic downturn. In addition, investors prefer gold knowing the details of a new loan assistance program from the Fed. At the same time, yesterday’s speech by the head of the Fed Jerome Powell aroused timid optimism among American investors. Among other things, the official said that the American economy has reached its bottom, and at the moment, an active process of its recovery is beginning.

Morning Market Review

EUR/USD

EUR shows flat dynamics of trading against USD during today's morning session. The instrument is trading near 1.1250, feeling the pressure due to growing alarming market sentiment toward the second wave of the coronavirus epidemic. Demand for USD intensified after reports from China, which was forced to close schools in Beijing, cancel more than 1,000 domestic flights and introduce a three-week quarantine in Heilongjiang, where another outbreak was recorded. The macroeconomic data from the eurozone, published on Wednesday, also added negativity. Consumer Price Index fell by 0.1% MoM in May after rising by 0.3% MoM last month. In annual terms, prices retained the same minimum rate of growth (0.1% YoY). According to April data, the Construction Output volume collapsed by 28.4% YoY after a decrease of 17.5% YoY last month.

GBP/USD

GBP today is trading in both directions paired with USD maintaining a "bearish" momentum formed two days ago. GBP, like many other currencies on the market, has recently yielded to the "safe" USD due to rising fears about a new wave of the COVID-19 epidemic. UK macroeconomic statistics released yesterday only added negative factors to the market, although the reaction of investors has been largely restrained. Inflation in the UK in May dropped from +0.8% YoY to +0.5% YoY, which is likely to push the Bank of England to new actions. Retail Price Index for the same period moved into the negative area, falling by 0.1% MoM, while analysts expected growth by 0.1%. Today, investors are focused on the Bank of England decision on the interest rate. Most experts are confident that the regulator will not change the interest rate, but will increase the volume of the quantitative easing program, which now amounts to 645B pounds.

NZD/USD

NZD shows ambiguous trading against USD during today's Asian session, continuing the development of lateral trend in the short term. Buying activity for the instrument significantly decreased last week, when alarming statistics began to arrive on the market, which may indicate the imminent start of the second wave of the coronavirus epidemic. Geopolitical tensions are also growing. Relations between South Korea and the DPRK escalated during the week, and an armed conflict occurred on the border between China and India, in which dozens people were killed. New Zealand macroeconomic statistics released today also turned out to be negative. According to the results of Q1 2020, New Zealand's GDP decreased by 0.2% YoY after an increase of 1.8% YoY in the previous period. Analysts had expected positive dynamics to remain at +0.3% YoY. On a quarterly basis, New Zealand's economy fell by 1.6% QoQ, with a forecast of a reduction of only 1% QoQ.

USD/JPY

USD is falling against JPY during today's Asian session, continuing to develop the "bearish" momentum that formed the day before. The market is again seeing an increase in investor interest in safe assets amid growing geopolitical tensions and growing risks of a second wave of the coronavirus epidemic. At the same time, USD received some support from data on the US housing market on Wednesday. In May, Housing Starts increased by 0.974M after an increase of 0.934M last month. Building Permits number issued for the same period also increased markedly from 1.066M to 1.22M, which, however, was slightly worse than market expectations. Today, investors are focused on the dynamics of initial and continuing jobless claims in the US.

XAU/USD

Gold prices show flat dynamics of trading against USD during today's Asian session, maintaining a similar trend in the short term. Yesterday, the asset quotes showed an active decline, which was associated with the news about the treatment process of COVID-19. Later, however, the "bears" quickly lost their gains, and the instrument returned to the opening levels amid growing alarming news about the second wave of the epidemic and rising geopolitical risks.

Brent Crude Oil: oil continues growing

Current trend

Brent crude prices continue upward movement amid rising fears of declining demand due to the repeated outbreak of COVID-19 in China.

As China introduces new restrictions, investors fear another wave of falling demand for energy. This week, schools were closed in Beijing and air traffic was stopped, which alerted markets and triggered a surge in asset volatility.

In relative terms of expectations are stock data from the American Petroleum Institute (API) and the Energy Information Agency of the US Department of Energy (EIA). According to API, weekly oil reserves in storage were 3.900M barrels, which is significantly lower than 8.400M barrels last week. According to EIA, oil stocks showed a slight increase of 1.215M barrels, according to the forecasts of a decrease of 0.152M barrels. Excessive oil reserves in Cushing storage continued to decline, amounting to –2.608M barrels against a projected decrease of 0.183M barrels.

Support and resistance

The price of the asset continues to form global upward correction and this week it broke the Fibonacci retracement level of 38.2% out. Today, the growth may continue and new attempts to consolidate above this level may be made. Technical indicators continue to hold the global buy signal: the range of the Alligator indicator EMAs fluctuations is still expanding, and the histogram of the AO oscillator stays in the positive zone.

Resistance levels: 44.80, 51.00.
Support levels: 38.60, 31.00.

USD/JPY: general review

Current trend

The pair is moderately correcting upward from the opening of trading due to a stable retention of the USD Index above the level of 97 points.

At the end of last week, Policy Board of the Bank of Japan Statement was published. The guidelines for the next period have not changed. The interest rate remains at –0.10%, the purchase of ten-year government bonds will continue with a yield of about 0%, the value of purchases will be increased to JPY 80T. Also, Japan's national consumer price index in May amounted to –0.2%, which is slightly worse than the forecast of –0.1%.

There have been no important statistics from the USA that could affect the exchange rate of USD in recent days, and the USD Index continues to be on Friday quotes, above the level of psychological stability at 97 points, at 97.450.

Support and resistance

The pair continues to trade within the correctional formation between the levels of intermediate and basic Fibonacci retracement. Technical indicators continue holding sell signals. The EMA oscillation range expands with a downtrend, and the histogram of the AO oscillator is trading in the negative zone.

Resistance levels: 107.70, 109.10.
Support levels: 106.60, 105.50.

WTI Crude Oil: price continues to rise

Current trend

Oil prices rise slightly near 40.00 amid concerns about the second wave of the COVID-19 pandemic.

It seemed that after the extension of the OPEC+ deal, the black gold market was not in danger, and an early recovery in energy prices could be expected but a new wave of coronavirus was again causing demand to decline. Yesterday, the World Health Organization reported a record increase in the number of infected in the world, the main epicenters of which are the countries of Latin America.

Meanwhile, the spread in the main arbitrage position between Brent Crude Oil and WTI Crude Oil is $2.64, the lowest since the beginning of the year. Such a narrowing indicates the accumulation of a very large position, which, if implemented, will significantly affect the asset quotes.

Support and resistance

The asset continues global correctional growth, and at the end of last week, the price finally fixed above the level of the intermediate correction of 50.0% Fibonacci. Although the global trend indicator Alligator continues to keep a buy signal, the range of EMA fluctuations continues to narrow, and downtrend bars continue to form on the AO oscillator.

Resistance levels: 42.00, 53.00.
Support levels: 35.40, 28.80.

Morning Market Review

United States of America
USD continues weakening against all major currencies included in the USD Index.

USD is declining under the pressure of the tense situation in the country. Mass riots and protests have a negative impact on market conditions. Even positive data on New Home Sales, which in May amounted to 676K against the forecast of 640K, are not able to stop the downtrend. During the day, investors are waiting for the publication of data on price indices and weekly oil inventories, where another reduction is expected.

Eurozone
EUR is strengthening against USD and other major currencies.

Yesterday's data on Manufacturing PMI in Germany in June, which showed an increase to 44.6 points against expectations of 41.5 points, as well as on Services PMI in the eurozone, which also rose to 47.3 points with expectations at 41.0 points, contribute to additional interest in EUR from investors. The main expectations of traders today are associated with the publication of the German IFO Business Climate index for June, which is expected to rise to 85.0 points.

United Kingdom
GBP is strengthening against all major world currencies.

Yesterday turned out to be extremely positive in terms of macroeconomic statistics. Composite PMI in Britain rose to 47.6 points against expectations of 41.0 points. Manufacturing PMI reached 50.1 points against expectations of 45.0 points, while Services PMI rose to 47.0 points, which is much better than the forecast of 40.0 points. The follow-up statement by the Governor of the Bank of England, Andrew Bailey, was also filled with positive rhetoric regarding economic forecasts and the early exit of Britain from the EU.

Japan
JPY is trading in both directions with respect to the major world currencies with a prevailing tendency to strengthen.

Japanese currency was positively impacted by yesterday's data on Services PMI, which rose to 42.3 points from 26.5 points earlier. The investment community also positively accepted the statement of the White House trade adviser, Peter Navarro, who said that the trade deal with China would continue to operate, thereby refuting his previous statements in which he said that the deal could be terminated at any time.

Australia
AUD is strengthening against most major currencies.

The market continues to positively view AUD after a recent speech by the Governor of the Reserve Bank of Australia, Philip Lowe, who assured investors of the stability and high efficiency of the current monetary policy, which allows keeping key indicators at target levels. To a greater extent, this applies to inflation, which does not exceed 2.2%, and the long-term benchmark at a key rate of 0.25%.

Oil
Oil prices show a moderate decline at the beginning of the day.

