(03 JULY 2020)DAILY MARKET BRIEF 2:The EURUSD met resistance at 1.13

(03 JULY 2020)DAILY MARKET BRIEF 2:The EURUSD met resistance at 1.13

3 July 2020, 09:36
Jiming Huang

In FX and commodities, there is little change.

Cable remained offered above the 1.25 mark on limited news flow on the Brexit deck as negotiations ended a day earlier with little progress on sticking points such the Northern Ireland puzzle, fisheries, and London’s access to the single financial market. But the selling pressure in sterling should remain limited for now, and the 50-day moving average (1.24) should continue providing support against the US dollar.

The EURUSD met resistance at 1.13 mark and pulled back to 1.1230 in Asia. Buyers remain touted below 1.12 on hope that the European governments would soon approve the 750-billion-euro rescue package and fuel the euro demand on improved post-Covid recovery prospects. The long euro remains the consensus trade and the short-term risks remain tilted to the upside.

Despite the optimism in equities, demand in safe haven assets remain firm. The US 10-year yield is capped by the 0.70% handle. The yen and the Swiss franc consolidate gains against the US dollar and gold is lying in ambush within the $1750/1770 area for a renewed attempt on the $1800 per oz.

WTI crude is steady near the $40 per barrel. The surprise 7-million-barrel decline in US weekly inventories and the resilient risk appetite give support to oil markets at the current levels, without however calling the oil bulls to extend the rally above this level.

By Ipek Ozkardeskaya

Share it with friends: