Daily Market Outlook, June 16, 2020 

<h2><span>Daily Market Outlook, June 16, 2020 </span></h2>
<p><span><strong>Asian equity markets are mostly up strongly this morning after a positive end to trading on Wall Street yesterday. However, reports from Yonhap News Agency suggest the North Korean military has bombed inter-Korean liaison office in Kaesong, which is near the border with South Korea. This has led to a pause in risk sentiment.</strong> </span></p>
<p><span><strong>For much of Monday US equities had traded down reflecting reports of an acceleration in Covid-19 cases in the US and China.</strong> However, the Federal Reserve’s announcement that it would buy individual corporate bonds and President Trump’s proposal of a $1trn infrastructure initiative both helped boost the market. Meanwhile, China has re-introduced some travel restrictions within and from Beijing. </span></p>
<p><span><strong>The Bank of Japan left interest rates unchanged at its latest update but expanded its special lending programme.</strong> Minutes of the latest Australian central bank meeting said the downturn may prove shallower than previously expected but that policy would remain supportive.</span></p>
<p><span><strong>Just released data for the UK labour market shows that employment surprisingly rose by 6k in the 3 months to April while the unemployment rate was steady at 3.9%. However, benefit claims rose by 529k in May following an 857k increase in April, which suggests that the unemployment rate will rise next month.</strong>  Job vacancies dropped (by a record 342k) in the three months to May. Wage growth continued to ease with the headline rate up 1.0%y/y in April (from 2.3% previously).   </span></p>
<p><span><strong>Today’s German ZEW survey will provide the first indications of June Eurozone economic activity.</strong> It is forecast to show a rise in current conditions but expectations may edge down after a big rise last month. </span></p>
<p><span><strong>In the US, May retail sales and industrial production will be watched for signs of a rebound as lockdown measures started to be eased in the second half of the month.</strong> As restrictions have been lifted at a varying pace across states the extent to which activity will have picked up for the country as a whole is particularly uncertain. However, we look for a 6.5% monthly rise in retail spending and a 2.5% rebound in industrial production.</span></p>
<p><span><strong>Fed Chair Powell will make his semi-annual testimony to the US Senate Banking Committee today.</strong> As he gave an extensive update on economic conditions, only last week after the Fed’s policy meeting, today’s comments will probably contain little that is new. He is likely to reiterate that economic activity is expected to pick up in the second half of the year, but that there are “considerable risks” along the way.</span></p>
<p><span><strong>Early tomorrow, May UK inflation is expected to show a further decline in annual CPI inflation to 0.5% (from 0.8% in April)</strong>. The drop is principally due to lower energy prices but ‘core’ inflation has also moderated and is below the 2% 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>1.1250 (1BLN), </b><span>1.1300 (700M), 1.1335 (280M), 1.1400 (330M)</span></li>
<li><span>AUDUSD: 0.6920 (320M)</span></li>
<li><span>USDJPY:</span><b> 106.60 (1BLN), </b><span>106.85-90 (440M), 107.00-05 (450M), 107.30 (431M)</span></li>
</ul>
<h3><span>Technical &amp; Trade Views</span></h3>
<p><b>EURUSD Bias: Bullish above 1.1170 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 1.1170/50 would open a deeper corrective phase to rest bids back to 1.10 UPDATE yesterday’s close flipped the daily chart bullish supporting the upside bias </span></p>
<p><img class="aligncenter size-full wp-image-45342" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.21.38.png" alt="" width="2147" height="1238" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.21.38.png 2147w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.21.38-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.21.38-1024×590.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.21.38-768×443.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.21.38-1536×886.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.21.38-2048×1181.png 2048w" sizes="(max-width: 2147px) 100vw, 2147px" /></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-45343" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.24.57.png" alt="" width="2151" height="1240" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.24.57.png 2151w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.24.57-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.24.57-1024×590.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.24.57-768×443.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.24.57-1536×885.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.24.57-2048×1181.png 2048w" sizes="(max-width: 2151px) 100vw, 2151px" /></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-45344" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.25.39.png" alt="" width="2152" height="1239" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.25.39.png 2152w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.25.39-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.25.39-1024×590.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.25.39-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.25.39-1536×884.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.25.39-2048×1179.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-45345" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.26.43.png" alt="" width="2150" height="1236" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.26.43.png 2150w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.26.43-300×172.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.26.43-1024×589.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.26.43-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.26.43-1536×883.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-16-08.26.43-2048×1177.png 2048w" sizes="(max-width: 2150px) 100vw, 2150px" /></p>
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