Silver Price Daily Forecast – Silver Tests Yearly Highs

Silver Video 15.07.20.

Silver Managed To Settle Above $19.00

Silver continues its attempts to gain more upside momentum above $19.00 as the U.S. dollar loses ground against a broad basket of currencies while gold trades near yearly highs.

The U.S. dollar is under pressure as demand for safe haven assets decreases amid COVID-19 vaccine hopes. The U.S. Dollar Index declined below the 96 level and is testing lows that were reached in June.

In case U.S. Dollar Index continues its downside move, silver and other precious metals will get an additional boost as weaker dollar makes them cheaper for buyers who have other currencies.

Meanwhile, gold settled above the $1800 level and continues its attempts to move higher. The fundamental situation is favorable for gold, and the continuation of its upside trend will provide support to the whole precious metal segment including silver.

Gold/silver ratio remains in a downside trend and has settled near the 94 level. Gold/silver ratio has not been at such levels since late February when it initiated the upside trend which ended near 126 during the acute phase of the coronavirus crisis. A continuation of this downside trend will be bullish for silver.

Technical Analysis

silver july 15 2020

Silver continues to stay above the nearest support level at $19.00 and looks ready to continue its upside trend. The nearest resistance for silver is located at $19.50.

In case silver manages to settle above this resistance level, it will gain more upside momentum and head towards the next resistance at $20.00.

RSI is in the overbought territory but it has not reached highs seen during previous peaks in May, so silver has more room to develop momentum in case the right catalysts emerge.

On the support side, a move below the support at $19.00 will be a worrisome development for silver bulls due to the importance of this level. If this happens, silver may gain downside momentum and head towards the next support at $18.50.

At this point, silver maintains solid chances to develop more momentum as weak U.S. dollar and declining gold/silver ratio serve as bullish catalysts.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Stocks Set To Open Higher On Vaccine Hopes

Moderna COVID-19 Vaccine Shows Promising Results In Phase 1 Trial

Moderna shares are up more than 15% in premarket trading as the company’s vaccine for coronavirus produced antibodies in all patients that participated in the current phase 1 trial.

Other vaccine-related stocks are also gaining ground during the premarket session. Pfizer is up about 1.5% while BioNTech SE is gaining about 4%.

As the coronavirus situation in the world gets worse day by day, market participants realize that an effective vaccine is the only way to get back to normal life and business.

Therefore, any positive news on the vaccine front boost stocks. Not surprisingly, S&P 500 futures are gaining ground in premarket trading and stocks look ready to test multi-month highs.

U.S. Ends Preferential Treatment Of Hong Kong

Meanwhile, U.S. – China tensions continue to increase. U.S. President Donald Trump revoked Hong Kong’s special status due to the implementation of a new national security law.

This move means that Hong Kong will no longer get special economic terms and will not have access to certain technologies.

In turn, China promised to impose sanctions on U.S. individuals and entities. At this point, the details of these sanctions are not known.

The deterioration of U.S. – China relations continues as countries start to implement various measures against each other on a weekly basis. For now, the market ignores the risks of a new round of trade war between U.S. and China because it is preoccupied with coronavirus.

Oil Will Likely Try To Break Out Of The Current Range

Oil has been stuck near the $40 level for many trading sessions. It made several attempts to settle below this level but these attempts were met with increased buying activity.

Yesterday, API Crude Oil Stock Change report showed that crude inventories decreased by 8.32 million barrels. If this data is confirmed by today’s EIA Weekly Petroleum Status report, oil will likely try to get above the nearest resistance at $41.50 and continue the upside move.

This scenario will be bullish for oil-related equities which have been struggling to develop upside momentum since mid-June. In addition, an upside move in the oil market will help S&P 500 get to new highs.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – Vaccine Hopes Put Pressure On U.S. Dollar

GBP/USD Video 15.07.20.

British Pound Rebounds After Sell-Off

GBP/USD did not manage to settle below the 20 EMA at 1.2530 and rebounded closer to 1.2600 as the U.S. dollar continued to lose ground amid hopes for a vaccine against COVID-19.

A report in the New England Journal of Medicine stated that Moderna‘s vaccine produced antibodies to COVID-19 in all patients who were taking part in the ongoing phase 1 trial.

A successful vaccine against coronavirus would be a game-changer for the world so markets are very sensitive to vaccine news.

Following the report, the U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, continued its downside move and declined closer to the 96 level.

A move below this level could lead to increased downside momentum for the American currency and provide additional support to GBP/USD.

The UK has just reported Inflation Rate and Core Inflation Rate for June. Inflation Rate was 0.1% month-over-month compared to analysts’ consensus of 0%. Core Inflation Rate was 0.2% month-over-month while analysts expected that it will remain in the negative territory. On a year-over-year basis, Inflation Rate was 0.6% while Core Inflation Rate was 1.4%.

