Forex News Analysis by LiteForex

EUR/USD

Today, during the Asian session, the EUR/USD pair shows ambiguous trading dynamics, consolidating near local highs of March 17, renewed yesterday. EU macroeconomic statistics published at the beginning of the week was ambiguous but EUR grew against the background of USD poor positions. Thus, Markit Manufacturing PMI of France for May increased from 40.3 to 40.6 points, which was better than the neutral forecast. The corresponding indicator in Germany fell slightly from 36.8 to 36.6 points. The EU index corrected from 39.5 to 39.4 points. American data on business activity showed growth but could not reach the expected values. The ISM manufacturing sector index rose from 41.5 to 43.1 points with a forecast of an increase to 43.6 points.

GBP/USD

Today, during the Asian session, the GBP/USD pair tends to a “bearish” correction, retreating from 1.2500, which was achieved for the first time since the beginning of May. USD purchasing activity gradually recovers amid the publication of positive macroeconomic statistics. Also, market sentiment improved slightly after a press conference by US President Donald Trump last Friday. Despite the same rhetoric and a tendency to blame China, Trump decided not to break the previously signed trade agreement, which gives hope for the continuation of the negotiation process. On Tuesday, investors are focused on the block of macroeconomic statistics from the UK on the Nationwide housing price index for May, as well as on the volume of consumer lending for April.

AUD/USD

Today, during the Asian session, the AUD/USD pair is growing moderately, renewing the highs of the end of January 2020. Yesterday, the Australian dollar showed the best recent growth due to a decrease in the US currency across the entire spectrum of the market. Additional support for the instrument was provided by data on business activity from Australia and China, which are steadily recovering from the crisis. On Tuesday, strong statistics support AUD, too, but buying activity declined amid the publication of an RBA decision on the interest rate. However, the market did not expect any surprises, because earlier, the head of the regulator noted that the current monetary policy is fully consistent with the current economic situation in the country and in the world. As predicted, the RBA kept the interest rate at 0.25%.

USD/JPY

Today, during the Asian session, the USD/JPY pair is growing slightly, continuing the solid flat trend formed in the short term. Yesterday, JPY was supported by the publication of positive macroeconomic data from Japan; however, today, purchasing activity in the dollar is gradually recovering. In general, the demand for shelter assets remains high, as the global economic recovery process and the gradual abandonment of restrictive measures in connection with the coronavirus epidemic are overshadowed by a sharp increase in tension between the US and China. Also, an internal political struggle is growing in the United States related to citizens' protests in response to the police murder of George Floyd in Minneapolis and the upcoming presidential election.

XAU/USD

Today, during the Asian session, gold prices are consolidating, trading near local highs of May 21. The instrument is supported by the market tension caused by the growing controversy between the US and China and a marked slowdown in the global economy due to the coronavirus epidemic. Also, investors do not exclude the appearance of new support measures from the leading world securities, up to the introduction of negative rates, which will increase the attractiveness of gold.

EUR/USD: the pair is actively growing

Current trend

The EUR/USD pair continues to grow amid positive data from European countries, mostly affected by COVID-19.

This week’s EU macroeconomic statistics are considered by investors as extremely positive. Thus, Manufacturing PMI in Germany for May amounted to 36.6 points, which is slightly lower than expectations at 36.8 points. Manufacturing PMI in Spain is at 38.2 points, which is better than the forecast of 38.0 points, while in Italy Manufacturing PMI reached 45.4 points, which is significantly higher than expectations at 37.1 points. Also, the rate of change in the number of unemployed in Spain fell to 26.6K from 282.9K a month earlier.

The index showing the ratio of the US dollar to a basket of major currencies continues to fall and is almost reaching the levels of February, trading at 97.300.

Support and resistance

After breaking the local resistance of the sideways channel, the price is actively growing, which is confirmed by technical indicators. The range of EMA fluctuations of the indicator Alligator continues to expand upward, and the histogram of the AO oscillator is in the positive zone, which indicates a high probability of the continuation of the current trend.

