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23 June 2017                       Daily Analysis

 

Hushed trading, eyes on China banking regulator.

US dollar was little changed on early Friday trading as market participants look ahead for next week’s US inflation related indicators. The dollar index was last quoted around 97.22 against six major currencies. “While the market was able to draw incentives from the Fed last week, there are not a lot of factors for the dollar to move within this week due to the absence of major indicator release and political events,” said Shin Kadota, senior strategist in Tokyo. “However, inflation would likely be the theme that moves currencies next week which will see various US indicators. They will be key as this week’s slump in crude oil has clouded the US inflation outlook.” On the other hand, investors would also keep a close eye on China as high borrowing by some major private firms to buy assets overseas came under scrutiny of the country’s bank regulator. Reports overnight said that China’s banking regulator has asked large lender to check credit risk profiles of several companies that borrowed heavily in US dollar to buy assets abroad. However, details were sparse and there is no immediate indication on the extent of exposure. Against other major peers, euro ticked down 0.03% to $1.1149 while USD/JPY rose 0.04% to 111.38.

 

As for commodities, crude oil price rose 0.33% to $42.88 while market participants look ahead to US rig count figures to monitor if recent plunge in prices would cause a re-evaluation of drilling plans. Likewise, gold price was up 0.21% to $1,250.18 due to higher risk-aversion demand following the report whereby some Chinese companies were under the scrutiny of country’s bank regulator.

 

Today’s Holiday Market Close

Time                       Market                                  Event

N/A

 

Today’s Highlight Events

Time                       Market                                  Event

23:15                     USD                                       FOMC Member Bullard Speaks

00:40                     USD                                       FOMC Member Mester Speaks

02:15                     USD                                       FOMC Member Powell Speaks

 

 

Today’s Highlight Economy Data

Time Nation & Data Previous Forecast Actual
15:30 EUR – German Manufacturing PMI (June) 59.5 59.0
20:30 CAD – Core CPI (MoM) (May) 0.0%
22:00 USD – New Home Sales (MoM) (May) 569K 597K
01:00 Crude Oil – US Baker Hughes Oil Rig Count 747

 

 

GBPUSD

GBPUSD, H4: GBPUSD remained traded within a downward channel while recently closed above the 20-moving average line (red). It is suggested to be traded higher, towards the top level of the channel after a successful closure above the resistance level of 1.2710.

 

Resistance level: 1.2710, 1.2800

Support level: 1.2630, 1.2550

 

 

EURUSD

EURUSD, H4: EURUSD remained traded within a downward channel while recently rebounded from the strong support level of 1.1140. Recent closure above the 20-moving average line (red) suggests EURUSD to advance further up and retest at the resistance level of 1.1170.

 

Resistance level: 1.1170, 1.1190

Support level: 1.1140, 1.1100

 

 

USDJPY

USDJPY, H1: USDJPY remains traded within a downward channel while currently testing at the top level. Both moving average line which continues to narrow upwards suggests higher possibility for a breakout to occur from the top level and signal a change in trend direction to move further upwards thereafter.

 

Resistance level: 111.45, 111.75

Support level: 111.10, 110.80

 

 

CrudeOIL

CrudeOIL, H4: Crude oil price remains traded within a downward channel while recently rebounded from the lower level. Such rebound suggests crude oil price to be traded higher in short-term, towards the resistance level of 43.00. Likewise, long-term trend direction suggests crude oil price to remain traded within a downward channel unless a breakout occur at either side of the channel.

 

Resistance level: 43.00, 44.20

Support level: 42.00, 41.00

 

 

GOLD

GOLD_, H4: Gold price were traded higher after rebounding from the support level of 1247.00. It is suggested to extend its upward momentum after successfully breaking the 23.6 Fibonacci level at 1253.70.

 

Resistance level: 1253.70, 1261.75

Support level: 1247.00, 1240.65

 

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