A similar picture was seen in the U.S. where Inflation Rate and Core Inflation Rate were also a bit higher than the analyst consensus. On a month-over-month basis, the U.S. Inflation Rate was 0.6% while Core Inflation Rate was 0.2%. Stronger inflation suggests a quicker-than-expected rebound in consumer activity.

Technical Analysis

gbp usd july 15 2020

GBP/USD received support at the 50 EMA at 1.2490 and quickly rebounded above the 20 EMA at 1.2530. The nearest resistance level for GBP/USD is located at the high end of the current trading range at 1.2650.

This level has already been tested many times, and GBP/USD failed to develop additional momentum above 1.2650. In case GBP/USD manages to get above this level, it will head towards the next resistance at 1.2750.

On the support side, the nearest support level for GBP/USD is located at the 20 EMA at 1.2530, while the main support is at the 50 EMA at 1.2490. A move below the 50 EMA will signal a change of a near-term trend.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Daily Forecast – Attempt To Test The 50 EMA Level Is Not Successful

USD/CAD Video 14.07.20.

U.S. Dollar Tries To Gain More Upside Momentum

USD/CAD continues its attempts to settle above the 20 EMA at 1.3590 despite the fact that the U.S. dollar is showing weakness against a broad basket of currencies while oil stays glued to the $40 level.

The U.S. Dollar Index has settled below the 96.5 level and continues to move lower. Renewed virus worries related to California’s decision to reimpose some virus containment measures failed to provide additional support to the American currency which served as a safe haven asset of last resort during the current crisis.

The U.S. has recently provided Inflation Rate and Core Inflation Rate reports for June which were a bit higher than expected. Inflation Rate increased by 0.6% month-over-month while Core Inflation Rate grew by 0.2% month-over-month.

Gasoline prices recovered together with the price of oil and contributed to inflation. Meanwhile, oil continues to stay near the $40 level as the current bullish trend remains intact. This is a supportive catalyst for the Canadian currency but oil needs to go higher to provide material support to the Canadian dollar.

Tomorrow, the Bank of Canada will announce its Interest Rate Decision. The Interest Rate is expected to stay intact at 0.25% but the Bank’s comments may have material impact on USD/CAD trading.

Technical Analysis

usd cad july 14 2020

Earlier, USD to CAD was gaining ground and tried to test the 50 EMA at 1.3655 level but lost momentum and declined closer to the 20 EMA level. At this point, the 50 EMA level remains a very serious obstacle on the way up for USD to CAD. I’d note that the previous upside move was stopped right at the 50 EMA.

In case USD to CAD manages to settle above the resistance at the 50 EMA, it will gain more upside momentum and head towards the next important resistance level at 1.3730.

On the support side, a move below the 20 EMA will once again put USD to CAD back into the trading range between the support at 1.3500 and the resistance at the 20 EMA. However, it is likely that USD to CAD bulls will provide serious support at the 20 EMA.

For a look at all of today’s economic events, check out our economic calendar.

Oil Stays Near $40 As Traders Focus On Demand Recovery

Oil Video 14.07.20.

OPEC Increases Its Global Oil Demand Outlook

OPEC has just published its Monthly Oil Market Report for July. OPEC has decided to revise its previous demand outlook by 0.1 million barrels per day (bpd) to a decline of 8.9 million bpd.

The positive revision is due to better-than-expected economic data from OECD countries. OPEC’s outlook does not take into account potential coronavirus-related disruptions which are in spotlight following California’s decision to reimpose virus containment measures after a surge in the number of new coronavirus cases.

For 2021, OPEC expects demand growth of as much as 7 million bpd. This growth will still put 2021 oil demand below 2019 levels. Interestingly, OPEC expects that it will satisfy demand for 6 million bpd out of the additional 7 million bpd demanded by the market in 2021.

Such a forecast implies that U.S. domestic oil production will not rebound fast while current production cuts will lead to reservoir damage in some non-OPEC countries (for example, Russia may have trouble bringing all of its production back due to geology and climate).

As OPEC believes that it will supply most of additional oil in 2021, it’s high time to decrease current production cuts from 9.6 million bpd to 7.6 million bpd. This decision is likely to be announced this week.

OPEC+ Compliance With Oil Production Cuts In June Was 107%

According to a Reuters report, OPEC+ panel indicated that compliance with production cuts was 107% in June.

This strong compliance provided additional support to the market and helped WTI oil settle near the $40 level.

Right now, the biggest risk for oil price upside is the potential second wave of lockdowns. Delta Air Lines CEO has already stated that demand was stalling due to the surge in the number of new coronavirus cases as well as due to additional virus containment measures.

At this point, airline demand is not going down but slower recovery will put current oil demand forecasts under question.

For now, oil continues to trade near $40 after several attempts to settle below this level which highlights the strength of the current upside trend. However, oil needs additional catalysts to gain more upside momentum. Such catalysts could be delivered by the upcoming API Crude Oil Stock Change and EIA Weekly Petroleum Status reports.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Silver Tries To Stay Above $19.00

Silver Video 14.07.20.

