On Saturday, U.S. President Donald Trump signed executive actions to extend economic aids to Americans affected by the coronavirus pandemic after negotiations at Congress broke down. The aids include jobless benefits at $400 per week.
USD Will Struggle to Shrug off Downtrend, CBA Says. The divergent outlook between the U.S. economy and the rest of the world is a weight on USD. Intermittent surges in U.S.–China tensions can support the USD temporarily. But CBA says it doubts that any flare ups will be enough to offset the USD’s well-established downward trend. U.S. economic data could also spark some volatility. U.S. retail sales and industrial production data on Friday will show some recovery for July, but at a more moderate pace. Elevated coronavirus infections and partial state lockdowns disrupted the U.S. economic recovery in July.
U.S. official data showed that the labor market continued to improve in July despite a surge in coronavirus cases. Nonfarm payrolls increased by 1.76 million, higher than an addition of 1.48 million expected, and the jobless rate fell to 10.2% (10.6% expected).
👉 The US dollar index (USDX) recovered Friday on the upbeat payroll report (1.76 million vs 1.5 million expected) and closed above the 5-day EMA for the first time since late June. The yield on 10-year Treasuries rose 0.56%.
👉 EUR dipped to 1.1780 in Asian trading following the sell-off Friday, supported by the 10-day EMA. GBP opened lower Monday and dropped to 1.3045. USD/JPY traded at 105.91.
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👉 AUD edged lower to 0.7150 in early trading after a seven-week winning streak, with Australia reporting the record daily death since the virus outbreak. NZD weakened to 0.6592. USD/CAD extended the gain to 1.3388.
👉 Gold extended the losses to $2025 Monday following the ninth consecutive weekly gain, which brought the yellow metal to a new record high of $2075. Silver retreated from a seven-year high to $28. WTI crude (XTIUSD) traded at $41.48.
As we have observed earlier in the Currency Monitoring Chart, we discovered that CHF/JPY lines are separated with the farthest distance.
INTRADAY MARKET INSIGHTS
USD/JPY Intraday:
The pair keeps trading at levels around the descending 20-day moving average, which stands below the 50-day one. And the relative strength index has not yet recovered the neutrality level of 50, suggesting a lack of upward momentum for the pair. Unless the key resistance at 108.15 is surpassed, the pair is expected to return to 104.15 and 102.40 on the downside.
1st support – 104.15 (major)
1st resistance – 108.15 (major)
2nd support – 102.40 (moderate)
2nd resistance – 109.65 (moderate)
EUR/USD Intraday:
The pair is holding on the upside and is supported by a rising 20-day moving average. Even though a continuation of the consolidation cannot be ruled out, its extent should be limited by a support level at 1.1490. To sum up, as long as this key level is not broken, expect another upside with targets at 1.2000 and 1.2150 in extension. Alternatively, a break below 1.1490 would call for a drop with 1.1380 and 1.1250 as targets.
1st support – 1.1490 (major)
1st resistance – 1.2000 (moderate)
2nd support – 1.1380 (minor)
2nd resistance – 1.2150 (moderate)
AUD/USD Intraday:
The technical outlook of the pair is positive as the prices are supported by a rising trend line drawn from June. The rising 50-day moving average is also acting as support now. Therefore, unless the support level at 0.7000 is violated, the pair should reach 0.7300 and 0.7390 on the upside. Alternatively, a break below 0.7000 would bring a return with 0.6835 and 0.6650 as targets.
1st support – 0.7000 (major)
1st resistance – 0.7300 (moderate)
2nd support – 0.6835 (minor)
2nd resistance – 0.7390 (moderate)
NZD/USD intraday:
Despite the pair posting a pullback, it is still supported by a rising 50-day moving average. The relative strength index is around its neutrality level at 50, suggesting the lack of downward momentum for the prices. Therefore, as long as 0.6500 acts as the support level, expect a rise with targets at 0.6730 and 0.6815 in extension. In an alternative scenario, crossing below 0.6500 would call for a return with 0.6370 and 0.6265 as targets.
1st support – 0.6500 (major)
1st resistance – 0.6730 (moderate)
2nd support – 0.6370 (major)
2nd resistance – 0.6815 (moderate)
GBP/USD Intraday:
The pair keeps trading within a consolidation range after a recent rally. Currently, the 20-day moving average has moved further above the 50-day one, and the relative strength index stands firmly in the 60s, signaling a bullish bias. Unless the key support at 1.2670 is violated, the pair should target 1.3205 and 1.3515 on the upside. Alternatively, below 1.2670, expect a pull-back to 1.2470.
1st support – 1.2670 (major)
1st resistance – 1.3205 (major)
2nd support – 1.2470 (moderate)
2nd resistance – 1.3515 (major)
USD/CHF Intraday:
The pair is trading within a bearish descending triangle pattern. In fact, it is capped by the declining 20-day moving average, which stays below the 50-day one. The relative strength index remains subdued in the 30s, indicating continued downward momentum. Below the key resistance at 0.9270, expect a drop to 0.9040 and 0.8940. Alternatively, a break above 0.9270 would trigger a rebound to 0.9365.
1st support – 0.9040 (major)
1st resistance – 0.9270 (major)
2nd support – 0.8940 (moderate)
2nd resistance – 0.9365 (major)
USD/CAD Intraday:
The pair is capped by a bearish trend line drawn from March. Currently, it remains trading below the 50-day moving average, while the relative strength index stays below the neutrality level of 50, suggesting a bearish bias. As long as the key resistance at 1.3515 holds, the pair should proceed to 1.3230 and 1.3100 on the downside. Alternatively, above 1.3515, expect a rebound to 1.3720.
1st support – 1.3230 (major)
1st resistance – 1.3515 (major)
2nd support – 1.3100 (major)
2nd resistance – 1.3720 (major)
EUR/JPY Intraday:
Rebound. The pair has stabilized after reaching the lower boundary of a bullish trend line drawn from July 19. In fact, the 20-period moving average is skewing upward, while the relative strength index has shown a bullish divergence. As long as the key support at 124.41 holds, the pair should rebound to 125.11 and 125.28. Alternatively, a break below 124.41 would open a path to 124.13 on the downside.
EUR/GBP Intraday:
Target 0.9075. The pair maintains a bullish bias above the key support at 0.9004. Currently, it is hovering around both the 20-period and 50-period moving averages, while the relative strength index shows a lack of downward momentum. Unless the key support at 0.9004 is violated, the pair should target 0.9060 and 0.9075 on the upside. Alternatively, below 0.9004, expect a decline to 0.8978.
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