• Alphachain Team

Coronavirus showing no signs of abating

The DXY continued its move lower last week as cases in the United States showed no signs of abating. Cases within Texas and California continued to rise with Florida being the worst hit reporting a record increase in daily cases of 15,300 bringing the total for the state to 269,811. The USD weakness led to risk assets benefiting somewhat as the week progressed with cable breaking above 1.2600 though the Greenbacks index continues to find support at a four-hourly zone of support around 96.40. Looking ahead, this week will see a more active Economic calendar as the Eurozone and Canada are set to release their Monetary Policy Statements.


Relations between the US and China

Relations between the US and China continue to remain unstable after US President Trump outlined that a Phase 2 two deal is currently unlikely due to the current relationship being severely damaged. This comes as the US are reportedly weighing options to sanction China after its actions in Hong Kong. China have also stated that they will be looking to retaliate should the sanctions go through adding further fuel to the fire.


The UK

The UK are planning for life Post–Brexit after the UK Cabinet Minister Gove stated that they are looking to develop infrastructure in the South East to better cope against trade flows. In addition to this, Chancellor Sunak is looking to make changes to the current tax reductions and aims to relax planning laws in a number of freeports within the next 18 months in an effort to support the economy.


WTI Crude Oil

WTI Crude Oil stalled last week as price failed to break above $41/bbl. Heading into the week, market participants will be awaiting the news from the upcoming OPEC+ JMMC-Meetings on Wednesday where producers are set to discuss relaxing the current output restrictions set to take effect from next month. Saudi Arabia has already proposed that they intend to ease production cuts by 2mln bpd. Some OPEC nations will be looking to raise output from August amidst the easing of the Covid-19 lockdowns, though a further surge in cases and potential of a second wave will continue to threaten their plans.


In the cryptocurrency space

In the cryptocurrency space, BTCUSD found support around $8,900 before rebounding higher and pushing back above $9,000. Price still continues to remain above the 50EMA which has been acting as dynamic support for the past few days. Ethereum retreated from daily levels of resistance after sellers stepped in around $249 to keep prices subdued beneath $250. The rally on XAUUSD settled temporarily as USD strength came into markets late last week, this saw price retreat back below $1,800 as price retested its previous level of resistance now as support. Overall the market sentiment for the commodity is still bullish as the stochastic remains in the overbought region and the width between the 21EMA, 50EMA and 200SMA continues to widen. Should last week’s USD weakness continue, then a move higher will be expected for this asset with previous highs being around $1,817/troy ounce.

Here is a breakdown of the high impact data releases this week.

Monday

16:30 BOE Gov Bailey Speaks. Markets to watch: GBP Crosses

Wednesday

Tentative BOJ Outlook Report/Monetary Policy Statement. Markets to Watch: JPY Crosses

15:00 BOC Monetary Policy Report, Rate Statement & Overnight Rate. Markets to watch: CAD Crosses

16:00 BOC Press Conference. Markets to watch: CAD Crosses

23:45 CPI q/q. Markets to watch: NZD Crosses

Thursday

02:30 Employment Change & Unemployment Rate. Markets to watch: AUD Crosses

12:45 Main Refinancing rate & Monetary Policy Statement. Markets to watch: EUR Crosses

13:30 ECB Press Conference. Markets to watch: EUR Crosses

13:30 Core Retail Sales & Retail Sales m/m. Markets to watch: USD Crosses

Friday

11:00 BOE Gov Bailey Speaks. Markets to watch: GBP Crosses

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