Silver Attempts To Gain More Upside Momentum

Silver battles to stay above the key $19.00 level as the U.S. dollar is mixed against a broad basket of currencies while gold trades near the psychologically important $1800 level.

Yesterday, silver managed to get above the yearly highs at $19.00 and tried to gain more upside momentum. However, California’s decision to reimpose some virus containment measures put pressure on global markets and pushed silver back to $19.00.

Interestingly, fear of new lockdowns did not provide much support to the U.S. dollar which has served as a safe haven asset of last resort during the current crisis.

The U.S. Dollar Index stays near the 96.5 level and continues to trend down. Weaker U.S. dollar is bullish for silver and other precious metals as it makes them cheaper for investors who have other currencies.

Meanwhile, gold is consolidating near the $1800 level after the recent upside move. Unprecedented monetary stimulus from the world central banks as well as fears about the second wave of lockdowns remain the key catalysts for additional gold price upside.

Gold/silver ratio has settled below 95 after a rapid downside move in the recent trading sessions. In case gold/silver ratio returns to pre-pandemic levels below 90, silver will have more upside from current levels.

Technical Analysis

silver july 14 2020

Currently, silver attempts to settle above the $19.00 level and continue the upside move. RSI has entered the overbought territory but it is not extremely overbought so there’s still plenty of room to build upside momentum.

If silver manages to gain more upside momentum, it will head towards the next resistance level at $19.50. A move above $19.50 will open the way to the next resistance at $20.00.

On the support side, silver is already enjoying some support at $19.00 which provides optimism to silver bulls. In case silver manages to settle below $19.00, it will head towards the next support level at $18.50.

The 20 EMA is located at $18.25 and is set to rise to higher levels so the support in the $18.50 area will likely be very significant.

Currently, silver continues its upside trend and has good chances to gain more momentum and get to multi-year highs.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Stocks Mixed As Traders Focus On Banks’ Earnings

The Market Ignores New Virus Containment Measures And Continued Deterioration In U.S. – China Relations

S&P 500 futures are mixed in premarket trading despite California’s decision to introduce new virus containment measures and additional deterioration in U.S. – China relations.

Facing a surge in the number of new coronavirus cases, California decided to shut bars and close indoor dining. In addition, the hardest-hit counties will have to close gyms, hair salons and churches.

Yesterday, this decision led to a massive reversal of S&P 500 during the trading session but this sell-off did not get any continuation.

Meanwhile, U.S. – China relations got a fresh blow after U.S. rejected China’s claims in the South China Sea, calling them “unlawful”. At this point, the market continues to ignore risks of a new round of U.S. – China trade war.

Citigroup, JPMorgan and Wells Fargo Open The Earnings Season For Banks

Banks’ earnings are the main reason for market optimism this morning. Citigroup, JPMorgan and Wells Fargo have just provided their second-quarter reports.

JPMorgan reported earnings of $1.38 per share and increased its reserves by $8.81 billion. Analysts expected earnings of $1.23 per share.

Citigroup’s earnings were much better than expected at $0.50 per share compared to analyst consensus of $0.27 per share. Not surprisingly, Citigroup increased its reserves by $5.6 billion.

Wells Fargo reported a loss of $0.66 per share which was worse than the analyst consensus which called for a loss of $0.10 per share. The bank had to increase its reserves by $8.4 billion. In addition, Wells Fargo decided to cut its dividend by as much as 80%.

Citigroup and JPMorgan shares are up in premarket trading while Wells Fargo is under pressure which is not surprising given the massive dividend cut. The huge increase in reserves was expected given the current market situation. In my opinion, it’s a good start for the earnings season as stronger banks easily exceeded analyst expectations.

Inflation Rate Gets Back To The Positive Territory

The U.S. has just provided Inflation Rate and Core Inflation Rate reports for June. Inflation Rate increased by 0.6% month-over month in June compared to a decrease of 0.1% in May. On a year-over-year basis, Inflation Rate was also 0.6%.

Core Inflation Rate grew by 0.2% month-over-month. On a year-over-year basis, Core Inflation Rate increased by 1.2%.

Both Inflation Rate and Core Inflation Rate were a bit higher than expected which shows that customer activity has likely started to rebound in June.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – Fear Of New Lockdowns Supports U.S. Dollar

GBP/USD Video 14.07.20.

Demand For Safe Haven Assets Increases As California Reimposes Virus Containment Measures

GBP/USD failed to settle above the high end of the current trading range at 1.2650 and declined closer to the 20 EMA at 1.2520 as the U.S. dollar gained ground against a broad basket of currencies after California reimposed some virus containment measures.

California’s Governor Gavin Newsom decided to close bars, restaurants, museums, movie theatres as the number of new coronavirus cases surged. In the hardest-hit counties, churches, hair salons and gyms will also have to close. In addition, children will not return to schools in August in Los Angeles and San Diego.

This is a major setback for the whole U.S. economy as California is the state with the biggest GDP in the country. Not surprisingly, demand for safe haven assets increased after California introduced new restrictions.