Resistance levels: 1.1240, 1.1450.
Support levels: 1.1150, 1.0980.

EUR/USD

Today, during the Asian session, the EUR/USD pair is slightly correcting, retreating from 3-month highs, renewed yesterday. The appearance of a “bearish” dynamics is facilitated by technical factors since investors are interested in the closing of the profitable long positions. The macroeconomic background remains the same. European data released on Wednesday were ambiguous. Germany reported an increase in unemployment for May from 5.8% to 6.3%, which was by 0.1% worse than market expectations. The total number of unemployed for June increased by 238K, exceeding forecasts of 200K. At the same time, European statistics pleased investors with a moderate increase in business activity indices, which respond positively to the gradual lifting of quarantine restrictions. Markit Composite PMI in Germany rose from 31.4 to 32.3 points for May, which was better than the neutral forecast.

GBP/USD

Today, during the Asian session, the GBP/USD pair is falling, retreating from the highs of April 30, renewed on Wednesday, amid the correctional growth of the US currency, which has been actively falling for about two weeks. On Wednesday, USD is moderately supported by American macroeconomic statistics. Thus, ADP Nonfarm Payrolls reflected a decrease of 2.760 million jobs, which was significantly lower than the expected decrease of 9,000 million. At the same time, the data indicated a moderate increase in business activity. ISM Service PMI for May rose from 41.8 to 45.4 points against the forecast of an increase to only 44 points.

AUD/USD

Today, during the Asian session, the AUD/USD pair shows ambiguous dynamics, deviating from local highs from the beginning of the year, renewed yesterday. The Australian dollar could not consolidate above the level of 0.7000, however, a certain "bullish" potential remains. Correctional growth of the US currency against almost the entire market led to a decrease in the quotes for the instrument but the demand for shelter assets remains at the same level. Today’s macroeconomic statistics from Australia were slightly better than the forecasts but could not significantly support the instrument. Thus, retail sales for April fell by 17.7% MoM after falling by 17.9% MoM last month. The trade balance for the same period corrected from 10.602B to 8.800B Australian dollars, which was better than market expectations of 7.500B.

USD/JPY

Today, during the Asian session, the USD/JPY pair is growing moderately, renewing local highs of April 8. Now, the instrument has added about 0.15% and is trying to consolidate above 109.00. The upward trend is due to the correctional growth of the American currency across the entire spectrum of the market after the publication of positive macroeconomic statistics on US employment. Yesterday’s ADP report gives hope that Friday's data on the labor market for May will be more optimistic. Today, USD is additionally supported by disturbing news regarding the coronavirus epidemic in Iran. Yesterday, official Tehran reported a record increase in incidence over the past two months, although more than seven weeks have passed since the weakening of quarantine restrictions.

XAU/USD

Today, during the Asian session, gold prices are growing slightly, consolidating near the level of 1700.00 after an active decline yesterday. The upward dynamics is due to a shift in the focus of investors' attention to new alarming signals about the danger of the second wave of coronavirus. Also, technical factors also played a role since today, many instruments are correcting during the morning trading session. Finally, the market expects the emergence of new stimulus measures by the world Central Banks. On Thursday, the ECB will publish the decision on the interest rate, which is now at the zero level. However, investors are more actively monitoring the creation of a fund for the restoration of the European economy, which will amount to 750B euros.

Brent Crude Oil: oil prices are growing

Current trend

The price range is rapidly expanding from above, signaling in favor of the further development of the “bullish” trend in the short term. The instrument is supported by the OPEC+ decision made on Saturday to extend the current agreement to reduce oil production by almost 10M barrels per day until the end of July. The previous agreement called for a reduction in production from July to the end of 2020 by 8M barrels per day. Additional support for quotes is provided by the gradual recovery of the global economy, which provokes a noticeable increase in demand for oil and petroleum products.

