Investors continue to wait on inflation-adjusted interest rates that support gold price against worries that the Fed might start tapering bond-buying programs

4 August 2021, 03:54

Market Focus

US market edged higher on Tuesday as the market strength outweighed the concern of the new variant delta Covid. The Dow Jones Industrial Average surged 278.24 points. The Nasdaq 100 climbed 0.6%, led by the recovery from Chinese stocks while the S&P 500 notched all-time high at 4423.15 after Under Armour Inc. and Ralph Lauren Corp. reported gains. Moreover, the 10- year US Treasury yield stabilized on Tuesday.

Wheat price kicked off with 11- week highs as supplies angst. The dry and hot weather across major producers, including Canada, Russia, and the US, is limiting the production prospects for spring wheat. As a result, price increases amid the rising concerns of tightening global supplies.

The UK inflation was up 0.5% month-to-month in June, giving the Bank of England pressure on its patience to manage inflation. The BOE has projected that inflation will peak above 3% by the end of 2021. Investor’s eyes on the BOE’s key meeting.

Main Pairs Movement

Gold traded in a tight range, closing at $1810.22 as investors continue to wait on inflation-adjusted interest rates that support gold price against worries that the Fed might start tapering bond-buying programs. Investor eyes on Friday’s US payrolls report.

Kiwi rose 0.66% to four-week highs the unemployment rate declined more than the expectation. The rate dropped to 4% in Q2, pushing the kiwi upside.

AUDUSD advanced 0.49% on Tuesday as RBA kept rates at record low despite the economic outlook looks to improve. The RBA held the cash rate at 0.1 percent whilst remaining its bond-buying plan.

Technical Analysis

GBPUSD (4-hour Chart)

Sterling is trading at 1.3910 and 0.2 higher on the day so far, leading above G-10 currencies, supported by the risk-on sentiment that has improved as positive corporate earnings continue to offset worries over China’s pressure on the technology sector. On the other hand, U.K. also has been helped by recent falls in Covid-19 infection figures, optimism around Britain’s lockdown easing, and market anticipation of hawkish signals when BoE meets on Thursday. For technical aspect, RSI indicator corrects it momentum then set 53 figure, suggesting slightly bear movement ahead. For moving average side, 15 long SMA indicator holding a flat side movement and 60 long SMA indicator remaining up way traction.

All in all, sterling seems successfully defend critical support level at 1.3896 around in short term. Therefore, we still deem the 1.3896 to be efficient support at the current stage. On the up way, if the price could go over the last highs spot, it will be heading to over 1.4 level.

Resistance: 1,3985, 1.4

Support: 1.3665, 1.3745, 1.38, 1.3896

EURUSD (4- Hour Chart)

Euro fiber takes both a bullish and bearish prospect from a daily perspective, losses 0.03% in the day to 1.18625 as of writing. A scarce macroeconomic calendar and upcoming US employment-related data maintain speculative interest side-lined. From the technical perspective, the RSI indicator is close to 51 figures as of writing, suggesting slightly bull movement for the short term. For moving average side, 15 long SMA indicator shows flat movement side with lacking momentum and 60 long SMA remaining ascending movement.

For price action, the market seems to find a comfortable support level at 1.1848 and flirting around 1.1848~1.188. At the current stage. If the price could breach 1.188 firmly again, it could head to a higher level. On the downside, we deem the most strong support level will be the 1.1766 level. Moreover, it seems like building a double head price action and neckline will be on 1.1848.

Resistance: 1.188, 1.19

Support: 1.1848, 1.18, 1.1766

USDCHF (4- Hour Chart)

The USDCHF pair closed of negative territory and extend its slideway during the European trading hours on Monday. After touching its lowest level since mid-June at 0.9022, it seems to have gone into a consolidation phase and was last seen losing 0.27% at 0.903. On the other hand, the greenback remains on the back foot and supported the swiss franc to preserve its bearish momentum. The dollar index is currently losing 0.14% on the day at 91.93 as of writing. For the technical side, the RSI indicator rebound from over sought zone to 36 figure, suggesting a bearish movement ahead. From the moving average perspective, both 15 and 60 long SMAs indicators are moving south way.

For price action, the Swiss franc has penetrated the support at 0.9047 as we expect yesterday and stay below the level in the day market. For biding buyers, the most important level will be 0.9047 from our perspective. If not firmly stand above it, it will be churning and choppy between immediately resistance and 0.9 level.

Resistance: 0.9047, 0.9075, 0.9134

Support: 0.9