The U.S. Dollar Index, which has previously been trying to get to the test of the 96 level, has returned back above 96.5.

U.S – China tensions also play a role in the recent increase in demand for safe haven assets as the U.S. stated that China did not have the rights for most of the disputed offshore resources in South China Sea.

The UK has just released Industrial Production and Manufacturing Production reports for May. Industrial Production increased by 6% month-over-month while Manufacturing Production grew by 8.4% as the British economy started to reopen.

On a year-over-year basis, Industrial Production declined by 20% while Manufacturing Production decreased by 22.8%. June reports should look better as the economy continued its rebound after the acute phase of the crisis.

Technical Analysis

gbp usd july 14 2020

GBP/USD failed to gain upside momentum and continued to trade in the range between the major support level at 1.2250 and the major resistance level at 1.2650.

GBP/USD made several attempts to settle above 1.2650 but these attempts were unsuccessful. GBP/USD will need significant upside catalysts to get above 1.2650 and head towards the next resistance level at 1.2750.

On the support side, the nearest support for GBP/USD is located near the 20 EMA at 1.2520. A move below this level will push GBP/USD towards the next support level at the 50 EMA at 1.2480.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Daily Forecast – Attempt To Settle Above The 20 EMA Yields No Results

USD/CAD Video 13.07.20.

Canadian Dollar Gains Ground As Demand For Riskier Assets Remains Strong

USD/CAD is still stuck in the range between the support level at 1.3500 and the resistance level at the 20 EMA at 1.3590 as the U.S. dollar loses ground against a broad basket of currencies while WTI oil continues to trade above the $40 level.

With no important economic reports scheduled to be released today, USD/CAD trading dynamics will depend mostly on market sentiment.

The U.S. Dollar Index has settled below 96.5 and continues its downside move as traders remain optimistic ahead of the active phase of the second quarter U.S. earnings season.

In addition, hopes for a vaccine against COVID-19 have managed to offset the negative data on the virus front. On Sunday, the World Health Organization has reported a record daily increase in the number of new coronavirus cases. Meanwhile, WHO Director General stated that the situation was getting worse.

However, such warnings did not put any pressure on riskier assets as traders continue to bet on a fast economic recovery. Recently, oil tried to settle below the $40 level but quickly returned back above $40, providing additional support to the Canadian dollar.

While the global market optimism is bearish for the U.S. dollar which has played the role of a safe haven asset of last resort during the current crisis, USD/CAD will need additional catalysts to get out of the current range and gain more momentum.

Technical Analysis

usd cad july 13 2020

USD to CAD has recently made an attempt to settle above the 20 EMA at 1.3590 but this attempt was not successful so USD to CAD returned back to the previous trading range.

In case USD to CAD manages to settle above the 20 EMA, it will head towards the next resistance level at the 50 EMA at 1.3655.

The 50 EMA has served as a serious resistance level during the previous upside move which was stopped above 1.3700, and I expect that it will remain a significant obstacle on the way up.

On the support side, a move below 1.3500 will lead to increased downside momentum and push USD to CAD towards the next support level at 1.3440.

For a look at all of today’s economic events, check out our economic calendar.

Oil Mixed As OPEC+ Is Set To Increase Production In August

Oil Video 13.07.20.

Saudi Arabia Wants To Increase OPEC+ Production by 2 Million Barrels Per Day

WTI oil is under some pressure but stays above the $40 level after a Wall Street Journal report stated that Saudi Arabia wanted to increase OPEC+ output by 2 million barrels per day (bpd) from August.

This decision is not surpising since OPEC+ was initially set to reduce its oil production cuts from 9.6 million bpd to 7.6 million bpd in July but agreed to extend production cuts of 9.6 million bpd by one month.

Oil has stabilized near the $40 level while the U.S. domestic oil production has settled near 11 million bpd so OPEC+ countries believe it’s time for a modest production increase.

It remains to be seen whether traders will be seriously worried about the 2 million bpd increase in oil production which will begin in August. In my opinion, the continued spread of coronavirus is a bigger problem as it may lead to new lockdowns and put pressure on oil demand.

Recently, International Energy Agency has improved its outlook for oil demand in 2020, providing support to oil prices. However, any setbacks in the reopening of the world economy will put the current oil demand outlook under question.

The Number Of U.S. Drilling Rigs Continues To Fall

Baker Hughes reported that the number of U.S. drilling rigs had declined by 5 to 258. The number of rigs drilling for oil declined by 4 to 181.

This is a very interesting development since it seemed that the number of U.S. drilling rigs has stabilized and that U.S. domestic oil production has started to rebound.

In this light, it is especially interesting to see the new oil inventories numbers. API Crude Oil Stock Change report is scheduled to be released on Tuesday, while EIA will provide its Weekly Petroleum Status Report on Wednesday.

In case the U.S. domestic oil production dips below 11 million bpd while crude inventories fall, WTI oil may get the catalysts needed to continue the upside trend.

