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The Federal court’s dismissal of the Federal Trade Commissions’ (FTC) antitrust lawsuit…

The Federal court’s dismissal of the Federal Trade Commissions’ (FTC) antitrust lawsuit against Facebook boosted FB by 4.0%

20210629
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Market Focus

Wall Street benchmarks refreshed all-time highs with mild gains, except for Dow Jones Industrial Average (DJI), on Monday. Nasdaq surged 1.20%, while DJI closed red (-0.53%). The equities offered a mixed beginning to the key week comprising the US Nonfarm Payrolls (NFP) amid a light calendar. The Federal court’s dismissal of the Federal Trade Commissions’ (FTC) antitrust lawsuit against Facebook boosted FB by 4.0%, also propelled shares of Microsoft, Amazon, Apple, and other tech giants.

The House passed two bills Monday that are expected to form the core of legislation in the chamber designed to boost U.S. research and development in response to China’s challenge to U.S. economic supremacy.

By wide bipartisan margins, the House authorized more funding for the National Science Foundation and additional money for the Department of Energy, following a similar effort in the Senate that saw the passage of a comprehensive $250 billion measure that included more than $52 billion in incentives and grants for domestic semiconductor manufacturing.

While the Senate pulled separate pieces of legislation into a single bill intended to bolster U.S. competitiveness with China, the House is taking a more piecemeal approach. Some lawmakers and industry groups are pressing for the House to include the incentives for chipmakers in whatever package eventually emerges.

“As the legislation advances, we urge Congress to include $52 billion to fund the critical semiconductor research, design, and manufacturing initiatives” included in previous congressional legislation that was never funded, the Semiconductor Industry Association said in a statement.

Main Pairs Movement

Major pairs remained restrained to narrow price ranges. The dollar managed to post a modest intraday gain, helped by optimistic market sentiments.

The euro pair fell to 1.1902, its lowest in 5 days, but finished the day in the 1.1920 area. ECB’s Robert Holzmann said there is no room to increase rates given weak inflation, adding that the PEPP will end when the coronavirus emergency is over, something that won’t happen anytime soon. The facilities program will be revised in September.

Cable failed to recover the 1.3900 mark and trades around 1.3875. After Matt Hancock resigned over the weekend, Sajid Javid is the new UK’s health minister. Javid affirmed that coronavirus-related restrictions would be lifted on July 19, as the government sees “no reason to go beyond” that date. Meanwhile, the UK reported 22,868 new coronavirus cases, the largest one-day increase in five months, amid the spread of the Delta variant.

Antipodean currencies lost some ground against their American rival. Aussie ended the day at 0.7565, and Kiwi at 0.7040. The loonie pair trades at 1.2335, slightly higher than the previous day. Gold continued consolidating around $1,780, but crude oil prices edged lower. WTI settled at $72.75 a barrel, and Brent at $74.58. US 10-year Treasury yields advanced during European trading hours, but retreated ahead of Wall Street’s opening, to end the day below 1.500.

Technical Analysis

USDJPY (4- Hour Chart)

Despite today’s retreat, USDJPY remains its bullish momentum as it keeps trading within the ascending channel and trading above a bullish 20 simple moving average in a bigger outlook. Nonetheless, USDJPY seems to lose its direction on the 4- hour chart as the pair is unable to sustain gains beyond its immediate resistance of 111.12; at the same time, both technical indicators, the MACD and the RSI lose their directional strength around the midlines. On the downside, if the pair loses traction below the support of 110.51, then its intraday bias will become bearish in the near- term; on the other hand, if the pair regains its bulls above 111.12, then it will continue to be bullish and extend further north.

