Daily Market Outlook, June 15, 2020 

<h2><span>Daily Market Outlook, June 15, 2020 </span></h2>
<p><span><strong>The recent shift in market sentiment towards risk off has continued to weigh on stocks with most equity indices in the Asia Pacific starting the week lower.</strong> Weaker than expected China data have not helped with industrial production and retail sales releases posting underwhelming rebounds in May. Moreover, reports of a new cluster of Covid-19 cases in Beijing, which have led to the authorities locking down affected areas, has also weighed on sentiment.</span></p>
<p><span><strong>Near-term market sentiment may be driven, at least in part, by Covid-19 data</strong>, but investors will also be watching closely a raft of UK and US data releases this week, as well as central bank policy decisions particularly from the Bank of England and the Bank of Japan.</span></p>
<p><span><strong>In the UK, attention will also be on Brexit headlines</strong>, with high-level talks planned for today between PM Boris Johnson and European Commission President Ursula von der Leyen with the aim of injecting momentum into the stalled negotiations on a future relationship. The video conference comes after the recent rounds of talks between Brexit officials from both sides ended in deadlock. UK PM Johnson is expected to reiterate that the UK stands ready to leave without a deal should one fail to be agreed by the end of the year.</span></p>
<p><span><strong>Data wise, it is a light start to the week with the US Empire State manufacturing survey for June, the only notable release today.</strong> The headline balance is expected to show another sizeable improvement in June, lifting it further away from the all-time low seen in April. However, consensus expectations of a rise to -30, from -48.5, would still be consistent with contracting manufacturing activity across the New York region, albeit at a slower pace than in May.</span></p>
<p><span><strong>Fed members Kaplan and Daly are due to discuss the US economy at separate events.</strong> While both are likely to highlight the prospect of the US economy recovering strongly in the coming months as lockdown measures are eased further, they are also likely to stress that this will require both fiscal and monetary policy to remain extremely loose.</span></p>
<p><span><strong>Overnight, the Bank of Japan is not expected to reveal any new measures but to reflect on those announced already since March</strong>. Meanwhile, early tomorrow morning the start of a busy week of UK data kicks off with the labour market figures for April. These are expected to show a sharp fall in employment and higher unemployment for the single month of April. The headline figures, however, will mask the deterioration to some extent as they cover a rolling three-month period, which we predict will show a 10k fall in employment and a rise in the unemployment rate to 4.3% from 3.9%.</span></p>
<p><span><strong>This week’s snapshot of FX sentiment, as reflected in the CFTC net non-commercial positioning in the major currencies,</strong> shows an increase in the market’s overall bearishness on the USD; the aggregate USD short position, reflected in the major currencies we track, rose USD1.2bn through Tuesday to USD8.8bn, the largest in six weeks. Positioning overall was very mixed and speculative accounts remain reactive in positioning. Volatile market conditions suggest that investors here have been left chasing market trends once again. Speculators boosted net EUR longs significantly, adding more than USD2.2bn to total USD13.6bn—a new high for this move up and the equivalent of 95.6k contracts. This is the biggest net EUR long position since mid2018. Unfortunately, however, the EUR has dropped nearly 1% since Tuesday’s close and freshly-minted net longs are at risk if the EUR continues to retreat.</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>1.1260 (1.5BLN)</b><span>, 1.1265 (300M), 1.1300 (841M) 1.1310-15 (600M), 1.1325 (370M)</span></li>
<li><span>USDJPY: 107.00 (405M), </span><b>107.15-20 (1.1BLN)</b><span>, 108.00 (650M), 108.30 (600M)</span></li>
</ul>
<h3><span>Technical &amp; Trade Views</span></h3>
<p><b>EURUSD Bias: Bullish above 1.170 Bearish below</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. However, it is noteworthy that the daily volume weighted average price has flipped bearish as such a failure to hold support at 1.1170 would open a deeper corrective phase to rest bids back to 1.10</span></p>
<p><img class="aligncenter size-full wp-image-45245" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.00.45.png" alt="" width="2151" height="1179" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.00.45.png 2151w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.00.45-300×164.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.00.45-1024×561.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.00.45-768×421.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.00.45-1536×842.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.00.45-2048×1123.png 2048w" sizes="(max-width: 2151px) 100vw, 2151px" /></p>
<p><b>GBPUSD Bias: Bullish above 1.24 Bearish below</b></p>
<p><span>GBPUSD From a technical and trading perspective, reversal from the 1.28 test last week has gathered steam and now looks poised to test the major ascending trendline support sighted at 1.24, if renewed bids develop here look for a retest of 1.26 from below. A failure to defend the trendline support would be a bearish development opening a move to 1.2250 as the interim downside objective</span></p>
<p><img class="aligncenter size-full wp-image-45246" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.06.45.png" alt="" width="2150" height="1185" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.06.45.png 2150w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.06.45-300×165.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.06.45-1024×564.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.06.45-768×423.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.06.45-1536×847.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.06.45-2048×1129.png 2048w" sizes="(max-width: 2150px) 100vw, 2150px" /></p>
<p><b>USDJPY Bias: Bearish below 1.08 targeting 1.06</b></p>
<p><span>USDJPY From a technical and trading perspective, sharp rejection above 109.50 suggests a return to range trade and a retest of support back to 107 UPDATE target achieved as 108 caps upside attempts bears will play for a test of year to date lows to 106 </span></p>
<p><img class="aligncenter size-full wp-image-45247" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.08.54.png" alt="" width="2152" height="1181" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.08.54.png 2152w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.08.54-300×165.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.08.54-1024×562.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.08.54-768×421.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.08.54-1536×843.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.08.54-2048×1124.png 2048w" sizes="(max-width: 2152px) 100vw, 2152px" /></p>
<p><b>AUDUSD Bias: Bearish below .6900 targeting .6650)</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</span></p>
<p><img class="aligncenter size-full wp-image-45248" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.12.59.png" alt="" width="2153" height="1186" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.12.59.png 2153w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.12.59-300×165.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.12.59-1024×564.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.12.59-768×423.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.12.59-1536×846.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-15-08.12.59-2048×1128.png 2048w" sizes="(max-width: 2153px) 100vw, 2153px" /></p>
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