Daily Market Outlook, June 18, 2020 

<h2><span>Daily Market Outlook, June 18, 2020 </span></h2>
<p><span><strong>Asian equity market performance is mixed with most indices showing little change on the day</strong>. Australian employment fell by 228k in May, while the unemployment rate rose to 7.1% (from 6.4%in April) a 19-year high. US Federal Reserve Chair Powell said the economy was in the early stages of recovery and that policy needed to remain accommodative. He urged Congress not to remove fiscal support too quickly but also continued to express reluctance over using negative interest rates or yield curve control as part of the Fed’s tool kit. </span></p>
<p><span><strong>The Bank of England is expected to announce an increase in its asset purchase programme at today’s policy update</strong>. It will need to do if it plans to continue to add to its net holdings after early July. We expect the Monetary Policy Committee will opt for a £100bn increase, although there has been some speculation about a larger rise. Markets will also be looking for any signs that the BoE plans to change the weekly purchase total from its current level of ~£14bn. UK monetary policy is otherwise expected to be left unchanged. However, the MPC will probably reaffirm the message that it stands ready to offer more support. Unusually for a June meeting there will be a press conference following the announcement. This will be at 13.00BST although the comments are embargoed until 14.30BST. Both those and the minutes of policymakers’ discussions will be scrutinised for indications of what further policy options are being talked about. In particular, whether anything was said about a potential move to negative interest rates. </span></p>
<p><span><strong>US jobless claims data have been trending down since peaking 11 weeks ago</strong>. However, last week’s level was still more than four times the pre-pandemic weekly average. We look for a further drop this week to 1,300k (from 1,542k). The Philadelphia Fed index for June will provide a further indication on the extent to which economic conditions are improving as restrictions ease. Earlier this week the New York equivalent surprised significantly on the upside. </span></p>
<p><span><strong>Early Friday, UK May retail sales data will be watched for a bounce.</strong> Sales fell very sharply in April when lockdowns were in place all the month. Much of retailing continued to be closed for most of May. However, some parts started to open up and anecdotal reports point to initial strong sales. As supermarkets and other stores that have remained open also seem to be doing brisk business we look for a substantial monthly rise of 11%. Meanwhile, May public sector borrowing data will provide further evidence of the impact the pandemic is having on the UK government’s finances.</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>1.1245-60 (1.3BLN)</b></li>
<li><span>GBPUSD: 1.2445-60 (250M)</span></li>
<li><span>USDJPY:</span> <span>106.00 (500M), 106.40-50 (400M), 107.00 (380M), 107.40-50 (700M</span></li>
<li><span>AUDUSD: 0.6925 (580M)</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 UPDATE price continues to consolidate above pivotal support as 1.1170 holds look for a move through 1.13 to initiate a squeeze on newly minted short positions</span></p>
<p><img class="aligncenter size-full wp-image-45517" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.11.11.png" alt="" width="2151" height="1238" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.11.11.png 2151w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.11.11-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.11.11-1024×589.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.11.11-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.11.11-1536×884.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.11.11-2048×1179.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-45518" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.12.03.png" alt="" width="2149" height="1237" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.12.03.png 2149w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.12.03-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.12.03-1024×589.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.12.03-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.12.03-1536×884.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.12.03-2048×1179.png 2048w" sizes="(max-width: 2149px) 100vw, 2149px" /></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-45519" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.12.40.png" alt="" width="2150" height="1236" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.12.40.png 2150w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.12.40-300×172.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.12.40-1024×589.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.12.40-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.12.40-1536×883.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.12.40-2048×1177.png 2048w" sizes="(max-width: 2150px) 100vw, 2150px" /></p>
<p><b>AUDUSD Bias: Bearish below .6900 Bullish above)</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-45520" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.13.28.png" alt="" width="2147" height="1239" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.13.28.png 2147w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.13.28-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.13.28-1024×591.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.13.28-768×443.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.13.28-1536×886.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-18-08.13.28-2048×1182.png 2048w" sizes="(max-width: 2147px) 100vw, 2147px" /></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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