Resistance: 111.12

Support: 110.51, 109.14, 109.84

EURUSD (4- Hour Chart)

EURUSD continues to consolidate in the tight range above the 1.1900 level. On the 4- hour chart, the pair remains neutral at this point since it continues to cling around the 1.1985 level. On the upside, a break of 1.1919 will lead the pair to head to 1.1985 instead; to the downside, if the pair fails to hold above 1.1919, then it might aim for the weekly low at 1.1837. However, similar to GBPUSD, the pair seems to be in a neutral position as the MACD and the RSI are both in a neutral status. As a result, the focus will shift to Tuesday’s mid-tier US economic data releases.

Resistance: 1.1985, 1.2052

Support: 1.1919, 1.1837 

GBPUSD (4- Hour Chart)

GBPUSD retreated below the 1.1900 level as the resurgent demand for the US dollar and the coronavirus delta variant tension in the UK. The outlook of GBPUSD remains under pressure on the 4- hour chart. The pair is currently contesting its minor support level of 1.3896; to the downside, a break of the level will resume the fall to challenge the next level of 1.3787. On the upside, if the support level of 1.3896 is held, then the pair will turn bias back to the upside for the level of 1.3963 instead. At the time of writing, the intraday bias remains neutral first as the MACD is overlapped and the RSI remains neutral.

Resistance: 1.3963, 1.4017, 1.4072

Support: 1.3896, 1.3787

20210629
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Though higher US PCE inflation, which rose in May 3.4% YoY, its…

Though higher US PCE inflation, which rose in May 3.4% YoY, its highest reading in almost three decades, the greenback’s performance is still weak

20210628
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Market Focus

The S&P 500 index rose to another record last Friday after investors poured over fresh U.S. economic data a day after an infrastructure spending agreement in Washington helped lift the broad market to all-time highs. The Dow also finished higher (+0.69%), with the rise in Nike shares being a big driver of its gains. JPMorgan Chase & Co. also added to the benchmark’s performance, after the results of the Federal Reserve’s latest stress tests, released last Thursday, showed banks have enough capital to withstand a severe global recession and so can resume paying dividends and buying back stock. Nasdaq closed red (-0.06%).

The U.S. president Joe Biden and a bipartisan group of senators presented the agreement on new infrastructure spending on Thursday. Biden suggested after the deal was struck that his signature on any infrastructure bill was contingent on Congress also passing the much larger tax and social-spending measure that Democrats are preparing.

On Saturday, he issued a statement saying it “was certainly not my intent” to create the impression he was threatening to veto “the very plan I had just agreed to.”

Mitt Romney, also among a group of GOP senators who announced the infrastructure deal with Biden at the White House on Thursday, said he was concerned about the president’s earlier comments but thinks “the waters have been calmed by what he said on Saturday.”

“I do trust the president,” Romney, a Utah Republican, said on CNN’s “State of the Union” on Sunday. “At the same time, I recognize that he and his Democratic colleagues want more than that.”

Senator Bill Cassidy, a Louisiana Republican who’s in the bipartisan group, said “I’ll continue to work for the bill.” Asked whether, on NBC’s “Meet the Press” whether he expects Senate Minority Leader Mitch McConnell to try to sink the bipartisan plan, he said: “If we can pull this off, I think Mitch will favor it.”

Main Pairs Movement

Though higher US PCE inflation, which rose in May 3.4% YoY, its highest reading in almost three decades, the greenback’s performance is still weak as the stats didn’t surprise the market players. The dollar ended the week with modest losses. However, U.S 10-year Treasury Bonds yield soared 2.38% to 1.531, benefiting from the price index’s rise.

The euro pair kept lingering within familiar levels, ending the week at around 1.1930. Cable settled at 1.3870, as the pound remained under selling pressure, undermined by the BoE’s dovish announcement. The antipodean currencies modestly advanced against their American rival at the weekly close, while the loonie pair ended red.

Gold finished the week little changed around $1,780 per ounce. Crude oil prices advanced, with WTI up to $74.00 a barrel, and Brent to $76.00.

UK Health Minister Mark Hancock resigned on Saturday after breaking coronavirus-related rules imposed by himself. The news may impact the already weak Sterling at the weekly opening.