Oil’s recent attempt to settle below the $40 level was met with increased buying activity so oil should have decent chances to move higher in case the upcoming reports show that crude inventories and U.S. domestic oil production are declining.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Silver Breaks Above $19.00

Silver Video 13.07.20.

Silver Gains More Upside Momentum

Silver managed to get above the major resistance at yearly highs at $19.00 as the U.S. dollar continued to lose ground against a broad basket of currencies while gold/silver ratio declined below 95.

Gold continues its upside move despite the optimism in the equity markets as traders shop for protection against a potential market sell-off and bet that the unprecedented monetary stimulus from the world central banks will continue to push precious metals’ prices higher.

Meanwhile, gold/silver ratio dropped below 95 and moved towards the 94 level. Before the pandemic, gold/silver ratio was below 90. In my opinion, a return to pre-pandemic levels is a viable scenario which will provide additional support to silver.

The U.S. dollar shows weakness as traders prefer gold as a safe haven asset, and the U.S. Dollar Index has settled below 96.5. Weaker dollar is bullish for silver and other precious metals as it makes them cheaper for buyers who have other currencies.

In short, the setup remains very favorable for silver. Gold stays above $1800 per ounce and has good chances to continue its upside move. Meanwhile, gold/silver ratio is declining and looks ready to test pre-pandemic levels below 90. The weak U.S. dollar provides additional support to silver.

In my opinion, silver has better chances to settle above $19.00 and continue the upside trend compared to the previous attempt to gain upside momentum above this level that took place in the August of 2019.

Technical Analysis

silver july 13 2020

Silver got above the key resistance at $19.00 and continues its upside move. The nearest resistance is $19.50, near the high of the previous attempt to settle above $19.00.

In case silver manages to settle above $19.50, it will gain additional upside momentum and head towards the next resistance at $20.00. I’d note that silver has not visited such levels since 2016.

On the support side, the previous resistance at $19.00 will likely serve as the first support level for silver because traders who have missed the initial move above this level will try to buy the pullback if it occurs.

If silver moves below $19.00, it will likely gain downside momentum and head towards the next support level at $18.50.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Stocks Set To Open Higher As Traders Increase Their Bets On Economic Recovery

The Earnings Season Begins

Finally, the stock market optimism will be tested by quarterly earnings data from U.S. – listed companies. This week marks the real start of the earnings season.

The most interesting reports will come from banks whose stocks were hit hard by the coronavirus pandemic. This week, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs and Morgan Stanley will provide their second-quarter results.

Most likely, the market will focus on the banks’ earnings outlook since the second-quarter is expected to look bad.  For example, Citigroup’s earnings are expected to decline from $1.06 per share in the first quarter to just $0.27 per share in the second quarter.

While traders wait for the upcoming earnings reports, S&P 500 futures are gaining ground in the premarket trading session, and the U.S. stock market is set to continue its upside trend.

China Announces Sanctions Against U.S. Senators

In the previous week, the U.S. has sanctioned high-ranked Chinese officials for alleged human rights abuse against Uighur minority in China. China promised to introduce counter-measures but did not provide any details about such measures at that time.

Today, these counter-measures were revealed. China decided to announce sanctions against U.S. Senators Marco Rubio and Ted Cruz. U.S. Representative Chris Smith as well as U.S. Congressional-Executive Commission on China were also put on sanctions list.

This move marks another increase in U.S. – China tensions which have unnerved the market for quite some time. While these sanctions will not have a direct impact on day-to-day business life, they show that both U.S. and China are ready to take new steps in their battle against each other, which is a major risk factor as the world economy tries to recover from the hit dealt by the coronavirus pandemic.

Inflation Is Expected To Return Back Into The Positive Territory

Tomorrow, the U.S. will provide Inflation Rate and Core Inflation Rate reports for June.

Inflation Rate is expected to grow from -0.1% to 0.5% on a month-over-month basis as consumer activity increased.

Any weakness in Inflation Rate will likely be interpreted as a sign that consumers are still anxious about their financial perspectives and that more stimulus is needed to improve the situation.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – Another Attempt To Settle Above 1.2650

GBP/USD Video 13.07.20.

Demand For Riskier Assets Supports British Pound

GBP/USD continues its attempts to settle above the major resistance level at the high end of the current trading range at 1.2650 as the U.S. Dollar loses ground against a broad basket of currencies.

The U.S. Dollar Index is trying to settle below the 96.5 level after an unsuccessful attempt to get above 97. The U.S. Dollar Index remains in a downside trend as traders bet that the world central banks will continue to provide monetary stimulus to boost the economy. This scenario is favorable for riskier currencies like the British pound.

In addition, the market hopes that either an effective drug against COVID-19 or a vaccine will be available soon. Such a development would be a game-changer for the world economy as it will eliminate fears of the second wave and allow all businesses to reopen at full speed.

