Daily Market Outlook, July 10, 2020
<h2><span>Daily Market Outlook, July 10, 2020 </span></h2>
<p><span><strong>Market sentiment has turned more risk averse heading into the weekend.</strong> Asian equity markets are generally down today following declines yesterday in Europe and the US. In particular Chinese stocks, which have surged of late, recorded their first fall in nine days. Concerns about a continuing rise in Covid-19 cases and deteriorating US-China relations have been cited as reasons for the moves. In Australia, Victoria announced an Aus$534bn support package in light of the latest lockdown in Melbourne. The State Treasure said it could take 2½ years for the economy to recover. </span></p>
<p><span><strong>In the US, Federal Reserve policymaker Bostic said that he did not see the US economy returning to its pre-crisis level “until mid-2021 or maybe later into 2022”</strong> but he did see “more jobs and more growth” by the end 2020. He also added that fiscal support was important for the recovery. The IMF chief economist said she saw tremendous uncertainty for the global economy. </span></p>
<p><span><strong>In the UK, beauty services will be allowed to re-open from 11th July and gyms and other leisure facilities from 25th July.</strong> Meanwhile, some media sources are reporting that the UK will opt out of the EU ‘vaccine strategy’ over concerns that Brussels will limit the number of doses available to the UK. </span></p>
<p><span><strong>Today’s data calendar is very thin with nothing of note in the UK</strong>. In the Eurozone, Italian industrial production for May is expected to post a sizable rise reflecting the easing in lockdown restrictions. Already released data showed decent monthly gains in Germany and Spain. The outturn for the Eurozone as a whole is due Tuesday. US producer price inflation for June is predicted to see a modest acceleration. Look for a monthly rise in the headline rate of 0.4%, primarily due to the rebound in oil prices, and a more modest rise in ‘core’ inflation of 0.2%. Even after today’s expected gains producer price inflation will still be exceptionally low reflecting a general lack of inflationary pressures. Such outturns will do nothing to shift the US Federal Reserve away from its current stance that monetary policy should be focused on supporting economic growth. </span></p>
<p><span><strong>This weekend US President Trump will attempt to kick start his re-election campaign with a rally in New Hampshire</strong>. With opinion polls suggesting that his Democratic challenger, Joe Biden, is currently in the lead, the President will want a better turnout than for his previous rally in Oklahoma. As there is now only about four months to go until election day the potential outcome is likely to become an increasing focus for markets.</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 (1.1BLN), 1.1300-10 (1BLN)</b></li>
<li><span>USDJPY: 107.15 (800M), 107.25 (320M), 108.00 (600M)</span></li>
<li><span>GBPUSD: 1.2420 (233M)</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>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. Price is testing intraday range resistance at 1.13 A failure to close above here could see a move back to test range support at 1.12 before attempting another run at 1.1350 UPDATE 1.13 back in play through here opens 1.1340 ahead of 1.14 daily VWAP bullish. UPDATE testing range resistance, supply here could see a pullback to 1.12 before another basing 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 over the next fortnight.</span></a></p>
<p><img class="aligncenter size-full wp-image-46858" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.37.15.png" alt="" width="2139" height="1234" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.37.15.png 2139w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.37.15-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.37.15-1024×591.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.37.15-768×443.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.37.15-1536×886.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.37.15-2048×1182.png 2048w" sizes="(max-width: 2139px) 100vw, 2139px" /></p>
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<p><b>GBPUSD Bias: Bullish above 1.24 targeting 1.28</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. The close back through 1.2440 suggests a more meaningful low is in place for another attempt to take out stops above 1.2650. A close back through 1.24 would concern the bullish bias, however as 1.2350 attracts bids there remains an opportunity to test the 1.2650 upside objective UPDATE Target achieved, profit taking pullback possible to retest 1.240 before next leg higher to challenge stops and offers towards 1.28</span></p>
<p><img class="aligncenter size-full wp-image-46856" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.17.48.png" alt="" width="2140" height="1236" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.17.48.png 2140w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.17.48-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.17.48-1024×591.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.17.48-768×444.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.17.48-1536×887.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.17.48-2048×1183.png 2048w" sizes="(max-width: 2140px) 100vw, 2140px" /></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-46859" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.20.23.png" alt="" width="2140" height="1237" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.20.23.png 2140w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.20.23-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.20.23-1024×592.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.20.23-768×444.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.20.23-1536×888.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.20.23-2048×1184.png 2048w" sizes="(max-width: 2140px) 100vw, 2140px" /></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 intraday support</span></p>
<p><img class="aligncenter size-full wp-image-46860" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.21.54.png" alt="" width="2140" height="1235" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.21.54.png 2140w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.21.54-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.21.54-1024×591.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.21.54-768×443.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.21.54-1536×886.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-10-08.21.54-2048×1182.png 2048w" sizes="(max-width: 2140px) 100vw, 2140px" /></p>
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