TRADESETUP

July 1, 2020

The Morning Jumpstart

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OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 1/07/20 (as at 7:15am AEST)

  • SPI200 (Sept) overnight futures down 7 pts to 5885
  • SP500 up 47.05 pts to 3100.29
  • NASDAQ up 184.61 pts to 10,058.77
  • Dow Jones up 217.08 pts to 25,812.88
  • FTSE100 down 56.03 pts to 6169.74
  • DAX30 up 78.81 pts to 12,310.93
  • GOLD futures US session (Aug) up $16.90 to $1798.10 an ounce
  • COPPER futures (Comex Sept) up $0.036 to $2.716 a pound
  • OIL futures US Session (Nymex Aug) up $0.12 to $39.82 a barrel
  • CRB Index up 0.93 pts to 137.97
  • AUDUSD trading at 0.6899
  • EURUSD trading at 1.1234
  • GBPUSD trading at 1.2396
  • USDJPY trading at 107.9200
  • USD Index US Session (ICE Sept) down 0.154 to 97.347

Major US indexes again moved higher right from the open to end the quarter on a positive note. News outlets are still talking up concern over covid-19 cases although the market remains locked in on expectations for further stimulus to support the market. Buyers are happy to continue to shrug off negative data and focus on signs of an economic recovery and it is showing in other major commodities and markets such as Copper, Oil and the USD. It will be interesting to see the reaction in the near term now that a very positive quarter is locked away. Traders will now be facing some potentially weaker than expected earnings and we expect that the bulk of ‘positive expectations’ have already been factored in to price. Now that the window dressing has been done, we may see some weakness creep into the action. The DOW closed up 0.85% while the broader SP500 was up 1.54% and the Nasdaq ended up 1.87% for the session. In Europe, major Indexes were mixed but held their ground ahead of the US open when the DAX and FTSE lifted into the close.

Reuters Graphic

The USD Index moved higher through resistance during the Asian and European sessions before being sold down through to the US close. Still, price remains held in a range as bulls and bears fight it out which is inline with the overall view of the share markets. Markets have one eye on the rise in covid-19 cases and the other on the better than expected economic data releases. The EURUSD was again pressured into key support at 1.1200 before rebounding on the fall in the USD. The pair still remains torn between bullish and bearish action and may stay that way for a while yet until equity markets start their next move to trigger a trend move into the USD. The GBPUSD, like the Euro, was under early pressure but then bounced hard on the dollars retreat off the highs. Price was under earlier pressure on some negative economic data but the reaction higher on the dollar fall shows the continued risk on nature in Indexes. The AUDUSD had a choppy session as expected into the year end fun and shenanigans. Price initially moved lower to clear out support before whipping around and spiking up through resistance at 0.6895. If price consolidates above this level, we expect to see another squeeze higher as buyers take control in the short term. The USDJPY continued its push higher into the US close and against the move in the USD. It seems there is no demand for the YEN which offset the selling into the USD.

SPOT GOLD was supported by the selling into the USD and not any safe haven buying as shares rallied. Price was lifted as sellers were squeezed out of the action through 1775/1780 with stop losses on short trades being triggered. We may see a pullback as price looks for liquidity and moves off extended levels. Crude Oil was also supported into the US close on the USD fall. Price continues to hover up at resistance around $40 with bulls looking intent on moving price to higher levels as long as 38.80 holds on the downside. Copper remains on a charge higher as price takes out resistance and squeezes out any stubborn sellers. This is a good indication for share market bulls but price is extended and may need a pullback to reset for any continuation higher.

Cryptocurrencies edged lower through the session although look ready for a short term move up as prices hold minor higher lows. Bitcoin is trading at $9161.7 down 0.52% while Ethereum is at $225.71 down 1.14% and Ripple is at $0.17609 down 1.19%.

The ASX200 rallied from the open yesterday and saw a choppy afternoon, as expected being the last day of the financial year. The index ended up 82.9 points to 5897.9 being supported by gains in the Energy, IT and Industrials sectors. Rising stocks outnumbered declining ones by 831 to 469 and 373 ended unchanged.

The ASX200 is expected to open relatively flat after a non-eventful session overnight as the SPI200 found some choppy price action.

ECONOMIC DATA OUT TODAY (AEST)

AUD Building Approvals 11:30am

CNY Caixin Manufacturing PMI 11:45am

EUR German Retail Sales 4pm

EUR German Unemployment Change 5:55pm

EUR Final Manufacturing PMI 6pm

GBP Final Manufacturing PMI 6:30pm

GBP MPC Member Haskel Speaks 9pm

USD ADP Non-farm Employment Change 10:15pm

USD ISM Manufacturing PMI 12am

USD Crude Oil Inventories 12:30am

USD FOMC Meeting Minutes 4am

SPI200 INTRADAY LEVELS TO WATCH

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