Daily Market Outlook, July 17, 2020

<h2><span>Daily Market Outlook, July 17, 2020 </span></h2>
<p><span><strong>Market sentiment was mixed during the Asian trading session,</strong> weighed in part by ongoing pandemic concerns including record numbers of fatalities reported in Florida and Texas as well as more than 2 million cases in Brazil. Comments from US Federal Reserve policymakers were also cautious, including Atlanta Fed President Raphael Bostic who said that weekly jobless claims seem to be levelling off at a high level. </span></p>
<p><span><strong>June housing starts and permits figures and the preliminary July University of Michigan consumer sentiment survey are the main releases today</strong>. Both industrial production and retail sales for June increased for a second month in data released earlier this week. We expect improvements to be evident in the housing market as well in today’s numbers, and have pencilled in month-on-month rises of 20% and 10% for housing starts and permits, respectively. Markets, however, will probably focus on the University of Michigan survey for potential signs that rising Covid-19 cases in southern parts of the US may be starting to affect sentiment. Look for headline consumer sentiment index to edge down to 75.0 in July from 78.1. The consensus forecast, though, is for a small increase to 79.0. </span></p>
<p><span><strong>In Europe, EU leaders will meet physically in Brussels for a two-day Special European Council to discuss the Multiannual Financial Framework</strong> (long-term EU budget for 2021-27) and the proposed €750bn Recovery Fund in response to Covid-19. The latter needs to be approved unanimously, but reports suggest differences between countries remain. The current proposals mean that most of the funds will be given to countries as grants rather than loans. The so-called ‘frugal four’ (Austria, Denmark, the Netherlands and Sweden) favour a higher proportion of funds to be given as loans.  </span></p>
<p><span><strong>BoE Governor Andrew Bailey is scheduled to speak on a webinar at 11am</strong>. For the Eurozone, construction output figures for May are due, as is final June CPI inflation which is expected to confirm the preliminary ‘flash’ release showing a slight uptick to 0.3%y/y but remaining well below the ECB’s goal. There are scheduled appearances from ECB Executive Board member Isabel Schnabel and Vice President Luis de Guindos, both at 9.30am.</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</span><b>.1300 (1BLN), </b><span>1.1350-60 (425M), 1.1375 (300M), 1.1400 (678M)</span></li>
<li><span>USDJPY: </span><b>106.00 (1BLN)</b><span>, 106.90-107.00 (600M), 107.50 (330M), 108.00 (500M)</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>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><span> UPDATE price is testing prior cycle highs, any profit taking pullback should find support at 1.13 ahead of the anticipated 1.15 test.UPDATE <a href="https://www.youtube.com/watch?v=67rvzJ-hiAE&amp;feature=youtu.be">as discussed in yesterday&#8217;s live market analysis session the anticipated buy the rumour sell the fact pattern is playing out</a></span></p>
<p><img class="aligncenter size-full wp-image-47257" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.32.59.png" alt="" width="2156" height="1206" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.32.59.png 2156w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.32.59-300×168.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.32.59-1024×573.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.32.59-768×430.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.32.59-1536×859.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.32.59-2048×1146.png 2048w" sizes="(max-width: 2156px) 100vw, 2156px" /></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 UPDATE a close through 1.26 will flip the daily chart bullish and open 1.28, a failure to sustain trade above 1.26 opens a retest of 1.24 before higher</span></p>
<p><img class="aligncenter size-full wp-image-47258" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.33.18.png" alt="" width="2153" height="1199" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.33.18.png 2153w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.33.18-300×167.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.33.18-1024×570.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.33.18-768×428.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.33.18-1536×855.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.33.18-2048×1141.png 2048w" sizes="(max-width: 2153px) 100vw, 2153px" /></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-47259" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.33.40.png" alt="" width="2153" height="1198" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.33.40.png 2153w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.33.40-300×167.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.33.40-1024×570.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.33.40-768×427.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.33.40-1536×855.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.33.40-2048×1140.png 2048w" sizes="(max-width: 2153px) 100vw, 2153px" /></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-47260" src="http://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.34.11.png" alt="" width="2152" height="1205" srcset="https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.34.11.png 2152w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.34.11-300×168.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.34.11-1024×573.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.34.11-768×430.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.34.11-1536×860.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/07/Screenshot-2020-07-17-08.34.11-2048×1147.png 2048w" sizes="(max-width: 2152px) 100vw, 2152px" /></p>
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