Meanwhile, the World Health Organization has reported a record daily increase in the number of global coronavirus cases on Sunday. More than 230,000 people got infected with COVID-19 in one day.

The markets completely ignore the continued problems on the coronavirus front as optimism prevails. This optimism will soon be tested as the earnings season begins in the U.S. Financial results of U.S. companies will surely have a major impact on the global risk sentiment.

Technical Analysis

gbp usd july 13 2020

GBP/USD is trying to get above the major resistance at 1.2650. If this attempt is successful, GBP/USD will have a good chance to establish a new upside trend after spending several months in a range between 1.2250 and 1.2650.

The nearest resistance for GBP/USD is located at 1.2750. In June, GBP/USD has already tested this resistance but failed to settle above it and returned to the previous trading range.

In case GBP/USD manages to settle above 1.2750, it will head towards the high of the previous upside move at 1.2815.

On the support side, the nearest support for GBP/USD is located at the 20 EMA at 1.2530. If GBP/USD moves below this level, it will head towards the 50 EMA at 1.2480.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Daily Forecast – Oil Price Rebound Supports Canadian Dollar

USD/CAD Video 10.07.20.

Better-Than-Expected Employment Change Report Provides Additional Support To The Canadian Dollar

USD/CAD tried to settle above the resistance at the 20 EMA at 1.3590 but reversed course after the U.S. dollar started to show weakness against the broad basket of currencies while oil rebounded closer to the $40 level.

The U.S. Dollar Index did not manage to settle below the nearest resistance at 97 and declined to 96.5 after Gilead Sciences revealed positive results of late-stage study on remdesivir which is tested against coronavirus.

Meanwhile, oil failed to gain downside momentum and returned back to recent levels, providing support to commodity-related currencies like the Canadian dollar.

Canada has just reported employment data for June. Employment Change report showed that the economy added 952,900 jobs in June as businesses reopened and hired workers. Analysts expected that the economy will add 700,000 jobs.

Meanwhile, Unemployment Rate decreased from 13.7% in May to 12.3% in June compared to analyst consensus of 12%.

Interestingly, the Employment Change report was better than expected while Unemployment Rate missed analysts’ expectations.

This phenomenon is explained by the increase in Participation Rate which grew from 61.4% in May to 63.8% in June.

A combination of better-than-expected Employment Change report, rising oil prices and renewed optimism about the potential drug against coronavirus provided material support to the Canadian dollar and forced USD/CAD back into the previous trading range between the support at 1.3500 and the resistance at the 20 EMA at 1.3590.

Technical Analysis

usd cad july 10 2020

As I mentioned above, USD to CAD is back to the 1.3500 – 1.3590 trading range. However, it maintains chances to settle above the 20 EMA and develop upside momentum.

In this case, USD to CAD will head towards the next resistance level at the 50 EMA at 1.3660. A successful test of this level will open the way to another major resistance level at 1.3730. The previous serious attempt to develop upside momentum was stopped at this level.

Nothing has changed on the support side for quite some time – the main support level is located at 1.3500, and a move below this level will likely lead to a sell-off which will quickly take USD to CAD to the next support level at 1.3440.

For a look at all of today’s economic events, check out our economic calendar.

Oil Stays Near $40 After Failed Attempt To Gain Downside Momentum

Oil Video 10.07.20.

IEA Improves Its Demand Outlook

International Energy Agency has just provided its closely watched Oil Market Report for July 2020.

According to IEA, the world oil demand fell by 16.4 million barrels per day (bpd) in the second quarter due to lockdowns. Meanwhile, oil supply fell to 86.9 million bpd in June thanks to production cuts from OPEC+ members and natural production cuts from other countries, including U.S. and Canada.

Demand is rebounding faster than expected, and IEA has once again improved its full-year demand outlook to 92.1 million bpd in 2020. For 2021, IEA projects that demand will total 97.4 million bpd. Jet/kerosene consumption makes up the majority of the difference between pre-pandemic demand and demand in 2021.

Interestingly, IEA expects that U.S. oil production will start to increase in the second half of this year. Currently, the U.S. oil production has stabilized at 11 million bpd after reaching a near-term low at 10.5 million bpd.

IEA also expects that Libya can grow its production by as much as 0.9 million bpd by the end of this year. In my opinion, this is a very optimistic assumption since Libyan oil industry experiences severe challenges due to civil war and many attempts to boost production have failed.

Oil Demand Depends On Success In Battle Against COVID-19

IEA noted that pandemic was not under control so the risk to its market outlook was shifted to the downside.

Today’s oil price dynamics are a vivid reminder of the impact of the virus situation on the mood of oil traders.

Earlier, oil was under pressure as traders were worried about another record increase in the number of coronavirus cases in the U.S.

However, WTI oil managed to rebound closer to the $40 level after Gilead Sciences announced that its antiviral drug remdesivir, which is tested against coronavirus, showed success in a late-stage study.

The key question for the oil market right now is whether the recent surge in the number of coronavirus cases will put significant pressure on economic activity and mobility.

