Market Focus

US Indices rebounded sharply today as investors stepped in to buy the dip after a huge plummet from delta variant fears sell-off. The Dow Jones up-surged 1.6%, 549.95 points after the previous 725 points- decline on Monday. The S&P 500 climbed 1.52% and the technology heavy-weighted Nasdaq 100 rose 1.57%. This comeback rally activated through the session as a bounce in the Treasury yields above 1.20% soothed some pandemic concerns that would potentially ruin the economic recovery.

Inflation seems to continue to be a problem in the market, but the Federal Reserve looks to stay in a hawkish stance. While the breakeven rate curve shifted lower, inflation expectation remains uncomfortably high. As of now, five- year breakeven rate is trading at 2.45%, which is above the Fed’s 2% target for the next five years.

The world’s largest cryptocurrency, Bitcoin, suffered a brutal month so far as Bitcoin is now trading near the bottom of the 2021 trading range. Some analysts observed that it can be the winter for Bitcoin back in 2018 when the price declined by three- quarters. The winter of Bitcoin can potentially flush out a lot of speculations.

Main Pairs Movement

The Aussie halted 4- day drop, rising 0.1% to 0.7334, as stock markets stabilized and crude oil price bounced back a bit, helping revive risk assets. However, the pandemic problem continues to be a huge issue in Australia; half of Australia is still in lockdown as the delta variant spreads across the country.

The yuan finally rose after 3- day slide as risk assets rebound, buying from the dip after a tumultuous trading session on Monday. The yuan climbed 0.1% at 6.4883 against the US dollar.

EURUSD dropped 0.17% to 1.17765, the fresh low since April even major indices rebounded after Monday’s slide.

The Pound declined 0.39% against the US dollar amid the delta variant spreads in the UK. The UK lifted all Covid-19 restrictions this week, as a result, the reopening of the UK economy remained doubtful.

Technical Analysis

GBPUSD (4-hour Chart)

Sterling once fell to the daily lowest at 1.357, refreshing another low point in recently, the price was closed around 1.3625 aftermaths. At the moment, the rapid spread of the Delta variant in the U.K. and prospects of further deterioration weigh on the pound at the current stage. For the technical aspect, the RSI indicator remains setting beneath 30 at over sought territory which suggests a bearish movement for the short term. On the other side, 15- and 60-long SMAs both retained downward movement. If the market continuously goes down, we expect the first immediate support will be 1.36 as a psychological spot. In contrast, the first resistance is setting at 1.3665.

Resistance: 1.3665, 1.3745, 1.3896

Support: 1.36

AUDUSD (4- Hour Chart)

Aussie had a choppy move in the daily market while once fails to overcome yearly low of 0.7299, currently close around 0.733. The Delta Covid variant breaks out and reflation fears keep pricing the market sentiment. Meanwhile, the copper and oil market rebound yesterday desperate that gave Aussie a breathing room. From the technical perspective, despite the RSI indicator close at 33 figures, suggesting pair would be under bearish movement for a short run. For moving average side, 15 and 60 long SMA continue it descending way to lower low. On the downside, if the pair fails to trade above recently low at .7323 level, it could hand over the first to next lower stage over even below .7300 level.

Resistance: 0.7415, 0.7492

Support: 0.7323, 0.73

EURUSD (4- Hour Chart)

The euro fiber is posting lower lows daily, and the near-term picture is still bearish as it is throwing in fit and start descending price pattern. For the technical side, the RSI indicator shows 42 figures that hovered by upward impetus from the short term, furthermore, getting close to neutral territory. From a moving average perspective, 15 long SMA indicator moving along with the price closely as slightly downward movement and 60 long SMA seems losing tailwind momentum, in another word, it getting a flat way.

Base on the aforementioned, we deem the market is rejuvenating to the upper stage if the market could outstrip the first resistance at 1.1804 around. Moreover, if the price could propel to higher than the next price level would eye on 1.1848~1.188.

Resistance: 1.1804, 1.1848, 1.188

Support: 1.1766, 1.17