Daily Market Outlook, June 8, 2020
<h2><span>Daily Market Outlook, June 8, 2020 </span></h2>
<p><span><strong>Market sentiment remains broadly positive at the start of the new week</strong>, with most equity markets continuing to make gains across the Asia Pacific region. This follows the strong close to US stocks on Friday – in the wake of the stellar US payrolls report – and tentative signs of a slowing in new reported Covid-19 cases. </span></p>
<p><span><strong>In the UK, the FT reported that Chancellor Sunak may delay his big stimulus package of tax cuts and spending commitments until the autumn</strong>. A short while ago, the German industrial production report for April showed a sharp 17.9% decline in activity across the month – providing some context of the hit to German activity from the implementation of lockdown measures.</span></p>
<p><span><strong>Markets will probably continue to focus on further signs that lockdowns are easing.</strong> A number of European countries are set to lower some barriers this week while reports suggest that New York is making preparations to start opening up again. </span></p>
<p><span><strong>Timely economic data will receive attention but markets may continue to shrug off reports of the hit to economic growth during the lockdown</strong>. Today’s calendar is fairly light, however, ECB President Lagarde will testify to the European Parliament. Her comments are likely to be very similar to those made during her press conference following last Thursday’s policy announcement. She will be able to point to the extra €600bn of asset purchases that the ECB promised as part of its emergency support programme. However, she will also probably again emphasise the need for further fiscal support to help drive the EU’s economic recovery. </span></p>
<p><span><strong>Bank of England Chief Economist, Andy Haldane speaks at a ‘CogX’ workshop on the economy and the future of work</strong> (15:00BST). Meanwhile, the Eurozone’s Sentix investor confidence index for June is expected to post another improvement, from -41.8 in May to -22.0 </span><span>Overnight, the British Retail Consortium’s May retail sector update will provide timely information on UK consumer trends. Anecdotal reports from retailers point to long queues and healthy sales as they re-open. However, May data may be too early to capture this in a significant way.</span></p>
<p><span><strong>CFTC data for the week through June 2 reveal a modest reduction in the bearish bet on the USD that has accumulated over the past couple of months</strong>. The aggregate short USD position, reflected in positioning in the major currencies we follow here, was trimmed USD242mn to stand at a little over USD7.5bn. Even so, FX traders seem poorly positioned for the risk rally that has emerged in recent weeks. </span><span>Currency speculators remained bullish on the EUR, and added just over USD1bn to their net long positions as the EUR climbed against the USD. In contrast, and against the run of play in the markets, investors added—a little more aggressively—to net short GBP positions at the same time. The GBP out-performed the EUR over the week and, one has to think, GBP gains in the past few days can perhaps be explained to some extent by active traders covering GBP shorts</span></p>
<h3><b>Today’s Options Expiries</b><span> for 10AM New York Cut (notable size in bold)</span></h3>
<ul>
<li><span>EURUSD: 1.1230-35 (500M), 1.1245 (430M), 1.1300-10 (500M), 1.1365-70 (850M), 1.1395-1.1400 (800M)</span></li>
<li><span>GBPUSD: 1.2655 (282M)</span></li>
<li><span>USDJPY: 109.20-25 (410M)</span></li>
<li><span>AUDUSD: 0.6825 (345M), 0.6975 (301M)</span></li>
</ul>
<h3><span>Technical & Trade Views</span></h3>
<p><b>EURUSD Bias: Bullish above 1.1250 targeting 1.1420</b></p>
<p><span>From a technical and trading perspective, as 1.1250 acts as support bulls will look for a test of offers and stops at 1.14 before we likely see another round of profit taking. A closing breach of 1.1230 would suggest a broader corrective phase to test bids back towards 1.10 before the next leg higher</span></p>
<p><img class="aligncenter size-full wp-image-44872" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.35.29.png" alt="" width="2149" height="1210" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.35.29.png 2149w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.35.29-300×169.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.35.29-1024×577.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.35.29-768×432.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.35.29-1536×865.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.35.29-2048×1153.png 2048w" sizes="(max-width: 2149px) 100vw, 2149px" /></p>
<p><b>GBPUSD Bias: Bullish above 1.26 targeting 1.28</b></p>
<p><span>GBPUSD From a technical and trading perspective, as 1.26 supports on pull back look for a test of 1.28 descending trendline and the 78.6% retracement of the covid crisi decline, from here we could see a broader profit taking move and correction. On the day only a close back below 1.2575 would suggest the current cycle has completed</span></p>
<p><img class="aligncenter size-full wp-image-44873" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.40.22.png" alt="" width="2158" height="1214" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.40.22.png 2158w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.40.22-300×169.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.40.22-1024×576.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.40.22-768×432.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.40.22-1536×864.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.40.22-2048×1152.png 2048w" sizes="(max-width: 2158px) 100vw, 2158px" /></p>
<p><b>USDJPY Bias: Bullish above 1.09 targeting 1.1070</b></p>
<p><span>USDJPY From a technical and trading perspective, the topside breach of 108.50 delays downside objectives opening a retest of range resistance above 109, however as supply above 1.09 stems the upside look for a retest of buds back to 1.08 UPDATE the upside breach of 1.09 suggests range expansion with 110.70 the upside object as 1.09 supports</span></p>
<p><img class="aligncenter size-full wp-image-44874" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.41.26.png" alt="" width="2148" height="1209" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.41.26.png 2148w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.41.26-300×169.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.41.26-1024×576.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.41.26-768×432.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.41.26-1536×865.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.41.26-2048×1153.png 2048w" sizes="(max-width: 2148px) 100vw, 2148px" /></p>
<p><b>AUDUSD Bias: Bullish above .6900 targeting .7085)</b></p>
<p><span>AUDUSD From a technical and trading perspective,sustained price action above .6800 witnessed the grind higher persist opening a test of the psychological bit figure at .7000. From this initial foray above .7000 anticipate profit taking pullback to .6800 UPDATE target achieved as .6950 supports look for test of stops to .7050 UPDATE offers and stops towards .7100 look vulnerable, expect supply above .7100 to drive a test of bids back towards .6900</span></p>
<p><img class="aligncenter size-full wp-image-44876" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.43.32.png" alt="" width="2149" height="1208" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.43.32.png 2149w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.43.32-300×169.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.43.32-1024×576.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.43.32-768×432.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.43.32-1536×863.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-08-08.43.32-2048×1151.png 2048w" sizes="(max-width: 2149px) 100vw, 2149px" /></p>
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