The Week Ahead 22nd - 26th June 2020

The Week Ahead 22nd – 26th June 2020

Market Outlook for Today

The forex markets opened the week softly but with the Asian stocks on a rather mixed sentiment instead. The AUD and NZD are slightly higher while the USD, JPY and CAD are trading on a milder tone. Additionally, major pairs and crosses are generally stuck in within Friday’s range.

With regards to today’s fundamental drivers, a hint could be seen from the economic calendar, which seemed rather muted, the norm for a Monday. In order to expect a heightened volatility in the markets, traders could probably wait for the wave of PMI data to be announced from Tuesday onwards, before taking any trading decisions.

In terms of Risk events for the week, flash PMIs dominates as mentioned above, which usually provide an insight into how economies are attempting to recover from coronavirus lockdowns.

In terms of a generic outlook on currencies trend for today, the USD and JPY are trading from mildly to moderately Bearish, while both AUD and NZD are moderately Bullish so far.

Based on short to medium term, the top three movers are as follows:

AUD/JPY, AUD/USD & GBP/JPY (based on 4hr chart)

However, with regards to pairs that are preferred or traded as the Top Three Top movers, in the medium to long term are as follows:

AUD/JPY, AUD/USD & NZD/JPY (based on Daily chart).

Today’s High Impact Events

The times below are GMT+3

Monday 22nd June 2020

3.30pm – US Chicago Fed Index (May):  Forecast to rise to -4 from -16.7.

Potential instruments to Trade: US indices, USD crosses, Gold

5.00pm – US Existing Home Sales (May):  Sales to rise 1.6% MoM.

Potential instruments to Trade: USD crosses, Gold.

Tuesday 23rd June

2am – Australia mfg & Services PMI (June, flash):  Both services & mfg expected to see a slight rebound.

Potential instruments to Trade: AUD crosses.

3.30am – Japan mfg & Services PMI (June, flash):  Services and mfg expected to show notable improvement.

Potential instruments to Trade: JPY crosses.

10am – 11am – French, German, Eurozone Services & mfg PMI (June, flash):  These are expected to continue their rebound from the weak readings earlier in the year. The eurozone figure is expected to see mfg rise to 48 from 39.4 and services to 41 from 30.5.

Potential instruments to Trade: Eurozone indices, EUR crosses.

11.30am – UK mfg & Services PMI (June, flash): mfg to rise to 48 from 40.7 and services to recover to 42 from 29.

Potential instruments to Trade: GBP crosses.

2.45pm – US mfg & Services PMI (June, flash): mfg to rise to 49 from 39.8 and services to increase to 44 from 37.5.

Potential instruments to Trade: US indices, USD crosses.

3.55pm – US New Home Sales (May): Sales to rise 3.5% MoM.

Potential instruments to Trade: USD crosses, Gold.

Wednesday 24th June

11am – Germany IFO Index (June): business climate index to rise to 85.1 from 79.5.

Potential instruments to Trade: EUR crosses.

5.30pm – US EIA Crude Inventories (w/e 19 June): stockpiles rose by 1.2 million barrels last week.

Potential instruments to Trade: Brent, WTI.

Thursday 25th June

3.30pm – US GDP (Q1, final), Durable Goods Orders (May), Weekly Jobless Claims (w/e 20 June): Durable Goods Orders to rise 7.1% overall and fall 0.1% excluding transportation. Initial claims to fall to 980K from 1.5 million.

Potential instruments to Trade: US indices, USD crosses.

Friday 26th June

5pm – Michigan Consumer Sentiment (June, final):  Forecast to rise to 78.9 from 72.3.

Potential instruments to Trade: USD crosses, Gold.

Coronavirus Status Update

WHO reported the largest single-day increase of coronavirus infections with 183,000 new cases!

US CDC reported 32,411 new coronavirus cases for a total of 2,248,029 which is a 1.6% increase vs. Prev. 7-day average of 1.2% increase and the death toll rose by 560 to 110,625.

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