The week will start in slow motion from the fundamental side, with the focus on US employment numbers to be out by the end of the week.

Technical Analysis

USDJPY (4- Hour Chart)

USDJPY edges higher after the US PCE inflation data during the American session. The pair remains bullish mode as it continues to fall within the ascending channel, signaling the positive move. The stability of the USDJPY above the 110 psychological level continues to support the upside momentum. At the same time, the technical indicator, the MACD remains bearish while the RSI is still outside of the overbought territory on the 4- hour chart, giving the pair rooms to extend further north. It is expected to the pair moves toward the next resistance of 111.12.

Resistance: 111.12

Support: 110.51, 109.14, 109.84

EURUSD (4- Hour Chart)

EURUSD bounces back during the American session after touching weekly highs at 1.1976, caused by higher US yields, giving the greenback a boost. On the technical sphere, the pair still trades in levels close to the oversold condition, which means that its bullish attempt might cling to the resistance of 1.1985 for a moment before next week, a busy US calendar week. To the upside, EURUSD remains bullish as the MACD is positive, and the pair trades above the 20 SMA on the 4- hour chart. If the pair ends up breaching its current resistance and the 50 Simple Moving Average, then it will head toward the next psychological level at 1.2000.

Resistance: 1.1985, 1.2052

Support: 1.1919, 1.1837 

GBPUSD (4- Hour Chart)

GBPUSD continues to remain under pressure by the dovish BOE’s decision. The pair reverses from bullish to bearish this week, moving away from the key 1.4000 resistance region and now heading toward its next immediate support of 1.3896. GBPUSD remains bearish as the MACD has turned negative, lending supports to bears; at the same time, the downside pressure is expected to continue as the RSI is outside of the oversold territory, giving the pair rooms to extend further south. To the upside, the pair needs to trade above the critical hurdles at the 20 SMA and the 50 SMA to stand back to the positive trend.

Resistance: 1.3963, 1.4017, 1.4072

Support: 1.3896, 1.3787

20210628
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Wall Street banks are poised to announce a deluge of dividend increases…

Wall Street banks are poised to announce a deluge of dividend increases and stock buybacks after Fed’s stress tests showed the industry built up a stockpile of cash during the pandemic

20210625
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Market Focus

Stocks climbed to an all-time high as President Joe Biden’s bipartisan $579 billion infrastructure deal added to optimism the economic recovery is taking hold. Nasdaq 100 rose 0.6%. Dow Jones rose 1%. Companies that stand to benefit the most from a rebound in activity outperformed — with financial and energy shares leading gains in the S&P 500. Caterpillar Inc. (+2.6%), the world’s biggest maker of mining and construction equipment, jumped alongside raw-material producers such as U.S. Steel Corp. (+3.36%) and Nucor Corp. (+1.99%).

Wall Street banks are poised to announce a deluge of dividend increases and stock buybacks after Fed’s stress tests showed the industry built up a stockpile of cash during the pandemic.

Lenders can announce their plans for distributing capital after the market closes on June 28, and the industry’s strong results mean payouts may be the largest ever following the Fed’s annual exams. Early estimates indicate the six biggest U.S. banks, including JPMorgan Chase & Co., Bank of America Corp., and Citigroup Inc., could return more than $140 billion to shareholders.

The passing marks, announced Thursday by the Fed, indicate that firms are officially free from restrictions that the regulators put on dividend payments and share repurchases last year when Covid-19 was ravaging the economy. The banks’ solid performance also signals that the industry has grown much more comfortable with the exercises, which used to trigger anxiety and frustration across Wall Street.

However, as the news suggests the Fed’s indirect recalling of the pandemic-led relief measures, investors do worry about the monetary policy adjustments and the same weigh on the risk appetite.

Main Pairs Movement

Similar to the previous day, the greenback lost some ground throughout the first half of the day, to recover most of it during the American session. Trading was dull as released economic data were mixed. The euro pair hovered around familiar levels above the 1.1900 level, while antipodean currencies consolidated against their American rival. Loonie closed at 1.2320, slightly higher than yesterday.

