16 July 2020 Morning Session Analysis
Loonie surged over the hawkish statement from BoC.
Canadian dollar rallied on yesterday, buoyed by the hawkish statement from the Bank of Canada on yesterday. According to Monetary Policy Report, the Bank of Canada would maintain its benchmark interest rate at the effective lower bound of 0.25% and vowed to keep rates unchanged until 2023. They reiterated that the liquidity programs which announced since March had reduced the market strains, while successfully boosting the economy growth for Canada. In fact, they noted that after a sharp economic recession in the first half of 2020, the global economic activity is slowly picking up. This return to growth reflects the relaxation of necessary containment measures put in place to slow the spread of the coronavirus, combined with the expansionary fiscal and monetary policy support. The prices of the most commodities, including oil, have also rebound from very low levels. Nonetheless, after the economies are re-opening, the global outlook is extremely uncertain, given the unpredictability of the course of the coronavirus pandemic. Hence, at this time investors would continue to scrutinize the latest updates with regards of the coronavirus development in order to gauge the likelihood movement for the pair. As of writing, USD/CAD depreciated by 0.02% to 1.3505.
In the commodities market, the crude oil price surged 0.05% to $41.16 per barrel as of writing. The oil market was traded higher over the backdrop of the positive oil inventory data on yesterday. According to Energy Information Administration (EIA), the U.S. Crude Oil Inventories declined from the previous reading of 5.654M to -7.493M, better than the market forecast at -2.098M. On the other hand, the gold price surged 0.12% to $1812.00 per troy ounces amid the spiking number of the new coronavirus infections, spurring the risk-off sentiment in the FX market.
Today’s Holiday Market Close
Time Market Event
N/A
Today’s Highlight Events
Time Market Event
19:45 EUR ECB Monetary Policy Statement
20:30 EUR ECB Press Conference
Today’s Highlight Economic Data
| Time | Nation & Data | Previous | Forecast | Actual |
| 10:00 | CNY – GDP (YoY) (Q2) | -6.8% | 2.1% | – |
| 10:00 | CNY – Industrial Production (YoY) (Jun) | 4.4% | 4.7% | – |
| 14:00 | GBP – Average Earnings Index +Bonus (May) | 1.0% | -0.4% | – |
| 14:00 | GBP – Claimant Count Change (Jun) | 528.9K | 250.0K | – |
| 19:45 | EUR – ECB Interest Rate Decision (Jul) | 0.00% | 0.00% | |
| 20:30 | USD – Initial Jobless Claims | 1,314K | 1,250K | |
| 20:30 | USD – Philadelphia Fed Manufacturing Index (Jul) | 27.5 | 20.0 | |
| 20:30 | USD – Core Retail Sales (MoM) (Jun) | 12.4% | 5.0% |
Technical Analysis
DOLLAR_INDX, Daily: Dollar index was traded lower while currently testing the support level at 95.85. MACD which illustrated increasing bearish momentum suggest the index to extend its losses after it successfully breakout below the support level.
Resistance level: 97.55, 98.85
Support level: 95.85, 94.70
GBPUSD, H4: GBPUSD was traded lower following prior retracement from the resistance level at 1.2670. MACD which illustrated diminishing bullish momentum suggest the pair to extend its losses toward support level at 1.2515.
Resistance level: 1.2670, 1.2800
Support level: 1.2515, 1.2340
EURUSD, Daily: EURUSD was traded higher while currently testing the resistance level at 1.1415. MACD which illustrated increasing bullish momentum suggest the pair to extend its gains after it successfully breakout above the resistance level.
Resistance level: 1.1415, 1.1485
Support level: 1.1305, 1.1175
USDJPY, H4: USDJPY was traded lower while currently near the support level at 106.75. MACD which illustrated increasing bearish momentum suggest the pair to extend its losses after it successfully breakout below the support level.
Resistance level: 107.35, 107.95
Support level: 106.75, 106.40
AUDUSD, H4: AUDUSD was traded higher while currently testing the resistance level at 0.7000. However, MACD which illustrated diminishing bullish momentum suggest the pair to be traded lower in short-term as technical correction.
Resistance level: 0.7000, 0.7065
Support level: 0.6925, 0.6850
NZDUSD, H4: NZDUSD was traded higher while currently testing the resistance level at 0.6575. MACD which illustrated increasing bullish momentum suggest the pair to extend its gains after it successfully breakout above the resistance level.
Resistance level: 0.6575, 0.6635
Support level: 0.6510, 0.6465
USDCAD, H4: USDCAD was traded lower while currently testing the support level at 1.3505. However, MACD which illustrated diminishing bearish momentum suggest the pair to be traded higher in short-term as technical correction.
Resistance level: 1.3555, 1.3630
Support level: 1.3505, 1.3430
USDCHF, H4: USDCHF was traded higher following prior breakout above the previous resistance level at 0.9435. MACD which illustrated increasing bullish momentum suggest the pair to extend its gains toward resistance level at 0.9470.
Resistance level: 0.9470, 0.9530
Support level: 0.9435, 0.9375
CrudeOIL, H4: Crude oil price was traded higher while currently testing the resistance level at 41.40. However, MACD which illustrated diminishing bullish momentum suggest the commodity to be traded lower in short-term as technical correction.
Resistance level: 41.40, 43.00
Support level: 39.35, 37.60
GOLD_, H4: Gold price was traded higher while currently testing the resistance level at 1817.20. However, MACD which illustrated diminishing bullish momentum suggest the commodity to be traded lower in short-term as technical correction.
Resistance level: 1817.20, 1845.10
Support level: 1789.60, 1764.75