If this does not happen, oil has good chances to stay near the $40 level. At the same time, oil will most likely need significant positive catalysts to continue its upside trend and get away from current levels.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Silver Stays Above $18.50

Silver Video 10.07.20.

Silver Tries To Get To The Second Test Of The Major Resistance At $19.00

Silver failed to get above the major resistance at $19.00 on its first attempt but stayed above $18.50 as gold received support above the $1800 level while the U.S. dollar declined against a broad basket of currencies.

Today, the market was initially worried about the worsening situation on the coronavirus front as the U.S. has recorded a record number of daily coronavirus cases.

However, the global risk sentiment got a boost after Gilead Sciences reported that it had additional data from a late-stage study on remdesivir which showed that it significantly improved recovery and reduced death risks in COVID-19 patients.

After this news, the U.S. Dollar Index, which has previously tried to get above the 97 level, declined towards 96.5. A weaker U.S. dollar is bullish for silver and other precious metals as it makes them cheaper for buyers who have other currencies.

Meanwhile, gold managed to find support near the $1800 level and continues its upside move. Gold price upside is very important for other precious metals since it attracts more investment money into the segment.

As I wrote yesterday, The Silver Institute reported that silver investment demand increased by 10% in the first half of 2020. As precious metals continue their upside move, investment demand is set to increase further.

Gold/silver ratio continues its downside trend and remains below 97. Gold/silver ratio will have to settle below 95 to gain more downside momentum which will be bullish for silver.

Technical Analysis

silver july 10 2020

Silver found support at $18.50 and will likely make another attempt to get above the major resistance at $19.00 soon.

Compared to the previous attempts to get above this level which took place at the beginning of the year, silver has better chances to gain more upside momentum.

If this happens, silver will head towards the next resistance level at $19.50.

On the support side, the first support for silver is located at the previous resistance near $18.50. A move below this support level will likely lead to increased downside momentum and take silver closer to the next support level near the 20 EMA at $18.00.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Stocks Set To Open Lower As Traders Focus On Virus Data

U.S. Reports More Than 60,000 New COVID-19 Cases For Second Day In A Row

On Thursday, the U.S. reported another record daily increase in the number of coronavirus cases. The pandemic shows no sign of slowdown and starts to put pressure on stocks which continue to trade on high levels.

Most market observers do not expect that the U.S. will implement a second full lockdown as the economy will not be able to take a second hit of this size. Still, the rising number of infected will inevitably put pressure on economic activity as consumers will stay worried about their financial position and health.

Previously, the market has mostly ignored the bad news on the coronavirus front as traders bet that monetary stimulus will continue to provide support for asset prices.

Today, S&P 500 futures are losing some ground in the premarket trading session but it remains to be seen whether stocks will finish the day in the red zone as many traders are focused on buying any pullbacks.

U.S. – China Relations Continue To Deteriorate

The U.S. has sanctioned high-ranked Chinese officials due to alleged human rights abuses against Uighur minority in China.

China has already stated that it will introduce counter-measures against the U.S. China did not provide any details about such measures.

U.S. – China relations are in a clear downtrend which may pose risks for the world economic recovery if countries start to implement more serious measures against each other. For now, the announced sanctions will have no impact on global trade.

WTI Oil Dips Below The $40 Level

Yesterday, I wrote that trading in a tight range was not typical for a volatile commodity like oil. Apparently, some traders lost patience waiting for an upside breakout, and oil declined below the important $40 level.

At this point, oil did not develop significant downside momentum. Currently, it trades near the $39 level. If the downtrend accelerates, oil-related stocks will decline to lower levels, putting additional pressure on S&P 500.

The next few trading sessions will show whether oil has sufficient support below $40. Without such support, oil may soon find itself closer to the 50 EMA at $36.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – Virus Worries Boost U.S. Dollar

GBP/USD Video 10.07.20.

British Pound Loses Ground As Demand For Riskier Assets Decreases

GBP/USD declined below 1.2600 as the U.S. dollar strengthened against a broad basket of currencies amid fears that the coronavirus pandemic was getting out of control.

On Thursday, the U.S. has once again reported more than 60,000 new cases of the disease, and traders started to seriously evaluate chances of new lockdowns.

The U.S. released better-that-expected employment reports but they were not able to provide support to riskier assets. Initial Jobless Claims declined to 1.31 million while Continuing Jobless Claims fell to 18.1 million.

In addition to virus fears, demand for safe haven assets is supported by another increase in U.S. – China tensions. The U.S. sanctioned several high-ranked China officials over alleged human rights abuses against Uighur minority.

The markets are worried that the continued deterioration of U.S. – China relations comes at the worst possible time when the world economy tries to rebound while the global number of new virus cases continues to surge.

With no big economic reports scheduled to be released today, GBP/USD dynamics will mostly depend on market sentiment. If traders remain focused on the virus, GBP/USD will stay under pressure.