The energy market continues to be heavily pressured by concerns about the second wave of the COVID-19 pandemic. Yesterday's data on weekly oil reserves from the American Petroleum Institute showed their unexpected increase to 1.749M barrels against expectations of 0.300M barrels. In this regard, the most important for today's dynamics will be data from the Energy Information Agency of the US Department of Energy, as well as data on excess oil reserves in Cushing's storage, which have been declining for 6 consecutive weeks.

XAU/USD: gold comes to the fore again

Current trend

Gold quotes stays above the channel resistance line at the level of 1748.0, trading at the level of 1763.0.

The precious metals market is growing. Recently, the instrument was supported by growing fears about a new wave of the COVID-19 pandemic. The number of virus victims in Latin America has already exceeded 100K people, and in some regions of the United States there is an increase in newly detected cases by 25–30% against last week.

The volatility of the US dollar is extremely high, which is a bad signal for conservative investors. The second negative factor is the decline in oil prices. Of the Big Three, only gold remains relatively stable. It causes the inflow of new capital into it, which contributes to the growth of the precious metal.

Support and resistance

The price trades confidently above the resistance level of the sideways channel, and the prospects for further growth are quite high. Technical indicators signal a possible continuation of the uptrend. The range of fluctuations of the EMA indicator Alligator is expanding with an upward trend, and the histogram of the AO oscillator, going into the buying zone, is forming upward bars.

Resistance levels: 1778.0, 1800.0.
Support levels: 1748.0, 1670.0.

Brent Crude Oil: oil rises again

Current trend

Brent crude oil prices are recovering after a significant drop in the middle of the week on the backdrop of negative news about the increase in stocks in storage.

Stock data from the American Petroleum Institute (API) and the Energy Information Agency of the US Department of Energy (EIA) were unexpected. According to API data, weekly oil reserves in storage were 1.749M barrels, which is significantly higher than the forecast of 0.300M barrels. According to the EIA, oil reserves held by US firms showed an increase of up to 1.442M barrels, with analysts projecting 0.219M barrels. Excessive oil reserves in Cushing’s storage also remained in the negative zone, showing –0.991M barrels after a decrease of –2.608M barrels last week.

Also, quotes could be affected by the EIA report, according to which US oil production grew by 0.5M barrels and reached 11.0M barrels per day.

Support and resistance

The price of the asset continues to form a global upward correction and this week it consolidated above the Fibonacci retracement level of 38.2%. Today, continued growth and new attempts to achieve higher levels are possible. Technical indicators continue to hold the global buy signal: the range of the Alligator indicator EMAs fluctuations is still expanding, and the histogram of the AO oscillator is held in the positive zone.

Resistance levels: 45.75, 51.80.
Support levels: 39.25, 31.66.

Morning Market Review

EUR/USD

EUR is showing moderate growth against USD during today's Asian session, correcting after the "bearish" close of trading last week. The emergence of downtrend in the instrument was facilitated by the growth of correctional sentiment, while fundamentally the situation on the market changes little. EUR is recovering against expectations of the growth of the European economy; however, the outbreaks of disease that are recorded in various countries of the world again suggest the second wave of the epidemic, which can significantly affect the recovery of the global economy. Today, European investors are focused on the publication of statistics on business sentiment in the eurozone in June. Traders also expect the release of data on consumer inflation in Germany in June. Consumer inflation in Germany is projected to rise by 0,3 MoM after falling 0.1% MoM last month.

GBP/USD

GBP shows a slight increase against USD during today's morning session, retreating from local lows since May 29, updated at the end of last trading week. Macroeconomic data from the USA published last Friday turned out to be contradictory; however, on the whole, they contributed to a moderate growth of USD. Personal Spending of US citizens in May increased by 8.2% MoM after a decrease of 12.6% MoM last month. Analysts had expected growth by 9% MoM. Personal Income, on the other hand, decreased by 4.2% MoM after rising by 10.8% MoM in April. Analysts had expected decline by 6% MoM. Michigan Consumer Sentiment Index fell from 78.9 to 78.1 points in June, which turned out to be worse than market expectations of 79 points. Today, investors are awaiting the publication of May statistics on consumer credit in the UK. In addition, a speech by the member of the Monetary Policy Committee of the Bank of England, Gertjan Vlieghe, is expected during the day.

NZD/USD

NZD shows ambiguous dynamics of trading against USD during today's Asian session, located near 0.6400. Investors hesitate to open new long positions on the instrument, responding to alarming statistics that indicate an increase in the incidence of coronavirus in the world. A number of US states suspend the program of gradual lifting of restrictions, which inevitably leads to a revision of previous forecasts regarding the restoration of the global economy. At the same time, consumer interest in NZD is supported by the publication of good macroeconomic statistics. Today, traders expect publication of information on the dynamics of the construction market in the US in May. Also the release of Dallas Fed Manufacturing Business Index in June is expected today. Closer to the end of the American trading session, a speech will be made by the FOMC member, John Williams.

