• EURUSD broke resistance zone
• Likely to rise to 1.1300
#WaveAnalysis
https://fxpro.news/market-snapshots/eurusd-wave-analysis-2-june-2020-20200602/
• Likely to rise to 1.1300
#WaveAnalysis
https://fxpro.news/market-snapshots/eurusd-wave-analysis-2-june-2020-20200602/
• CADJPY broke resistance zone
• Likely to rise to 81.00
#WaveAnalysis
https://fxpro.news/market-snapshots/cadjpy-wave-analysis-2-june-2020-20200602/
• Likely to rise to 81.00
#WaveAnalysis
https://fxpro.news/market-snapshots/cadjpy-wave-analysis-2-june-2020-20200602/
A healthy USD decline?
With a few exceptions, weakening of the U.S. currency is a normal state of healthy markets, which makes one believe that this trend will continue.
The markets are optimistic, suggesting a V-shaped economic recovery as we can see on the charts of stock indices and AUDUSD pair and 2-years trend reversal for EURUSD.
Currencies of large emerging countries follow the suite: the RUB jumped by 12% over two months, while ZAR – by 10%.
We saw the same thing earlier this year when the S&P 500 climbed to new heights in January amid a burgeoning epidemiological disaster. The same can be said about the currency market, where technical indicators show that the dollar is oversold compared to a vast number of currencies from AUD, EUR and CAD to RUB and ZAR.
With a few exceptions, weakening of the U.S. currency is a normal state of healthy markets, which makes one believe that this trend will continue.
The markets are optimistic, suggesting a V-shaped economic recovery as we can see on the charts of stock indices and AUDUSD pair and 2-years trend reversal for EURUSD.
Currencies of large emerging countries follow the suite: the RUB jumped by 12% over two months, while ZAR – by 10%.
We saw the same thing earlier this year when the S&P 500 climbed to new heights in January amid a burgeoning epidemiological disaster. The same can be said about the currency market, where technical indicators show that the dollar is oversold compared to a vast number of currencies from AUD, EUR and CAD to RUB and ZAR.
Germany still losing jobs despite softer lockdown
German Employment data for May again emphasized that the labour market remains under pressure, despite a business activity indicators turn to the growth and a notable relaxation of quarantine restrictions. In May, unemployment increased by another 238K after a jump of 372K a month earlier. The unemployment rate rose to 6.3%, the highest level in five years.
Compared to the United States (even with the correction that Germany has four times fewer people), the situation looks sharply better, according to which we often hear about the loss of 40 million jobs in three months. But in economics, one series is often compared to itself. And here is an alarming situation.
Germany's labour market has got new 310K unemployed for seven months to June 2009, and that year GDP fell by 5.6%. Now in two months, the growth of the unemployed is almost twice as big.
German Employment data for May again emphasized that the labour market remains under pressure, despite a business activity indicators turn to the growth and a notable relaxation of quarantine restrictions. In May, unemployment increased by another 238K after a jump of 372K a month earlier. The unemployment rate rose to 6.3%, the highest level in five years.
Compared to the United States (even with the correction that Germany has four times fewer people), the situation looks sharply better, according to which we often hear about the loss of 40 million jobs in three months. But in economics, one series is often compared to itself. And here is an alarming situation.
Germany's labour market has got new 310K unemployed for seven months to June 2009, and that year GDP fell by 5.6%. Now in two months, the growth of the unemployed is almost twice as big.
ADP paint brighter US jobs picture ahead of NFP
The ADP reported a drop in US private sector employment by 2.76M in May (vs -9.00M expected). According to this estimate, the total jobs number fell below 107M and is already below the lowest point after the global financial crisis.
Separation by industry noted the largest decline in trade and transportation services (-826K) and manufacturing (-719K).