Technical Analysis

gbp usd july 10 2020

GBP/USD has once again failed to settle above the major resistance at the high end of the current trading range at 1.2650. Since April, GBP/USD made five attempts to get above this level but only one such attempt was successful.

However, even this attempt did not lead to a new upside trend since GBP/USD quickly lost momentum and returned to the previous range between the support at 1.2250 and the resistance at 1.2650.

At this point, it looks like GBP/USD will need significant upside catalysts to settle above 1.2650. If this happens, it will head towards the next resistance level at 1.2750.

On the support side, the nearest support area is located between the 20 EMA at 1.2500 and the previous resistance level at 1.2530. In addition, the 50 EMA is located at 1.2470 so GBP/USD is set to receive strong support near 1.2500.

A move below this level will signal a return to the local downside trend. From a big picture point of view, GBP/USD has once again proved that it continues to trade in a wide 1.2250 – 1.2650 range.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Daily Forecast – U.S. Dollar Gains Ground As Virus Worries Return

USD/CAD Video 09.07.20.

WTI Oil Falls Below The $40 Level And Puts Additional Pressure On The Canadian Dollar

USD/CAD managed to rebound from the support level at 1.3500 but stays below the 20 EMA at 1.3590 as the U.S. dollar is gaining ground against a broad basket of currencies while oil is under pressure.

Earlier, the U.S. dollar experienced weakness as the market mood was positive following the release of better-than-expected U.S. Initial Jobless Claims and Continuing Jobless Claims reports.

The Initial Jobless Claims report showed that 1.31 million Americans filed for unemployment benefits in a week. Meanwhile, Continuing Jobless Claims dropped to 18.1 million as some workers managed to find new jobs.

However, market sentiment changed quickly after the release of U.S. employment reports as traders focused on the worsening coronavirus situation in the U.S. On Wednesday, the U.S. has registered more than 60,000 new cases of the disease.

Renewed worries about potential lockdowns increased demand for safe haven assets and provided support to the U.S. dollar.

At the same time, the Canadian dollar found itself under pressure as WTI oil fell below the key $40 level. There was no specific catalyst for this move, and it looks like general virus worries put pressure on oil.

Canadian oil benchmarks mostly trade in sync with the leading world benchmarks like Brent and WTI so the downside move of WTI oil is negative for the Canadian dollar.

Technical Analysis

usd cad july 9 2020

USD to CAD continues to trade in a range between the support at 1.3500 and the resistance at the 50 EMA at 1.3590. Recent trading sessions have been volatile but USD to CAD did not manage to get out of this range.

In case USD to CAD manages to settle above the 20 EMA, it will likely develop upside momentum and head towards the next resistance level at the 50 EMA which has declined to 1.3665.

On the support side, USD/CAD will need to settle below 1.3500 to gain downside momentum. A move below this level will be a material bearish development for USD/CAD which will head towards the next support level at 1.3440.

For a look at all of today’s economic events, check out our economic calendar.

Oil Under Pressure As Some Traders Lose Patience Waiting For An Upside Breakout

Oil Video 09.07.20.

Oil Does Not Have Enough Near-Term Catalysts To Get Above $41

Oil traded in a very tight range for six sessions in a row and a move out of the range between $40 and $41 was long overdue.

Currently, it looks like the first move may be to the downside as oil is trying to settle below the $40 level.

On Wednesday, the U.S. has reported more than 60,000 new cases of coronavirus, and some traders fear that the continued deterioration of the virus situation may lead to new lockdowns.

In addition, the recent inventory report did not provide reasons for optimism as crude inventories increased by 5.7 million barrels. Gasoline inventories decreased by 4.8 million barrels but that’s normal for the driving season. In fact, I’d bet that many traders expected to see better inventory dynamics.

Oil is a volatile commodity and it cannot stay glued near one level for many days. Ultimately, it will have to follow the path of least resistance. At this point, the risk may be shifting to the downside as the oil market simply lacks additional catalysts to continue the upside move, and a healthy correction may be due.

OPEC+ Will Not Extend Current Production Cuts For August

On July 15, the market monitoring panel of OPEC+ will meet to discuss the recent developments in the oil market. Currently, OPEC+ has agreed to cut production by 9.6 million barrels per day (bpd) until the end of July.

In August, production cuts will decrease to 7.6 million bpd so an additional 2 million barrels of oil will be supplied to the market.

The main intrigue is whether OPEC+ will prefer to provide additional support to the market and extend current cuts for August.

In my opinion, this will not happen. OPEC+ countries are struggling from lower levels of production while some countries like Russia may have problems maintaining current production cuts for technological reasons.

In addition, the U.S. domestic oil production has recently jumped from 10.5 million bpd to 11 million bpd. OPEC+ would not like to provide a “free lunch” for the U.S. oil industry and support prices when the market share of its competitor grows day by day.

In this light, oil will need healthy upside in demand to get above the recent trading range since some of the curtailed supply will soon return to the market.

For a look at all of today’s economic events, check out our economic calendar.