USD/JPY

USD is showing flat trading against JPY during today's Asian session. The instrument unsuccessfully tries to consolidate above 107.00, receiving support from the growth in demand for safe assets. Monday's macroeconomic statistics from Japan turned out to be ambiguous. Retail sales in Japan increased by 2.1% MoM in May after falling by 9.9% MoM a month earlier. At the same time, the annual indicator decreased by 12.3% YoY after a decrease of 13.9% YoY in April. Analysts had expected decline by 11.6% YoY. Large Retailers' Sales fell by 16.7% MoM, slightly correcting from the April rate of decline at 22.1% MoM.

XAU/USD

Gold prices show ambiguous dynamics during today's Asian session, trading near record highs since October 2012. The surge in the incidence of coronavirus is providing significant support to the asset, as investors are again actively talking about the second wave of the epidemic and the return of previous restrictions. In particular, alarming statistics come from the United States, where some states were forced to suspend the phased quarantine cancellation program. Additional support for gold is also provided by the soft monetary policy of the world's leading financial regulators.

Morning Market Review

EUR/USD

EUR is trading in both directions against USD during today's Asian session, consolidating after a moderate increase the day before. Yesterday, the pair managed to demonstrate active growth, but could not consolidate at new highs. The reason for the increase in purchasing activity for the instrument was the publication of good macroeconomic statistics on consumer inflation from Germany. Consumer Price Index in June accelerated from the previous –0.1% MoM to 0.6% MoM, which turned out to be better than expectations. In annual terms, prices added 0.9% YoY with an expected increase of 0.6% YoY. Harmonized Consumer Price Index for the same period accelerated from 0.5% YoY to 0.8% YoY, which also turned out to be better than the forecast of 0.6% YoY. Today, investors expect the release of statistics on consumer inflation for June in the eurozone. Also, traders will be focused on the speech of the ECB Vice President Luis de Guindos.

GBP/USD

The British pound shows ambiguous trading during today's Asian session, trying to consolidate below 1.2300. Yesterday, GBP fell against USD again, updating local lows since May 28, while by the end of the trading session on Monday, the "bulls" managed to partially recoup. At the beginning of the week, GBP was under pressure from macroeconomic indicators released in the UK. Consumer Credit in May decreased by 4.597B pounds after a decrease of 7.425B pounds over the past period. Analysts had expected a decline of 2.5B. The number of Mortgage Approvals in May grew by only 9.273K, which turned out to be significantly worse than the forecasts of 25K. Finally, investors were worried by statements by British Prime Minister Boris Johnson, who noted that he was ready for a dialogue with the EU on the Brexit issue, but was still considering an alternative scenario for the country to leave without an agreement at all.

AUD/USD

AUD strengthens slightly against USD during today's Asian session, continuing to develop a weak "bullish" momentum formed yesterday. Buying activity in AUD remains restrained, as investors assess the prospects of a new wave of the coronavirus epidemic amid an increase in the number of cases in several countries, in particular in the US. Data from China provide some support to the instrument this morning, while Australian Private Sector Lending showed negative results. The Chinese Non-Manufacturing PMI in June showed an increase from 53.6 to 54.4 points. NBS Manufacturing PMI for the same period strengthened from 50.6 to 50.9 points, which also turned out to be better than market expectations of 50.4 points. In the US today, several important statements by officials are expected at once, including a speech by US Treasury Secretary Steven Mnuchin and a speech by Fed Chairman Jerome Powell in the US Congress.

USD/JPY

USD is showing moderate growth against JPY during today's morning trading, located near local highs since June 9, updated the day before. Support for USD is provided by macroeconomic statistics from Japan published on Monday. Japan's Unemployment Rate in May rose from 2.6% to 2.9%, exceeding growth forecasts to 2.8%. Over the same period, Industrial Production fell by 8.4% MoM and 25.9% YoY, while analysts expected a decline of 5.6% MoM and 11.3% YoY. An additional impetus for USD growth was a slight improvement in the dynamics of the number of new cases of coronavirus in the United States over the weekend. The country is experiencing a repeated increase in the incidence of COVID-19, with the result that some states are forced to return some of the restrictive measures.

XAU/USD

Gold prices are consolidating near eight-year highs, supported by rising concerns about the second wave of the COVID-19 epidemic. The growth of cases is recorded in the USA, Brazil and India, which forces investors to reconsider their forecasts regarding the pace of global economic recovery. Only news about the appearance of medicine that can ease the course of the disease, as well as active work on the invention of the vaccine softens the situation. In addition, judging by reports from China, Beijing has managed to take a second outbreak of the disease under control and stop the further spread of the epidemic.