19th June 2020 - Pandemic fears keep weighing the trading sentiment…


Good Morning,


Market Headlines

BOE announced its intention to increase QE program by an additional GBP100bn (total now GBP745bn), benchmark Bank Rate unchanged at 0.10%. US Philly Fed manufacturing data surprised markets having surged to +27.5 (vs est. -21) from -43.1 in May. US Employment data came in worse than expected coupled with a worrying trend in infection rates in some US states pushed risk assets slightly lower overnight with both the S&P 500 and the Dow Jones finishing 0.3% lower while the NASDAQ gained 0.3%. Oil bucked the trend and finished up 2.3% on the day while US yields were flat.


Currencies

- The US dollar rose by 0.3% (two-week high)

- EUR ranged between 1.1260 to 1.1186.

- GBP dropped from 1.2550 to 1.2402, as the BoE maintained a dovish overall bias.

- USD/JPY ranged between 106.70 and 107.15.

- AUD ranged between 0.6900 to 0.6836.

- NZD traded between 0.6465 to 0.6419.

- AUD/NZD slipped further from 1.0680 to 1.0635.


AUD Thoughts

- AUD/USD struggles to keep the bounce from a three-day low of 0.6835.

- Florida and Texas and Beijing in virus concerns, Germany, Portugal also keep fears of wave 2.0 alive.

- Equities dwindle amid mixed data and geopolitical tension.

- A light calendar keeps the Aussie at the mercy of qualitative catalysts.


One-week-old falling trend line favours the AUD/USD pair to keep the weakness after breaking monthly support, now resistance. The downbeat sentiment also takes clues from the

moving average convergence/divergence (MACD) histogram that posts the strongest bearish signals since late-March. Even so, 21-day simple moving average (SMA) near 0.6810 can offer immediate support to the quote ahead of dragging it to near 0.6665, comprising 200-day SMA. Meanwhile, buyers will wait for a clear break above 0.6930 for fresh entries while targeting 0.7000 threshold.


Event Risk Data Today

- Australia: May’s preliminary retail trade has expectations for a strong bounce back of 12.0% after April’s 17.7% slump.


- Japan: CPI reading for May expected for no change in consumer prices versus a year ago as they remain on the cusp of deflation.


- UK: May retail sales expectations to be positive, with early signals of recovery in preliminary industry data.


- US: FED Chair Powell and other members (03:00 AEST), Rosengren (00:15 AEST) and Quarles (02:00 AEST) will speak at separate events.

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