Daily Market Outlook, July 1, 2020

<h2><span>Daily Market Outlook, July 1, 2020 </span></h2>
<p><span><strong>The Asian equity market is mostly up this morning but Japan is down and Hong Kong is closed.</strong> European and US futures prices are currently mixed. Markets may have been helped by the People’s Bank of China’s announcement of a cut in its relending and rediscounting interest rates for loans to small and agriculture-related firms.</span></p>
<p><span><strong>China’s June Caixin manufacturing was a stronger-than-expected 51.2, up from 50.7 in May</strong>. The final reading on Australia’s manufacturing PM also rose to 51.2 (from 49.8 originally). However, Japan’s Q2 Tankan survey saw large manufacturers’ confidence slump to its lowest since 2009.  </span></p>
<p><span><strong>Today’s Eurozone and UK June manufacturing PMI data numbers will be updated</strong>, as first estimates were released last week. Both rose by more than expected. The UK outturn crept above the key 50 level, which signals an expansion in activity. In contrast the Eurozone total remained well below 50, although France climbed to a 21-month high of 52.1. Today’s data will include later returns and so may see some modest upward revisions. There will also be first June results for countries such as Italy and Spain who don’t release initial estimates. </span></p>
<p><span><strong>Given that lockdown restrictions have been lowered in the US during June it seems very likely that the ISM manufacturing index will be up sharply from May.</strong> Less certain is whether it will move above 50. The timelier PMI index released by Markit stayed just below the 50 level. However, the two series do not always move in tandem and other indicators suggest that manufacturing activity expanded. So we look for the headline measure to rise to 50 3 in June (from 43.1 in May).</span></p>
<p><span><strong>US ADP June employment will be watched for a signal on tomorrow’s official employment data</strong>. The ADP does not always give a reliable signal on the official numbers but last month it did point to an upside surprise. As restrictions have been eased further in June we look for a 2,600k rise in the ADP measure.</span></p>
<p><span><strong>The US Federal Reserve left policy unchanged in June</strong>, including keeping interest rates at the zero lower bound and maintaining asset purchases “at least at the current pace”. Nevertheless, the minutes of that meeting may be revealing in areas where markets think policy may be changed in future. Those include the Fed’s forward guidance (where there was a lot of prior speculation about a change in June), yield curve control and negative interest rates. However, a number of Fed policymakers have recently played down the likelihood of the latter two.</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: 1.1160-65 (500M), 1.1180 (600M), 1.1200-10 (660M) 1.1220-25 (825M), </span><b>1.1270-75 (1.9BLN), 1.1350 (1BLN)</b></li>
<li><span>GBPUSD: 1.2400 (500M).</span></li>
<li><span>AUDUSD: 0.6815 (322M), 0.6880-85 (800M)</span></li>
<li><span>USDJPY: 106.85-90 (330M), 107.00-10 (450M), 107.30 (400M)</span></li>
</ul>
<h3><span>Technical &amp; Trade Views</span></h3>
<p><b>EURUSD Bias: Bullish above 1.1150 targeting 1.15</b></p>
<p><span>From a technical and trading perspective, as symmetry swing support at 1.1170 supports there is a window for fresh demand to take prices higher again to retest cycle highs above 1.14 enroute to an ultimate retest of year to date highs at 1.15. A close today through 1.1250 will encourage bullish sentiment flipping the daily VWAP bullish and setting an interim equality objective at 1.1372. Failure to defend 1.1150 would open a move to test the downside equality objective at 1.1092</span></p>
<p><img class="aligncenter size-full wp-image-46279" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-06-29-08.00.30.png" alt="" width="2145" height="1236" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-06-29-08.00.30.png 2145w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-06-29-08.00.30-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-06-29-08.00.30-1024×590.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-06-29-08.00.30-768×443.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-06-29-08.00.30-1536×885.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-06-29-08.00.30-2048×1180.png 2048w" sizes="(max-width: 2145px) 100vw, 2145px" /></p>
<p><b>GBPUSD Bias: Bullish above 1.2324 Bearish below</b></p>
<p><span>GBPUSD From a technical and trading perspective, 1.2324 equality downside objective achieved, buyers have stepped in again as of writing to defend the equality objective. On the day only a close back through 1.2440 would suggest a more meaningful low is in place for another attempt to take out stops above 1.28. A failure below 1.23 would open a move to test 1.21 UPDATE a second failure at 1.2250 will open a move to test bids back towards 1.21, however, if bulls can defend yesterday’s lows then there is a window to mount a corrective move back to test 1.2450 from below</span></p>
<p><img class="aligncenter size-full wp-image-46280" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.02.39.png" alt="" width="2143" height="1233" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.02.39.png 2143w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.02.39-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.02.39-1024×589.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.02.39-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.02.39-1536×884.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.02.39-2048×1178.png 2048w" sizes="(max-width: 2143px) 100vw, 2143px" /></p>
<p><b>USDJPY Bias: Bullish above 106.75 Bearish below</b></p>
<p><span>USDJPY From a technical and trading perspective, as 106.75 supports there is a window for price to extend higher to test the equality objective at 108.13, watch for bearish reversal patterns in this area to see another test of 106 enroute to a pivotal 105 test</span></p>
<p><img class="aligncenter size-full wp-image-46281" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.03.02.png" alt="" width="2150" height="1239" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.03.02.png 2150w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.03.02-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.03.02-1024×590.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.03.02-768×443.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.03.02-1536×885.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.03.02-2048×1180.png 2048w" sizes="(max-width: 2150px) 100vw, 2150px" /></p>
<p><b>AUDUSD Bias: Bullish above .6830 targeting .7150)</b></p>
<p><span>AUDUSD From a technical and trading perspective, after the rejection from above the .7050 level and the subsequent failure to hold .6900 as support, anticipate a test of the corrective equality objective back to .6650. Only a close back through .6910 would reignite bullish spirits suggesting the current correction is complete opening another run to test offers and stops above .7050 UPDATE As discussed in last week’s Chart Hit as .6830 attracts buyers there remains scope to retest and break prior cycle highs en route to a .7150 test. UPDATE failure to defend .6830 today will open a downside equality objective sighted at .6700</span></p>
<p><img class="aligncenter size-full wp-image-46282" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.03.29.png" alt="" width="2151" height="1237" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.03.29.png 2151w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.03.29-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.03.29-1024×589.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.03.29-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.03.29-1536×883.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-01-08.03.29-2048×1178.png 2048w" sizes="(max-width: 2151px) 100vw, 2151px" /></p>
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