Coronavirus, US-China Tensions & Crypto
Strong NFP data provided some comfort for the USD as the DXY printed a morning star formation on the daily Timeframe and traded higher on Friday’s session. At the time of writing, price is trading at 93.46 with resistance around 93.80. The surge in USD strength led to Gold pulling back from its all-time highs and closing the week around $2,034/oz.
Stateside, Florida, California and Texas all showed an increase in virus cases, this comes as the nation’s total cases rose to a total of 4.974mln. It was also reported that cases amongst children grew by 40% in the latter part of July. Though children make up a small proportion of the overall outbreak, there are growing concerns over whether the schools should reopen in the autumn. On the other hand, the UK and Italy have reaffirmed plans to reopen schools in September. This comes as the UK reported new cases above 1,000 for the first time since June. The UK is also looking to abandon its daily death count due to an investigation into its method of reporting.
US – China tensions
US – China tensions are set to continue this week, as the US placed sanctions on some Chinese officials in Hong Kong, this included their Chief Executive Carrie Lam as their roles in curtailing freedom in Hong Kong faces questioning. The US still continues to deliberate over the stimulus package; Democrats and Republicans are yet to give a firm date to reach an agreement with divisions remaining on overall spending and aid to state and local governments. This led to Trump taking action and announcing four executive orders. This focused on enhanced employment benefits, evictions, payroll tax and student loan relief.
Last week saw Trump sign an executive order to ban transactions with Tiktok’s parent company as well as Tencent owned WeChat in 45 days. This news led to the Hang Seng moving lower on the downbeat tone. Twitter Inc. have reportedly held talks about a potential combination with TikTok whilst Blackrock have also discussed joining Microsoft in a potential bid for the social media app.
In the cryptocurrency space
In the cryptocurrency space, BTCUSD continued to push higher and is now trading above the $11,500 level. At the time of writing price is trading at $11,990 with resistance around $12,160. The Cryptoasset is currently solidifying itself in the five-figure territory after selling off heavily during the heat of Covid-19. Ethereum is very much rangebound and trading around the $400 level, nearby resistance lies around $410.
Here is a breakdown of the high impact data releases this week.
03:00 Official Cash Rate, RBNZ Monetary Policy Statement & RBNZ Rate Statement. Markets to watch: NZD Crosses
04:00 RBNZ Press Conference. Markets to watch: NZD Crosses
07:00 Prelim GDP q/q. Markets to watch GBP Crosses
13:30 CPI m/m, Core CPI m/m. Markets to watch USD Crosses
02:30 Employment Change, Unemployment Rate. Markets to watch: AUD Crosses
00:30 RBA Gov Lowe Speaks. Markets to watch: AUD Crosses
13:30 Retail Sales m/m. Markets to watch USD Crosses