Personal opinion today:
The Central Bank of China will implement the reduction of the reserve requirement ratio by 0.5% on July 5, and it is estimated that 700 billion yuan will be released. The news will not help improve and determine the market tension. Conversely, the release of large amounts of funds by the central bank will only have the opposite effect. The more relaxing the funds, the greater the liquidity of funds and the speed of currency depreciation. It is estimated that if there is no improvement, Chinese enterprises will develop in the second half of the year.
Manufacturing and exports will be very severe. Not only will the renminbi depreciate further, global currency risks will gradually emerge. Funds will flow into safe-haven assets. Traditionally, the yen and gold are the more common safe-haven assets.
If further capital inflows to asset hedging are achieved, but the US trade war is involved, the US Dollar can hardly be used as a safe-haven asset. At the same time, the U.S. dollar may be affected by the economic damage. Another option may be the Swiss franc.
At 6 pm today, the UK announced the retail sales difference data. At 10:00 pm, the United States announced the June consultation consumer confidence index and the Richmond Fed manufacturing index. At 4:30am the following day, the API group of the United States announce crude inventories, and the oil price will change according to the number of stocks.
Today's proposal:
1.1680/1.1700 resistance
1.1638/1.1611 support
The market expects that the trade war between the United States and China will heat up, and part of the funds will flow into the euro to benefit the euro. On the other hand, this weekend the European Union and the United Kingdom will have a final draft of the Brexit negotiations. It is expected that the two sides will reach a final consensus and prepare for a smooth transition in October. The news anticipates a more positive euro. However, under the European economic uncertainties, pay attention to important resistances such as 1.1750 and 1.1800.
1.3310/1.3335 resistance
1.3275/1.3255 support
The market continued to expect the Bank of England to increase interest rates in August, which is a bullish pound. The euro rose and also supported the pound. The EU summit this weekend and the United Kingdom announced that Brexit will sign a draft and decide to stabilize the UK’s transition plan to Europe. However, short-term pound sterling risks existed and attention was paid to the resistance above 1.33.
0.9865/0.9840 support
0.9935/0.9955 resistance
The trade war between China and the United States heats up, but there are hidden concerns about the economic outlook of the United States. If market funds have the opportunity to choose the Swiss franc as a safe currency, the USD/CHF will likely fall below 0.9780 and test 0.96.
109.70/109.85 resistance
109.20/108.95 Support
The stock market fell, the trade war heated up and other negative market factors, the funds turned to the yen as a hedge. Against the USDJPY, look for 109.20 and 108.95 support. If the stock market falls, there will be an opportunity to test. Short-term US dollar against the yen has the opportunity to fall to 108 levels.
0.7425/07435 resistance
0.7400/0.7385 support
This morning, Australia announced that its consumer confidence index had fallen from its previous value, and copper prices had fallen, which had negatively impacted the Australian dollar. If the US data or copper prices fall tonight, it will further weaken the Australian dollar.
0.6920/0.6935 resistance
0.6882/0.6870 support
The market is watching the New Zealand trade account tomorrow and the RBNZ interest rate decision and monetary policy orientation on Thursday. Investors are cautious. The hourly chart is building the pattern of head and shoulders and right shoulders. If the New Zealand dollar breaks through 0.6920, it will have the opportunity to represent an upward trend.
1.3335/1.3355 resistance
1.3270/1.3250 support
The oil price rebounded and supported the Canadian dollar. However, Canada’s important economic data is weak, and North American trade affects the future industrial exports of Canada. The Canadian dollar’s gains are limited. Concerned about the development of oil prices, how they affect the Canadian dollar. In addition, wait and see more Canadian data performance, and look forward to breaking the short-term upper and lower range pattern.
0.8825/0.8840 resistance
0.8775/0.8755 support
This week's EU summit and the United Kingdom announced the draft of the Brexit white paper on the eve of the pound sterling risks and worries exist, the euro has a chance to rise against the pound. Short-term estimates will explore resistance above 0.8825. However, risk management must be maintained to prevent a reversal of the trend.
1.1565/1.1585 resistance
1.1525/1.1505 support
The euro rebounded against the Swiss franc and went up to 1.1565 resistance. The Swiss franc has a chance to become a safe-haven asset, Swiss franc rebounded and the euro fell. Therefore, risk management must be maintained to prevent a reversal of the euro against the Swiss franc.
1264/1262 support
1270/1272 resistance
The US Dow fell and supported gold. Gold held above $1264 yesterday. It is estimated that the U.S. president’s continued influence on Sino-U.S. trade relations and the EU’s anti-tariff actions will start soon, on no improvement, risk aversion will heat up and gold may return above 1310 U.S. dollars.
US crude oil futures
69.15/69.35 resistance
68.05/67.45 Support
Crude trend is good, but the United States API announced the number of crude oil inventories. The price of oil will increase or decrease based on the number of inventories.
6232 / 6434 resistance
6032/ 5820 support
Bad news gone, now if 6032 support remains, rebounding maybe reaching to 6232 and 6434. If fail to rebound and fall, it will maybe reach 5820 which is fist support.
Disclaimer: The above is for reference only; the market is risky and investment needs to be cautious. Trading must included risk management! Wish Happy trading!
By ATFX, Chief Analyst of Asia Pacific: Martin Lam