Daily Market Report by GulfBrokers 2020-2021

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This week investors will closely watch how the countries battle against second wave coronavirus infections and updates from India-ChIna border tensions. Here are the main events coming up this week (GMT).
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EUR/USD up slightly on USD weakness, supported by 1.1140/50. Any break below 1.1140 will open doors to 1.1110 demand zone. on the upper side the immediate resistance around 1.1240, break above 1.1240 the next resistance to watch 1.1320.
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Gold price slightly down from fresh monthly high $1758, If the price won't break above the previous high $1765 we may see a pullback to $1745 & $1730. On the other side break above $1765, the next level to watch $1780.
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Global markets started the week on a bearish note, amid fears over a resurgence of coronavirus cases. The World Health Organization reported a record increase in global coronavirus cases on Sunday, with more than 183 thousand cases in a 24-hour period. Brazil led with nearly 55,000 new cases, followed by the United States with more than 36,000 and India with about 15,000 new cases.

EQUITIES

US equity futures recovered from the early losses, U.S. S&P 500 futures rose 0.3%. While European and UK shares also rebounded from the losses as investors remain optimistic over a quick economic recovery despite a spike in new coronavirus infections.

OIL

Oil prices were steady on Monday, supported by tighter supplies from major producers. The OPEC members Iraq and Kazakhstan agreed to increase their compliance with the deeper supply cuts agreed on by OPEC+ nations, which should help stabilize oil markets even further.

CURRENCIES

Commodity currencies like the Australian dollar and New Zealand dollar recovered from the early losses and both pairs trading 80 pips higher during the European session. Australian dollar rebounded after Reserve Bank of Australia Governor Philip Lowe said today that Australia had "a fantastic set of underlying fundamentals" and upgraded his estimate for employment.

GOLD

Gold prices edged higher during the early Asian session on Monday followed by the rising fears of the second wave of coronavirus gave a push to gold price to reach fresh month high- $1758.

Economic Outlook

On the data front, the People’s Bank of China kept its benchmark lending rate unchanged with the 1-year loan prime rate left at 3.85%. The 5-year loan prime rate was also kept steady at 4.65%.

Moving ahead to the week the investors will closely watch how the countries battle against second wave coronavirus infections and updates from India-China border tensions. The main important events to watch this week RBNZ monetary policy decision, flash PMI surveys for the UK, Eurozone, Japan, Australia and US Q1 GDP.

Coronavirus Update:

The number of confirmed cases of coronavirus around the world is approaching 9 million, of which more than 465 thousand died and over 4 million recovered. Meanwhile, Spain reopened to most European tourists on Sunday, after weathering a brutal outbreak that killed more than 28,000 people. Spanish Prime Minister Pedro Sanchez urged people to take maximum precautions: "The virus can return and it can hit us again in a second wave, and we have to do whatever we can to avoid that at all cost." In India the coronavirus cases climbed by nearly 15,000 as of Monday to 425,282, with more than 13,000 deaths, the health ministry reported.

Technical Outlook

GOLD:
During the European session the gold price trading slightly down from fresh monthly high - $1758.

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The important levels to watch for today: Support- $1744 and $1732 Resistance- $1765 and $1776.

EUR/USD: The pair up slightly on USD weakness, supported by 1.1140/50. Any break below 1.1140 will open doors to 1.1110 demand zone.

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The important levels to watch for today: Support- 1.1150 and 1.110 Resistance- 1.1240 and 1.1290.

Quote of the day: In investing, what is comfortable is rarely profitable – Robert Arnott.

Read more- https://gulfbrokers.com/en/daily-market-report-110
 
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"We never made it out of the first wave," said Dr David Weber, medical director of hospital epidemiology at the University of North Carolina Medical Center.

"A second wave implies that the first wave has disappeared and reappeared," said Loren Lipworth, an epidemiologist at Vanderbilt University Medical Center.


Spike in new coronavirus cases in the countries including the US, China, South Korea, Australia, New Zealand and Japan fuelled fears of a second wave of coronavirus infections. The COVID-19 cases reached a new one-day high on Thursday with 150,000 new confirmed cases, according to the World Health Organization. "The world is in a new and dangerous phase," Tedros said. "Many people are understandably fed up with being at home. Countries are understandably eager to open up their societies and economies, but the virus is still spreading fast. It is still deadly, and most people are still susceptible." As per the recent report, worldwide, the total confirmed cases of Covid-19 have reached over 8,975,000, with over 468,000 deaths and 4,448,000 recoveries.

Beijing returns to lockdown after a wholesale market outbreak

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The capital of China, Beijing was the primary source of concern last week with new clusters of cases which prompted China to raise its emergency response, 1,200 flights have been cancelled and the shutdown of schools in the affected city. On Monday, Chinese authorities reported 25 new confirmed cases, with 22 of them in Beijing. Recently Beijing reintroduced district lockdowns and mass testing after a cluster of novel coronavirus cases were linked to the Xinfadi market, Beijing's largest wholesale food market and China’s capital city already locked down 10 more residential communities. The WHO said it was informed of the outbreak by Chinese officials who were investigating its source and extent.

