Daily Market Outlook, July 14, 2020
<h2><span>Daily Market Outlook, July 14, 2020 </span></h2>
<p><span><strong>Asian equity market is generally lower today following the decline yesterday on Wall Street</strong>. US-China political tensions and the rise in Covid-19 cases have been cited as possible reasons. </span><span>German Chancellor Merkel and Italian PM Conte have called for EU unity on an economic stimulus package. </span><span>In Australia, June NAB business confidence rose to 1 (from – 20) to extend a recovery from March’s low to its highest level since January. </span><span>It has been announced that masks will now be mandatory in English shops from 24th July. The British Retail Consortium posted a higher-than-expected rise in June sales of 10.9%y/y. The ONS reported a smaller than forecast rise in May UK GDP of 1.8% (consensus estimate at 5.5%). It represents only a modest rebound from April’s 20.3% decline. Construction (8.2%), manufacturing (8.4%), and services (0.9%) all rose. </span></p>
<p><span><strong>The UK’s Office for Budget Responsibility (OBR) is scheduled to release a report this morning containing three possible scenarios of the economy’s recovery path and fiscal finances outlook.</strong> These are likely to form the basis for possible further fiscal responses to the economic impact of the pandemic. </span></p>
<p><span><strong>In the Eurozone,</strong> previously released data for the largest economies point to a rebound in industrial production in May. We look for a 15% monthly rise reflecting the easing in lockdown restrictions across much of the region. A timelier read on Eurozone activity will be provided by the July German ZEW survey. Expect a second consecutive monthly improvement in the current conditions index to -65.0, although the expectations index may edge down slightly to 60.</span></p>
<p><span><strong>US CPI inflation is expected to have rebounded in June.</strong> Primarily because of the pickup in oil prices, headline inflation is forecast to rise to 0.7%y/y from 0.1% in May. That still very low rate is unlikely to cause the Federal Reserve to move away from previous guidance that monetary policy is set to remain very easy for some time. </span></p>
<p><span><strong>Early on Wednesday the Bank of Japan will give its latest policy update</strong>. No policy changes are expected this time but the BOJ will probably say that further measures to support economic growth remain possible. Also early tomorrow, June UK CPI data are predicted to show annual headline and core inflation unchanged from May at 0.5% and 1.2% respectively. That means inflation continues to run well below the 2.0% target.</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>1.1300 (2.1BLN)</b><span>, 1.1305-10 (650M), </span><b>1.1320-25 (2BLN) 1.1350-55 (1.3BLN)</b></li>
<li><span>USDJPY: 106.50 (411M), 106.75 (605M), 107.00 (200M), 107.60-70 (500M)</span></li>
<li><span>GBPUSD: 1.2500 (256M), 1.2640 (250M)</span></li>
<li><span>AUDUSD: 0.6850-55 (700M), 0.7080 (400M)</span></li>
</ul>
<h3><span>Technical & Trade Views</span></h3>
<p><b>EURUSD Bias: Bullish above 1.1150 targeting 1.15</b></p>
<p><span>EURUSD 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. As 1.1366 contains the upside look for a move to test bids back towards 1.12 before another upside attempt </span><span>NOTE </span><a href="https://www.linkedin.com/feed/update/urn%3Ali%3Aactivity%3A6685831276143886336/"><span>DTCC option reported data shows 40 billion euros evenly spread between 1.1200 and 1.1400 for the week ahead.</span></a></p>
<p><img class="aligncenter size-full wp-image-47020" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.26.31.png" alt="" width="2145" height="1234" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.26.31.png 2145w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.26.31-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.26.31-1024×589.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.26.31-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.26.31-1536×884.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.26.31-2048×1178.png 2048w" sizes="(max-width: 2145px) 100vw, 2145px" /></p>
<p><b>GBPUSD Bias: Bullish above 1.25 targeting 1.28</b></p>
<p><span>GBPUSD From a technical and trading perspective, as 1.25 attracts sufficient demand, look for a grind higher to test offers and stop at 1.28. A closing breach of 1.25 suggests return to range and a test of range support at 1.2250. UPDATE 1.25 test underway a failure to regain 1.26 will open a move to test 1.24.</span></p>
<p><img class="aligncenter size-full wp-image-47021" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.29.15.png" alt="" width="2147" height="1238" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.29.15.png 2147w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.29.15-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.29.15-1024×590.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.29.15-768×443.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.29.15-1536×886.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.29.15-2048×1181.png 2048w" sizes="(max-width: 2147px) 100vw, 2147px" /></p>
<p><b>USDJPY Bias: Bullish above 107.50 Bearish below</b></p>
<p><span>USDJPY From a technical and trading perspective, anticipated test of the equality objective at 108.13 saw bearish reversal patterns, setting up a move for another test of 106 enroute to a pivotal 105 test UPDATE Note three billion worth of expiries at 107.45/55 today. UPDATE 107.50 remains the pivot with more sizeable expiries noted today, through 107.10 opens equality objective at 106.87 UPDATE equality objective achieved as 107.30 caps the upside look for a retest of 106.30’s</span></p>
<p><img class="aligncenter size-full wp-image-47022" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.29.47.png" alt="" width="2146" height="1236" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.29.47.png 2146w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.29.47-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.29.47-1024×590.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.29.47-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.29.47-1536×885.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.29.47-2048×1180.png 2048w" sizes="(max-width: 2146px) 100vw, 2146px" /></p>
<p><b>AUDUSD Bias: Bullish above .6830 targeting .7100)</b></p>
<p><span>AUDUSD From a technical and trading perspective, as 6830 attracts buyers there remains scope to retest and break prior cycle highs en route to a .7100 test. Expect bids towards .6900 to act as support. A closing breach of .6900 opens another test of bullish appetite at .6880</span></p>
<p><img class="aligncenter size-full wp-image-47023" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.30.34.png" alt="" width="2145" height="1235" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.30.34.png 2145w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.30.34-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.30.34-1024×590.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.30.34-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.30.34-1536×884.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-14-08.30.34-2048×1179.png 2048w" sizes="(max-width: 2145px) 100vw, 2145px" /></p>
<p><i><span>Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.</span></i></p>
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