US data was somewhat encouraging, although most of the figures missed the market’s expectations. Weekly Initial Jobless Claims printed at 411K, while the previous weekly figure was revised to 418K. Durable Goods Orders were up 2.3% in May, while the Q1 GDP was confirmed at 6.4%. The numbers indicate that the US economic recovery may have reached a plateau. It is not bad news but may prevent the greenback from strengthening further.

Sterling was the worst among the major currencies, falling after the BoE’s monetary policy announcement. As widely anticipated, policymakers remained rates and easing programs unchanged. However, the following statement offered a dovish tone. “The Committee does not intend to tighten monetary policy at least until there is clear evidence that significant progress is made in eliminating spare capacity and achieving the 2% inflation target sustainably.” Clichés were not satisfying. Speculators were looking for a more hawkish tilt. Cable trades around 1.3910.

Gold faced headwinds during the US afternoon, as stocks reached a record high. The rally in equities was backed by US President Joe Biden’s announcement, as he said that they reached a bipartisan deal on the infrastructure spending plan. The yellow metal settled at around $1,775.00 per ounce.

Crude oil prices bounced from intraday lows, posting modest daily gains. WTI settled at $73.30 a barrel, while Brent stands firmly above $75.00, trading at $75.54 as of writing.

Cryptos are on the way to recover its huge loss on Monday. Bitcoins traded higher in a third consecutive day, attacking the $35,000 resistance; Ethereum alike tried to break through the $2,000 level, trading at $1,990 at the moment.

Technical Analysis

USDJPY (4- Hour Chart)

USDJPY erodes overnight gains from the highest level during the American session as the mixed signals on the US inflation concerns keep the greenback bulls on the defensive. From the technical perspective, after contesting the resistance level of 111.12, USDJPY struggles to find acceptance above the level, resulting in a pullback afterward. However, the pair remains its offered tone since it continues to trade within the ascending channel, signaling that the bullish momentum has not ended yet; the pullback might be a signal to adjust its overbought readings as the RSI was around 70 when the pair hit 111.12 on the 4- hour chart. At the same time, sustainably advancing above its simple moving averages also supports USDJPY’s bullish traction.

Resistance: 111.12

Support: 110.51, 109.14, 109.84

EURUSD (4- Hour Chart)

EURUSD enters the consolidative phase as both currencies are without clear directional strength. On the 4- hour chart, the pair shows that it keeps finding the support level of 1.1919 while trading in between the upper bounce and the midline of the Bollinger band, showing that the pair is poised to extend its bullish momentum in the near- term. The short-term bulls are supported by the MACD, as the MACD line is above the signal line. On the upside, if the pair successfully breaches this consolidative phase around the 1.1919 regions, then it will head toward the next resistance of 1.1985 to 1.2000, where the psychological level is. Technical indicators aim higher after consolidating around their midlines, which reflects the greenback’s limitation.

Resistance: 1.1985, 1.2052

Support: 1.1919, 1.1837 

GBPUSD (4- Hour Chart)

The British pound weakens against the greenback on disappointing BOE as BOE decides to maintain the monetary policy on hold, not intending to tighten the monetary policy. From the technical perspective, after the strong move this week, GBPUSD slides as the double top formation was previously formed in the near- term. The consolidation might take place as the RSI is in the neutral condition and the pair is at the moment trading on the midline of the Bollinger band, which signals that the clear move of the pair is indecisive as of now. And the price range for the consolidation is expected to see in between 1.3963 and 1.3896. On the downside, a convincing breach below 1.3896 will be seen as a fresh trigger for the bears; on the other hand, a break above 1.3963 will be seen as a short-term bullish momentum.

Resistance: 1.3963, 1.4017, 1.4072

Support: 1.3896, 1.3787

20210625
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