BOE DAY – Cautious trading

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Daily Outlook – 18 June 2020

By: Andria Pichidi

Market sentiment remains cautious amid fears of a new wave of virus infections and concern about the economic impact. JPN225 down -0.46% and the ASX has lost -0.90% after the dismal jobs report. US futures are down -0.4-0.8%. GER30 and UK100 futures are down -0.8% and U.S. futures are faring little better after a largely negative session for stock markets in Asia
• Australia’s jobs report for May was much worse than expected and showed employment falling by -222.7K in May prompting PM Morrison to say the hit to jobs from Covid-19 is devastating.
• China’s PBOC cut the rate on its 14-day reverse repo as it revived the measure and injected a net 40 bln yuan in today’s operations while the central bank governor said he wants the flow of credit in the economy to increase to at least 30 trillion yuan.
• On the virus front there were further restrictions in Beijing amid new clusters of cases, while in the US Texas reported an 11% surge in hospitalizations.
• President Trump said he won’t impose lockdowns again,
• Voicing optimism in a vaccine.
• Pompeo’s meeting with his Chinese counterpart highlighted the need to share virus information, but China also rejected any “interference” on Hong Kong and Taiwan and flagged possible retaliation if the U.S. goes ahead with a bill on Uyghur rights.

USOIL – hit $39.04 after EIA, but reversed to S1 37.
USDIndex – steady within 96 territories. S1 at 96.75 and R1 97.32
EUR – choppy at PP 1.1250, S1 1.1200 and R1 at 1.1288
JPY – fell to 106.69. Currently above 106.80 (S1). PP at 107.12
GBP – steady between 1.25-1.2570 since the US session. R1 1.2595 and S1 1.2514.
AUD – dipped to 0.6835. . PP at 0.6885 , S1 0.6850, R1 0.6920
CAD – retreated from 1.3608 to 1.3545.

GOLD – sideways between 1722-1730 area.

TODAY: SNB & BoE rate decision and press conference, US Initial Claims, and Philly Fed numbers for more insight on the recovery.

Biggest mover – EURNZD (UP by 0.22%). The pair sustains a downwards move the past 6 days, posting lower highs and lows below 20-DMA. Intraday though the outlook changed slightly into positive one after the rebound seen from 1.7330 up to 1.7490. Currently, it remains sideways below R1 for 7 consecutive sessions. The fast MA’s aligned higher, while momentum indicators suggest that the asset enters a ranging market. Stochastic, RSI, and MACD have flattened. ATR for H1 at 0.0032 and Daily ATR at 0.019


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