A report released on Friday by Baker Hughes on the number of active oil platforms reflected another decrease in the number of active rigs in the US from 222 to 206 units.

Support and resistance

Bollinger Bands in D1 chart show active growth. The price range is expanding; however, it fails to catch the development of "bullish" sentiments. MACD indicator is growing preserving a stable buy signal (located above the signal line). Stochastic reversed in a horizontal plane near the level of “100”, which signals the risks of an overbought instrument in the ultra-short term.

Existing long positions should be kept in the short and/or ultra-short term until the signals from technical indicators clear up.

Resistance levels: 43.05, 45.00, 46.49.
Support levels: 41.50, 40.00, 38.50, 36.59.

WTI Crude Oil: oil is traded lower

Current trend

WTI crude oil prices are corrected downwards after an increase the day before caused by OPEC+ decision to extend production quotas.

The current quotas for the reduction of oil production at the level of 9.7M barrels per day were extended until the end of July. OPEC+ participants felt that ongoing measures are yielding the expected results and that this agreement should be continued. However, Saudi Arabia said that the state-owned company Saudi Aramco, starting in July, will raise prices for all brands of oil for most regions of the world. The largest increase is expected for Asia, where prices may rise by 5.6-7.3 dollars per barrel. This way, Saudi Arabia partially compensates for the March price decline.

Support and resistance

The asset continues global correctional growth and last week the price overcame the Fibonacci retracement level of 50.0%. Despite the fact that the global trend indicator Alligator retains an active buy signal, the probability of a downward correction is quite high. This is indicated by the readings of the AO oscillator, on which a descending bar has formed.

Resistance levels: 42.40, 64.00.
Support levels: 35.60, 28.80.

Morning Market Review

EUR/USD

EUR shows insignificant growth against USD during today's Asian session, continuing the development of yet another "bullish" impulse formed yesterday. The instrument tests the level of 1.1350 for a breakout and returns to the previous three-month local highs, updated on June 5. Some support to EUR is provided by yesterday's macroeconomic statistics from the eurozone. According to updated data, eurozone GDP in Q1 2020 fell by 3.6% QoQ after the previous estimate of –3.8% QoQ. In annual terms, the eurozone economy lost 3.1% YoY, which is also slightly better than previous data of –3.2% YoY. Employment Change in Q1 2020 accelerated from +0.3% YoY to +0.4% YoY. USD remains under pressure amid expectations of the publication of the Fed two-day meeting minutes, scheduled for today. In addition, on Wednesday, investors expect the release of May statistics on consumer inflation in the USA.

GBP/USD

GBP shows a slight increase against USD during today's morning trading, updating its highs since March 12. The day before, the instrument showed a tendency to a downward correction, which was due to the restoration of USD and the growth of anxiety about the prospects for trade negotiations between the EU and the UK. By the close of Tuesday's session, the pair managed to win back all its losses and even to go out into the green zone, which allowed it to maintain a nine-day upward rally. Today, investors are focused on the release of the Fed meeting minutes. Given the strong report on the labor market that the US economy showed at the end of last week, the regulator will take a wait-and-see attitude and confine itself to the usual statements about the need to "keep abreast."

AUD/USD

AUD is showing moderate growth against USD during today's Asian session, recovering after a corrective decline the day before. The instrument adds about 0.50% and is actively testing the level of 0.7000 for a breakout. AUD is supported by rather weak positions in USD, which is again retreating across the entire spectrum of the market after an unsuccessful growth attempt on Tuesday. In turn, macroeconomic statistics from Australia and China hinder the more active growth of the instrument. Home Loans in Australia in April fell by 4.4% after a decrease of 0.1% in March. Analysts had expected zero dynamics. Chinese data reflected a sharp decline in consumer inflation in May. Consumer price index slowed down from 3.3% YoY to 2.4% YoY, which turned out to be worse than the forecast of 2.7% YoY.