Other countries are experiencing the second wave of COVID–19 infections
  • Australia, Victoria has confirmed 16 new cases of coronavirus in the past 24 hours and the country already reintroduces restrictions as COVID-19 Cases Increase.
  • New Zealand reported two new Covid-19 cases on Monday, bringing the total active cases in the country to nine.
  • South Korea has the biggest daily rise in 3 weeks on Saturday and on Monday the country added 17 new cases raise the country’s total to 12,438, with 280 deaths.
  • In Germany, the coronavirus reproduction rate has nearly tripled in just two days to reach 2.88, the number of infections increased by 537 within one day to a total of 190,359.
  • Italy reported 224 new cases and 24 deaths on Sunday, bringing the country’s total death toll to 34,634.
Impacts of the second wave in global markets
  • Global stocks rally pauses as investors are once again worried that pandemic may be far from over.
  • Last week, the US dollar posted highest weekly gains in a month as it strengthens as investors have started seeking safe-haven assets amid worries of a second wave of coronavirus.
  • Crude oil prices have come under pressure over the past few days due to surge in the number of coronavirus cases in China, the world’s biggest crude importer, along with a record spike in new infections in several US states exacerbated concerns over crude demand.
  • Gold prices climbed to a more than 7.5-year high, the yellow metal has risen 15% so far this year.
Conclusion

Eyes are on Beijing, which has imposed new lockdowns, reclosed schools and banned flights again after the emergence of new clusters linked to markets. China's National Health Commission recently said an increase of coronavirus cases in Beijing and other provinces may threaten the outlook of the second world’s largest economy. The next coming weeks would be critical in determining whether these countries would have to battle another wave of coronavirus cases. If the Covid-19 cases increase further will may lead to second lockdown and duration of closed national borders.

Check out the detailed report here- https://gulfbrokers.com/en/covid-19-second-wave-what-does-it-mean-to-the-economy
 
At the time writing AUD/USD trading above 0.69, the pair dropped to 0.6860 during the Asian session after US trade adviser Peter Navarro said that the trade deal with China has been terminated. The currency pair recovered later after the comments from US President Donald Trump tweeted “The China trade deal is fully intact. Hopefully, they will continue to live up to the terms of the agreement!”

Important levels to watch today:

Support: 0.6850 and 0.6800
Resistnce: 0.6940 and 0.6980
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Eurozone, Germany, Australia, and UK manufacturing and service PMI reported a noticeable rebound in recent months.

UK manufacturing PMI - Actual: 50.1 Forecast: 45 Previous: 40.7

UK services PMI – Actual: 47 Forecast: 40 Previous: 29

Eurozone Manufacturing PMI - Actual: 46.9 Forecast: 44.5 Previous: 39.4

Germany Manufacturing PMI - Actual: 44.8 Forecast: 41.5 Previous: 36.6

Germany Services PMI - Actual: 45.8 Forecast: 42 Previous: 32.6

EQUITIES

US equity futures and European shares surge during the European session after the tweet from US President Donald Trump. The Asian stocks and the US futures dropped earlier in the Asian session after US trade adviser Peter Navarro said that the trade deal with China has been terminated.

OIL

Crude oil prices climbed higher on Monday after President Trump tweeted “The China Trade Deal is fully intact”. Today the investors keep an eye on the latest US weekly stockpiles scheduled to be published by the API later today at 21:30 GMT.

CURRENCIES

The New Zeeland dollar trading near fresh week high ahead of RBNZ interest rate decision and statement. The central bank will give a policy update On Wednesday Asian session. While the Australian dollar trading near the session high after the price rebounded from the daily low.

GOLD

The yellow metal trading near 8-year high on Tuesday, amid worries of a second wave of coronavirus and rising US-China tensions.

Economic Outlook

Moving ahead to the North American session the investors will closely monitor the comments from UK PM Johnson. He will reportedly announce in parliament today a further easing of lockdown restrictions in England. The other important events to watch:

US manufacturing PMI – 13.45 GMT

U.S. new home sales report– 14.00 GMT

Coronavirus Update:

The total number of Covid-19 cases has passed 9 million worldwide. As per the latest numbers from the WHO more than 183,000 new cases of COVID-19 were reported worldwide on Sunday, which was easily the most in a single day so far. The Philippines has reported its biggest single-day increase in cases, with 1,150 new cases reported within 24 hours. Total cases have reached 31,825 while deaths increased by nine to 1,186. Germany has reported 503 new infections, taking the total number of confirmed cases to 190,862.

Technical Outlook

GOLD:
Gold price trading in a range between $1740 and $1765 after climbing to a fresh monthly high of $1763 on Monday amid fears over a second wave coronavirus infections.

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The important levels to watch for today: Support- $1742 and $1730 Resistance- $1765 and $1776.

EUR/USD: The pair trading near 1.13 after better-than-expected Eurozone and German PMI numbers.

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The important levels to watch for today: Support- 1.1240 and 1.12 Resistance- 1.1320 and 1.1380.

Quote of the day: Money management is the only strategy to survive in this crazy, stupid and doped financial world market- William C. Brown.
 
According to the census bureau of the US Department of Commerce, US new home sales strongly rebounded 16.6% in May to an annual rate of 676,000. The figure also came in 12.7% higher than in May 2019 reading. US Dollar slightly appreciated after better-than-expected economic data.
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Gold price range breakout and its trading highest level since Oct-2012, the next important level to watch $1780 & $1800. On the lower side, immediate support is placed at $1750 and then $1740.
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GBP/USD sellers look to be ready. The pair slightly down hovers around 1.25. The pound appreciated higher on Tuesday after UK PM BorisJohnson announced easing lockdown restrictions.

Important levels to watch today:

Support: 1.2470 and 1.2430

Resistance: 1.2540 and 1.2600
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