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Daily Outlook – 3 June 2020
By: Andria Pichidi
AUD above 0.6900; Australian in Recession and Martial law on the table
Bond markets were under pressure as stock markets continued to rally.
A -0.3% q/q contraction in Australia’s GDP and the official acknowledgment that the economy is in recession for the first time in 29 years was shrugged off, amid signs that the Q2 will be bad, but not as bad as initially feared. Australian building approvals data earlier a massive upside surprise – ASX has lifted 1.7% despite Q1 GDP.
Final China services and composite PMIs for May signaled a sharp rebound.
DAX and FTSE 100 futures are outperforming with gains of 1.3% and 0.98% respectively.
EU-UK trade deal restarted but no sign of progress yet, only signs of a compromise. Extension???+
UK PM Johnson offers hope of refuge to 3m HK people. – change immigration rules.
USOIL lifted to $37.70 – US production has been slashed while as investors wait for the OPEC+ decision on output cuts.
USDIndex – down to S1 97.35. PP set at 97.70
EUR –breaks 1.1200 (R1) with PP at 1.1240 and S1 at 1.1160. Immediate Support at 20-hour SMA
JPY – spiked to 108.84 as buy-stops were noted over the 108.00 mark on the way up. PP ay 108.30
GBP – peaked to 1.2610, while currently has stabilized at R1 at 1.2590 level. R2 at 1.2630.
NZD – found a floor at 0.64 (R1) after 72 pips rally since overnight. R2 at 0.6445
CAD – at 1.3482 – just a breath above the 200-day SMA and February 2020 high.
CHF – stabilized above 0.96 after Swiss GDP data disappointed bears
GOLD – below PP at 1722 – needs to hold the $1692 level to avoid bigger falls (profit-taking and strength in global stock markets the key reasons) Bitcoin – corrects back below $10 K.
TODAY: Data releases so far focus on German jobless numbers for May as well as final services and composite PMI readings for the UK and the Eurozone.G7 finance ministers conference call and ISM Manufacturing PMI from the US.
Event of the day: BOC rate Decision and Statement
Biggest mover – AUDUSD (up by 0.46%). The asset extends northwards above the midpoint of 3-year down leg after broking 0.6900 level. Currently, it looks to has stabilized at R2 and above the 0.6920 level as a recovery action.. Fast MA’s, RSI, and the signal line in MACD indicator have flattened, suggesting consolidation in the short timeframe. However the overall picture remains strongly bullish, with the next Resistance at 0.6985-0.7000 area. Support is set at 0.6900 (20-hour SMA) and PP at 0.6860.H1 ATR 0.0018, Daily ATR 0.0091
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