Daily Market Outlook, July 2, 2020

<h2><span>Daily Market Outlook, July 2, 2020 </span></h2>
<p><span><strong>Market sentiment was mostly positive during the Asian trading session ahead of today’s US labour market report.</strong> Hopes of a Covid-19 vaccine and last night’s FOMC minutes reaffirming policy support may have provided support for risk assets, despite tensions over China’s new national security law in Hong Kong and rising virus cases in parts of the US. The FOMC minutes signalled the potential strengthening of forward guidance, but was less effusive about yield curve control.</span></p>
<p><span><strong>The US June labour market report will be the focus for today,</strong> released ahead of tomorrow’s Independence Day holiday. Nonfarm payrolls last month unexpectedly rebounded by 2.5mln, but that should be seen in the context of a combined fall of 22mln in March and April, look for another rise of 3mln in June, similar to the consensus forecast.</span></p>
<p><span><strong>There is significant uncertainty in the payrolls forecast</strong>, with economists’ predictions varying between rises of 0.5mln to 9mln. The ADP report yesterday revealed a 2.4mln rise in private sector payrolls in June, but it is not clear how good a guide it will be for today’s official number (last month’s ADP figures were revised sharply). Looking ahead, it remains to be seen to what extent renewed Covid-19 cases in parts of the country will affect jobs growth in the coming months.</span></p>
<p><span><strong>Meanwhile, expect the US unemployment rate to fall for a second month to 12.5% from 13.3% in May</strong>. There is uncertainty here as well, because there have been misclassifications of workers in the survey during the pandemic which resulted in unemployment being lower than it should be (as detailed by the Bureau of Labor Statistics). If that is corrected in June, it may lead to a higher unemployment rate than in May.</span></p>
<p><span><strong>Additionally, there will be focus on the latest US weekly jobless claims numbers</strong>, especially with Covid-19 cases on the rise again. We forecast a rise of 1.3mln compared with 1.48mln in the prior week. US trade and factory orders data are also due.</span></p>
<p><span><strong>In the Eurozone, expect the unemployment rate to increase to 7.6% in May from 7.3%.</strong> ECB speakers include Mersch and Schnabel. The early hours of Friday (UK time) sees the release of UK GfK consumer confidence, seen edging up to ‑29 from ‑30, and China’s Caixin services PMI.</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: </span><b>1.1200-10 (1.5BLN), 1.1225-35 (1.1BLN), 1.1250 (2.2BLN)</b><span> 1.1275 (513M), </span><b>1.1300 (2BLN)</b></li>
<li><span>GBPUSD: 1.2450 (600M), 1.2500 (250M)</span></li>
<li><span>AUDUSD: 0.6895 (1.8BLN), 0.6900 (400M), 0.6950 (500M)</span></li>
<li><span>USDJPY: 107.00 (475M), 107.20-30 (750M), 107.50 (1BLN), 107.70 (700M)</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-46361" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.22.35.png" alt="" width="2150" height="1237" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.22.35.png 2150w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.22.35-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.22.35-1024×589.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.22.35-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.22.35-1536×884.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.22.35-2048×1178.png 2048w" sizes="(max-width: 2150px) 100vw, 2150px" /></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 UPDATE as 1.25 caps current advance, potential for a retest of 1.2350 before higher again</span></p>
<p><img class="aligncenter size-full wp-image-46362" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.23.15.png" alt="" width="2146" height="1237" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.23.15.png 2146w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.23.15-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.23.15-1024×590.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.23.15-768×443.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.23.15-1536×885.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.23.15-2048×1181.png 2048w" sizes="(max-width: 2146px) 100vw, 2146px" /></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-46365" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.24.32.png" alt="" width="2153" height="1242" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.24.32.png 2153w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.24.32-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.24.32-1024×591.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.24.32-768×443.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.24.32-1536×886.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.24.32-2048×1181.png 2048w" sizes="(max-width: 2153px) 100vw, 2153px" /></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-46366" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.25.13.png" alt="" width="2145" height="1238" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.25.13.png 2145w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.25.13-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.25.13-1024×591.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.25.13-768×443.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.25.13-1536×887.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-02-08.25.13-2048×1182.png 2048w" sizes="(max-width: 2145px) 100vw, 2145px" /></p>
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