For global demand for risky assets, it is positive that the overall decline is significantly smaller than expected. It is also worth considering that this report contains data before May 12th. It is consistent with the estimated period for Friday’s official NFP statistics. Still, it may turn out to be significantly worse than the real picture as in the second half of May many states seriously relaxed coronavirus restrictions.
The ADP reported a drop in US private sector employment by 2.76M in May (vs -9.00M expected). According to this estimate, the total jobs number fell below 107M and is already below the lowest point after the global financial crisis.
Separation by industry noted the largest decline in trade and transportation services (-826K) and manufacturing (-719K).
For global demand for risky assets, it is positive that the overall decline is significantly smaller than expected. It is also worth considering that this report contains data before May 12th. It is consistent with the estimated period for Friday’s official NFP statistics. Still, it may turn out to be significantly worse than the real picture as in the second half of May many states seriously relaxed coronavirus restrictions.
Over the last day, 121.4K new cases of COVID-19 were detected worldwide vs 115.2K day earlier and 106.5K a week ago. The number of recovered was 153.7K (107.2K). The total number of cases is 6.57M, of which 3.01M is active, 3.17M recovered, and 388.0K died. The five countries with the highest daily growth are Brazil (27.3K), the US (20.6K), India (9.6K), Russia (8.5K), Chile (4.9K). Over the week, the share of the US has declined from 30.2% to 28.9%, Spain - from 4.9% to 4.37%, the UK - from 4.61% to 4.26%. The share of Brazil increased from 7.16% to 8.89%, Russia - from 6.40% to 6.58%, India - from 2.74% to 3.3%.
EURJPY rising inside sharp C-wave
Likely to rise to 123.00
#WaveAnalysis
https://fxpro.news/market-snapshots/eurjpy-wave-analysis-3-june-2020-20200603/
Likely to rise to 123.00
#WaveAnalysis
https://fxpro.news/market-snapshots/eurjpy-wave-analysis-3-june-2020-20200603/
High market optimism makes growth fragile
The difference between expectations and facts drives markets. Recently, market participants’ expectations look very optimistic, which increases the fragility of growth. Firstly, stock buyers are impressed by relatively strong employment in Europe and the US. But it continues to decline at a pace that exceeds the worst moments of the global financial crisis, despite the lifting of restrictions.
In Europe, market participants are preparing for more support from the ECB later today. These plans for the easing of the central bank’s policy, as well as massive and rapid programs to help businesses in Europe, are already virtually priced in the stock index quotations. However, Europe has repeatedly delayed the launch of plans due to internal disagreements and bureaucracy.
Often, the currency market is alarmed a little bit earlier than the stock market. And in the morning we are witnessing the dollar strengthening against a wide range of currencies.
The difference between expectations and facts drives markets. Recently, market participants’ expectations look very optimistic, which increases the fragility of growth. Firstly, stock buyers are impressed by relatively strong employment in Europe and the US. But it continues to decline at a pace that exceeds the worst moments of the global financial crisis, despite the lifting of restrictions.
In Europe, market participants are preparing for more support from the ECB later today. These plans for the easing of the central bank’s policy, as well as massive and rapid programs to help businesses in Europe, are already virtually priced in the stock index quotations. However, Europe has repeatedly delayed the launch of plans due to internal disagreements and bureaucracy.
Often, the currency market is alarmed a little bit earlier than the stock market. And in the morning we are witnessing the dollar strengthening against a wide range of currencies.
AUDNZD reversed from key resistance zone
Likely to fall to 1.0700
#WaveAnalysis
https://fxpro.news/market-snapshots/audnzd-wave-analysis-3-june-2020-20200603/
Likely to fall to 1.0700
#WaveAnalysis
https://fxpro.news/market-snapshots/audnzd-wave-analysis-3-june-2020-20200603/
Attractive Ethereum
Ethereum (ETH) has grown by almost 20% over the week, and the technical picture is very favourable for the leading altcoin. The Ethereum has been trading around highs since February, bouncing back from global lows around $80 in March.
