Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
Market updates on August 6
Information is not investment advice
Key events ahead:
Speech by the FOMC member Bullard – 19:00 MT (16:00 GMT) time
- Yesterday, the US Treasury Department labeled China a currency manipulator after the USD/CNH rate jumped above the 7.1 level. After that, the People's Bank of China took steps to stabilize the yuan and softened the risk sentiment in the market. USD/CNH bounced from the 7.1023 level and moved lower to 7.0650. On H4, both RSI and stochastic oscillators left the overbought zone. This may be a signal of the downfall's continuation.
- NZD/USD tested the highs at 0.6575-0.6586 but failed to stick near these levels after the mixed employment data. The level of employment change increased by 0.3%, while the unemployment rate rose to 4.3%. Now the kiwi is consolidating ahead of the RBNZ meeting scheduled for tomorrow's morning. According to analysts, the rate cut is going to happen there. If it is true, the New Zealand dollar will weaken. On H4, the first support for the pair lies at 0.6509. After the breakout, the kiwi will be vulnerable to the fall towards the support zone at 0.6490-0.6486. From the upside, if the pair manages to stick above the 0.6547 level, it will increase the chances of the rise towards the 0.6575 level.
- The safe-haven gold tested the highs above the $1,465 level but formed multiple Doji candlesticks on H4. It signaled about the weakness of bulls. If the risk-off sentiment increases, the fall towards the first support at $1,448 will be inevitable. The next support will be placed at $1,436. In case of risk aversion due to more uncertainties surrounding US-China trade relations, gold will retest the $1,465 mark. Stochastic indicator left the overbought zone, which may signal a further slide.
The market sentiment deteriorated amid increasing virus cases in the USA and Australia. Investors prefer safe-haven assets like gold, the US dollar and the Japanese yen.
The Reserve Bank of Australia will publish its statement and announce the interest rate on July 7, at 7:30 MT time.
The overall market sentiment was mixed after the USA recorded the largest increase in virus cases since May 9. The data even offset the better-than-expected NFP.