USD/JPY

USD is falling against JPY during today's morning session, continuing to develop a confident downtrend from the beginning of the week. The instrument is trading near 107.50, while at the end of trading last week the pair was approaching 110.00. Curiously, JPY continues to ignore weak macroeconomic statistics released in Japan. Data released on Wednesday indicated a 17.7% YoY decrease in Machinery Orders in April after a 0.7% YoY decrease in March. Analysts had expected a drop of 14%. In monthly terms, the indicator collapsed by 12% MoM after a decrease of 0.4% MoM over the past period.

XAU/USD

Gold prices show a slight increase during today's Asian trading, consolidating after a noticeable rise the day before, which was triggered by another surge in investor interest in safe assets. Yesterday, a two-day Fed meeting started, the minutes of which will be published tonight. Despite the fact that no significant changes in the monetary policy vector are expected, investors prefer to exercise extra caution, given the magnitude of the economic turmoil in the global economy due to the coronavirus epidemic.

Morning Market Review

EUR/USD

Today, during the Asian session, the EUR/USD pair is significantly falling, retreating from the three-month highs, renewed yesterday. Now, the instrument has lost about 0.36% and is actively testing the level of 1.1330 for a breakdown. The weakening of the euro is largely due to technical factors. The two-day meeting of the Fed, which ended on Wednesday, helped to partially relieve tension in the market, and now investors are actively closing long profitable positions. Meanwhile, the published protocols practically did not contain anything new. The regulator complained about the significant negative consequences of the coronavirus and said that it expects the US economy to decline by 6.5% this year. The unemployment rate for the year will exceed 9%. The Fed is currently refusing the idea of ​​negative interest rates. It is assumed that rates will remain at near-zero levels at least until the beginning of 2023.

GBP/USD

Today, during the Asian session, the GBP/USD pair is steadily declining, correcting after ten upward trading sessions, which allowed the pound to renew its local maximums of March 12. The reason for the weakening of the instrument was the correctional growth of the US dollar, which was released from pressure for some time. Published yesterday, the minutes of the two-day meeting of the US Federal Reserve did not bring any surprises, and the negative forecasts of the US regulator regarding the pace of the slowdown in the US economy contributed to an increase in demand for shelter assets. Today, traders are focused on a block of US data on the dynamics of industrial inflation. Also, on Thursday, Initial and Continuous Jobless Claims will be released. It is expected that the number of initial applications for the week of June 5 will decrease from the previous 1.877 million to 1.550 million.

AUD/USD

Today, during the Asian session, the AUD/USD pair is falling, correcting from the local maximums of July 2019. The instrument falls amid large-scale growth of the American currency along the whole market after the publication of the minutes of the two-day Fed meeting. As expected, the US regulator did not change the parameters of monetary policy but disappointed the markets with extremely negative forecasts for the US economy for the current year. The Fed expects that US GDP will decline by 6.5% in 2020, while the current economic crisis will affect almost all areas of the economy. The forecast will be relevant if the second wave of the epidemic does not happen, which cannot be ruled out. On Thursday, Australian data negatively affected the instrument. The indicator of expectations for consumer price inflation in June fell from 3.4% to 3.3%, while the forecast assumed its growth to 4.2%.

USD/JPY

Today, during the Asian session, the USD/JPY pair reversed upwards due to a surge in investor interest in safe assets. Also, the instrument was affected by the technical factors as the dollar was heavily oversold against many currencies on the market. Wednesday’s US macroeconomic statistics were negative. Thus, the consumer price index for May slowed down from +0.3% YoY to +0.1% YoY, which was worse than market expectations of +0.2% YoY. CPI excluding food and energy decreased by 0.1% MoM for the same period, slightly improving from the previous decline of 0.4% MoM, and slowed down from +1.4% YoY to +1.2% YoY with a forecast of +1.3% YoY.

XAU/USD

Today, during the Asian session, gold prices are falling, retreating from local highs of June 2, which the instrument renewed due to a confident “bullish” rally at the beginning of the trading week. In the first half of the week, experts linked the growth of the precious metal with new support measures from the Fed; however, the published protocols disappointed the market. The regulator only promised to continue buying up bonds but no long-term plan to support the economy was presented. As for the rates, they remained unchanged at the level of 0.25%, and the Fed predicts their preservation at current values ​​at least until the beginning of 2023.

Morning Market Review

EUR/USD

EUR shows the flat dynamics of trading against USD during today's Asian session, consolidating near 1.1300, which was achieved due to the active decline of the instrument the day before. Market sentiment worsened again after the publication of the two-day Fed meeting minutes on Wednesday. Despite the fact that the regulator left the interest rate unchanged at 0.25% and did not announce new radical measures to support the economy, the demand for safe assets has grown markedly. This was partly due to the release of updated forecasts from the Fed, which did not bode well for the US economy. An additional pressure on risky currencies is exerted by alarming reports of an increase in the incidence of coronavirus in various countries. Investors fear that a second wave of the epidemic may begin closer to the autumn, and the economy will have to close again.

GBP/USD

GBP is slightly declining against USD during today's Asian session, continuing the development of a "bearish" momentum formed the day before. Pressure on the instrument is exerted by the widespread strengthening of USD, as well as a markedly reduced interest of investors in risk. Macroeconomic statistics from the USA published on Thursday turned out to be moderately optimistic. Initial Jobless Claims for the week ending June 5 decreased from 1.897M to 1.542M, which was slightly better than market expectations of 1.550M. Continuing Jobless Claims as of May 29 also showed a downtrend from 21.268M to 20.929M with a forecast of a decrease to 20M. On Friday, investors are focused on macroeconomic statistics from the UK on the dynamics of GDP and industrial production for April. UK GDP is expected to fall by a record 18.4% in April.

AUD/USD

AUD shows ambiguous trading dynamics against USD during today's Asian session. The active decline was replaced by flat trading; the instrument is trading near 0.6850, very close to the opening point. Investors are still actively buying American currency amid a marked decline in optimism in the market. The minutes of the US Federal Reserve meeting published on Wednesday helped lower demand for risk, as they again reminded traders of the magnitude of the economic crisis that erupted against the backdrop of the COVID-19 epidemic. Additional pressure on AUD is also exerted by a slowdown in commodity markets, despite the fact that OPEC+ agreed to extend the agreement on limiting oil production until the end of July.

USD/JPY

USD shows strong growth against JPY during today's Asian session. The US currency is adding about 0.33% and is testing 107.20 for a breakout. The "bullish" dynamics of the instrument replaced the four-day downward rally, following which USD updated local lows since May 11against JPY. In addition to the widespread strengthening of USD, pressure on JPY on Friday was exerted by weak macroeconomic statistics from Japan. In April, industrial production in the country decreased by 15% YoY after a decrease of 5.2% YoY in March. In monthly terms, production collapsed by 9.8% MoM with a decrease of 3.7% MoM in March. BSI Large Manufacturing Conditions Index in Q2 2020 decreased from –17.2 to –52.3 points.

XAU/USD

Gold prices show flat dynamics during today's morning session, consolidating near 1730.00. The day before, the instrument showed negative dynamics, retreating from its local highs since June 2 against the background of widespread strengthening of USD. Additional pressure on gold was exerted by the fact that the US regulator has at the moment abandoned the idea of negative interest rates, and is inclined to take a wait and see attitude, continuing only to increase the program of quantitative easing if necessary. At the same time, the Fed's economic indicators and forecasts indicate a rather difficult situation for the American economy, which supports the demand for gold. In addition, investors are worried about the possibility of a second wave of the COVID-19 epidemic, which could force countries to return some of the restrictions before the vaccine is found.