The WhaleAlert channel showed a withdrawal of 700,000 ETH from the Bithumb exchange. The ETH deficit is created naturally by keeping coins in decentralised financial applications, but the whales can help this process by withdrawing their assets from circulation.
Also, Glassnode found out that the blockchain showed the maximum number of active coins for three months. The number of wallets with a balance greater than 10 ETH is at a historic high ($275 million), while the number of wallets with a non-zero balance is increasing.
Ethereum (ETH) has grown by almost 20% over the week, and the technical picture is very favourable for the leading altcoin. The Ethereum has been trading around highs since February, bouncing back from global lows around $80 in March.
The WhaleAlert channel showed a withdrawal of 700,000 ETH from the Bithumb exchange. The ETH deficit is created naturally by keeping coins in decentralised financial applications, but the whales can help this process by withdrawing their assets from circulation.
Also, Glassnode found out that the blockchain showed the maximum number of active coins for three months. The number of wallets with a balance greater than 10 ETH is at a historic high ($275 million), while the number of wallets with a non-zero balance is increasing.
ECB boosts EUR for now but hurts its potential
The ECB has expanded the package of support measures by 600B euro (750B expected) to 1350B. The remaining parameters of the monetary policy are unchanged.
This release returned the euro to growth. EURUSD jumped from 1.1200 to 1.1270. The single currency is growing against the dollar for the 9th day in a row, adding 3.7% during this time.
Interesting that the EURUSD dynamics are very similar to the movements of 2008/09, but in a much more compressed form: what took weeks then, now only took days. Both then and now, risk aversion has caused pressure on EURUSD. The recovery of EURUSD then continued until the end of 2009, until the first signs of debt problems in Greece, which undermined confidence in the euro.
The ECB has expanded the package of support measures by 600B euro (750B expected) to 1350B. The remaining parameters of the monetary policy are unchanged.
This release returned the euro to growth. EURUSD jumped from 1.1200 to 1.1270. The single currency is growing against the dollar for the 9th day in a row, adding 3.7% during this time.
Interesting that the EURUSD dynamics are very similar to the movements of 2008/09, but in a much more compressed form: what took weeks then, now only took days. Both then and now, risk aversion has caused pressure on EURUSD. The recovery of EURUSD then continued until the end of 2009, until the first signs of debt problems in Greece, which undermined confidence in the euro.
Rally of world markets stopped on Thursday in anticipation of new signals. Separately, many factors may put pressure on the British pound. We see signs of slipping negotiations between the EU and Britain on the parameters of Brexit.
Moreover, friction between China and the UK has intensified. All these factors were in the game before but did not prevent the pound from growing against the dollar. However, buyers' alertness increased the price to 1.2600, an important short-term resistance level. Touching this mark caused GBPUSD to reverse in April and May.
It is possible that we see only a slight respite, and the markets will soon be able to brush aside alarming macroeconomic data and regression in trade negotiations. But, in our opinion, the chances of a corrective rollback or slipping of both global markets and the British currency are much higher.
Moreover, friction between China and the UK has intensified. All these factors were in the game before but did not prevent the pound from growing against the dollar. However, buyers' alertness increased the price to 1.2600, an important short-term resistance level. Touching this mark caused GBPUSD to reverse in April and May.
It is possible that we see only a slight respite, and the markets will soon be able to brush aside alarming macroeconomic data and regression in trade negotiations. But, in our opinion, the chances of a corrective rollback or slipping of both global markets and the British currency are much higher.