EUR/USD: EUR is corrected

Current trend

EUR shows moderate growth against USD during today’s Asian session, retreating from local lows updated at the end of last trading week, marked by a two-day decline in EUR quotes. The instrument is testing the level of 1.2560 for a breakout. EUR is supported by technical factors, as well as the publication of good macroeconomic statistics from China, which, however, turned out worse than its forecasts. Industrial Production in China in May showed an increase of 4.4% YoY after an increase of 3.9% YoY in April. Analysts expected an increase of 5% YoY. Retail Sales for the same period decreased by 2.8% YoY after falling by 7.5% YoY in April. Market forecasts suggested a decline of 2% YoY.

In general, in the current situation, the position of EUR looks very promising. Experts believe that in the near future, EUR will make an attempt to grow to its March highs at 1.1500.

Support and resistance

Bollinger Bands in D1 chart show stable growth. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD reversed downwards having formed a sell signal (located below the signal line). Stochastic keeps a confident downtrend but is located near its lows, which indicates the growing risks of oversold EUR in the ultra-short term.

Resistance levels: 1.1284, 1.1340, 1.1421, 1.1500.
Support levels: 1.1200, 1.1153, 1.1100, 1.1054.

Morning Market Review

EUR/USD

EUR shows insignificant growth against USD during today's Asian session, continuing the development of the "bullish" impulse formed yesterday. At the beginning of the week, the positions of EUR look quite stable, given the gradual recovery of the global economy after the COVID-19 epidemic. At the same time, when it comes to individual macroeconomic publications and statements by officials, the picture is not so clear. On Monday, the eurozone reported on the dynamics of the trade balance in April. The indicator fell sharply from a surplus of EUR 25.5B to EUR 1.2B, which was significantly worse than market expectations of EUR 22.9B. European investors today are focused on the statistics on consumer prices in Germany in May. Also, ZEW reports on Economic Sentiment are expected to be released in Germany and the eurozone.

GBP/USD

GBP shows active growth against USD during today's morning session, updating local highs of June 11. The instrument adds about 0.50% and is testing the level of 1.2670 for a breakout. GBP is supported by the corrective sentiment on USD, while the fundamental factors for the growth of GBP are quite insignificant. Traders are focused on April data on the UK labor market. According to the results of April, the Unemployment Rate remained at 3.9%, and the Average Earnings Including Bonus slowed down from 2.4% 3MoY to 1% 3MoY. In the US, investors expect the release of May statistics on retail sales, as well as a speech by the US Federal Reserve Chairman Jerome Powell in Congress.

AUD/USD

AUD continues moderate growth against USD during today's Asian session, taking advantage of the weakness of USD in the market. Published on Monday, macroeconomic statistics from China supported the instrument, although it did not meet all the expectations of analysts. Industrial Production in May increased by 4.4% YoY, accelerating from the previous value of 3.9% YoY. Experts predicted an increase of 5% YoY. During today's morning session, investors are focused on statistics from Australia, which, however, does not have a significant impact on the instrument. The RBA published the minutes of its June 2 meeting, at which the regulator kept the rate unchanged at 0.25% and noted that the current monetary policy provides the Australian economy with all the necessary support.

USD/JPY

USD shows uncertain growth against JPY during today's Asian session, continuing the development of a “bullish” signal for correctional growth, formed at the end of last week. A meeting of the Bank of Japan on the interest rate was held this morning. As expected, the regulator took a wait-and-see position and kept the key interest rate at –0.1%. In an follow-up statement, the Bank of Japan noted that it would maintain the current monetary policy rate until it reaches the inflation target of 2%.

XAU/USD

Gold prices show flat trading dynamics during today's Asian session, consolidating after quite active trading the day before. At the beginning of the week, the instrument showed a steady decline, which was partially triggered by the appearance of correctional dynamics for the oversold USD. Closer to the end of the trading session on Monday, the "bulls" managed to recoup, which was due to increased fears about the second wave of the coronavirus epidemic. The launch of the next Main Street lending program by the US Federal Reserve, which has been actively developed over the past 3 months, provided support to the instrument. Under the new program, financial assistance will be available to small and medium-sized businesses with no more than 15K employees. Loans totaling up to USD 600B are supposed to be granted.