American Express broke round resistance level 100,00
Likely to rise to 108,700
#WaveAnalysis
https://fxpro.news/market-snapshots/american-express-wave-analysis-4-june-2020-20200604/
Likely to rise to 108,700
#WaveAnalysis
https://fxpro.news/market-snapshots/american-express-wave-analysis-4-june-2020-20200604/
Soy broke resistance level 860.00
Likely to rise to 870.00 and 890.00
#WaveAnalysis
https://fxpro.news/market-snapshots/soy-wave-analysis-4-june-2020-20200604/
Likely to rise to 870.00 and 890.00
#WaveAnalysis
https://fxpro.news/market-snapshots/soy-wave-analysis-4-june-2020-20200604/
Over the last day, 129.9K new cases of COVID-19 were detected worldwide vs 121.4K day earlier and 116.3K a week ago. The number of recovered was 80.3 (153.7K). The total number of cases is 6.70M, of which 3.06M is active, 3.25M recovered, and 393.2K died. The five countries with the highest daily growth are Brazil (31.9K), the US (22.7K), India (9.9K), Russia (8.8K), Pakistan (4.8K). Stringent quarantine measures in India were not enough to contain the spread. Globally, the number of closed cases is 54.4%, exceeding half this week. The proportion of deaths also continues to decline.
Where’s oil going?
After a short stalling earlier this week, the oil managed to return to growth, once again overcoming the important round level of $40 per barrel of Brent. On a wave of optimism, Brent quotes may return to $45, offsetting the decline of the price during the wars between Russia and Saudi Arabia in March. However, further on, the overhang of huge reserves and economic contraction promise to become an insurmountable obstacle to the growth of prices.
This time Russia and Saudi Arabia were fierce supporters of meeting quotas and jointly promoted the idea of extending the period of lowest oil production by 1-2 months.
In addition to the unity of the two leaders of OPEC+, oil was also helped by the U.S. data. They showed a decline in drilling activity and a drop in production. American production continues to decline, dropping last week to 11.2 mln bpd, the lowest level since October 2018.
After a short stalling earlier this week, the oil managed to return to growth, once again overcoming the important round level of $40 per barrel of Brent. On a wave of optimism, Brent quotes may return to $45, offsetting the decline of the price during the wars between Russia and Saudi Arabia in March. However, further on, the overhang of huge reserves and economic contraction promise to become an insurmountable obstacle to the growth of prices.
This time Russia and Saudi Arabia were fierce supporters of meeting quotas and jointly promoted the idea of extending the period of lowest oil production by 1-2 months.
In addition to the unity of the two leaders of OPEC+, oil was also helped by the U.S. data. They showed a decline in drilling activity and a drop in production. American production continues to decline, dropping last week to 11.2 mln bpd, the lowest level since October 2018.
An unexpected increase in US jobs!
US BLS reported that the economy created 2.5 million new jobs in May, that sharply contrasts with the expected slump by 7.5 million. This massive gap between expectations and fact shows how much the economic analysts underestimate how fast the economy can turn from contraction. We saw the same in China earlier in March.
The return to normal must occur not only in the number of people receiving a wage. The participation rate jumped, while average weekly hours reached a record 34.7. Even a drop in average earnings is a good sign as it reflects the return to work of low-paid employees.
America turns back to a more normal life. But the question remains, will it come to living fully in the coming months? Now the US employment is 19.5 million or 13% below the February peak. The total weekly payrolls are 10% lower than height, which is temporarily offset by checks from Trump and various programs. But most of these measures are short-term, if not just one-time.
US BLS reported that the economy created 2.5 million new jobs in May, that sharply contrasts with the expected slump by 7.5 million. This massive gap between expectations and fact shows how much the economic analysts underestimate how fast the economy can turn from contraction. We saw the same in China earlier in March.
The return to normal must occur not only in the number of people receiving a wage. The participation rate jumped, while average weekly hours reached a record 34.7. Even a drop in average earnings is a good sign as it reflects the return to work of low-paid employees.
America turns back to a more normal life. But the question remains, will it come to living fully in the coming months? Now the US employment is 19.5 million or 13% below the February peak. The total weekly payrolls are 10% lower than height, which is temporarily offset by checks from Trump and various programs. But most of these measures are short-term, if not just one-time.