M4Markets Announces New 50% Credit Bonus For Clients

Clients are eligible for a 50% Credit Bonus for each new deposit made to a verified live account. Each client can claim up to 5000 USD/EUR/GBP in bonus and get a free margin boost with every deposit made.

The promotion is designed to give a boost to the broker’s growing audience and it is expected that it will attract both beginner and experienced traders who are interested to maximize their deposits and open higher-volume positions.

Commenting on the new promotion, Group CMO, Mrs. Marilena Iakovou noted that “We are committed to offering our traders a unique trading experience and our new promotion goes a long towards achieving that goal. We expect that with this promotion, our clients will have the opportunity to experience our superior trading conditions.”

The broker is set to get a head start in 2021, by not only expanding to new regions, but also through the launch of multiple promotions that will allow traders globally to experience their trading environment.

The new promotion complements the promotion launched for the broker’s partners a few weeks earlier and it is expected that it will be followed by similar promotions in other regions within the next few months.

More information on how to participate in the promotion is available here: https://www.m4markets.com/credit-bonus/

About M4Markets

M4Markets is one of the fastest growing regulated Forex and CFD brokers with a multi-asset offering and a focus on trader experience. With low spreads and no requotes, segregated trust accounts, ultra-fast execution and regulated by the Financial Services Authority (FSA) in the Seychelles, M4Markets is one of the most trusted brokers.

EURGBP Analysis – Can the Last Support Once Again Save Euro from Plummeting

EUR/GBP has touched an important support level at 0.88700 and held above the support. As seen on a 4H chart below, Euro could be in a high danger if it goes down below that support.

Correction of December 25, 2020 has formed a sharp descending triangle and a breakout from its upper edge will signal a strong uptrend. First resistances to watch if the breakout is confirmed are 0.89440 and 0.90000. Resistance at 0.89440 is very important and further price action of the pair upon testing of this level will be decisive.

EUR/GBP quote on Overbit

On the other hand there are two other patterns one should watch when trading EUR/GBP. The chart above has formed a Head and Shoulders pattern and the support of 0.88700 acted as a neckline. Since the pair is still above the neckline there is no confirmation of the pattern, however if the pair closes lower the 0.88700 support it will continue the downtrend to 0.87900 and to 0.86900 below that to complete the Head and Shoulders pattern.

An hourly chart of EUR/GBP has another pattern formed, which supports the downtrend, the inverted cup and handle.

EUR/GBP quote on Overbit

What this pattern in general tells is that bears are in charge and after a slight correction upwards, the downtrend will continue breaking the lowest support, which in this case is 0.88700.

Factors that might support the downtrend of EUR/GBP are extensions of lockdowns in the Eurozone as the number of Covid-19 cases surge in previously highly affected regions such as Spain and Italy. The political developments in Italy also play a significant role in an economic recovery and further stability of the Eurozone. Italy was the hot zone of the Covid-19 pandemic in Europe and had the largest EU aid. The dispute in the government is related to the 750bn Euro bill, where the former PM Renzi wants to invest the money in digital economy and green energy, and the current PM Conte would like to spend 209bn Euro for Covid-19 relief.

The economic data from the UK sounds very promising as well, for instance PPI input (MoM) as per December which will be released tomorrow is expected to be higher by 0.5bp than in November, moreover Retail sales and Core retail sales data from the UK which will be announced this Friday, January 22 are looking very positive. The forecasted Retail sales (MoM) as per December is 5bp higher related to the November’s -3.8.

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

Join the “Classics without Borders” Contest and Get Real Money Prizes

FXOpen has been pleasing traders with its Forex contests for many years, and this time it is launching the contest for beginners and those who have registered with FXOpen no earlier than January 2020. 10 best traders will share the prize fund of 1500 USD.

The “Classics without borders” contest starts on November 30, 2020 and will last until December 24, 2020. Registration is open now and will be closed on December 13, 2020.

Terms of the contest:

  • Start deposit: 5000 USD;
  • Leverage: 1:100;
  • Trading instruments: EUR/USD, GBP/USD, USD/JPY, USD/CHF, USD/CAD, AUD/USD, NZD/USD, EUR/GBP and stocks;
  • Account type: contest demo ECN;
  • Advisors and locking: allowed.

Terms for receiving the prize:

It is required to increase the initial deposit by at least 20%, and to make at least 10 trades with total volume of 10 lots. The winners will be the best 10 Equity traders who have met the above conditions.

How to join the contest?

New users must register in ForexCup and join the contest with data from your personal account. Existing FXOpen clients have to pass verification in MyFXOpen and join the competition with data from MyFXOpen or ForexCup. It should be noted that all contest accounts are blocked until the contest starts.

Please visit FXOpen broker official website to learn more.

Brexit and GBP: A “Move Week”… Maybe?

What we can comment on so far is this: eight months passed, and the EU and the UK are as far away from each other in their divorce process as they are geographically. Still, Irish Foreign Minister Simon Coveney called this week a “move week”. Can it be so indeed?

Really not sure now but let’s orient ourselves in the details of the Brexit status now.

Last week, two major Brexit architects left the camp of Boris Johnson. Lee Cain, offered a position of Chief of Staff, resigned rejecting the offer on Wednesday, and the next day, Dominic Cummings, a central figure and a key aide of the UK PM, announced he would leave duty after the New Year. There was no indication given to what exactly those departures are related to, and observers could not resist giving in to speculations on those reasons and their possible effect on Brexit.

Here, the primary negotiator from the UK side, David Frost, was quick to dissipate any doubt: the British stance will stay as adamant on its demands as it has been until now. Noting that “some progress in a positive direction in recent days”, he explained that the deal “might not succeed” – which by now is quite clear, after more than half a year of pretty fruitless discussions.

Brussels wants London to make concessions first. London wants Brussels to step back first. The UK wants freer access to its own fishing waters referring to the rights of sovereignty; at the same time, it wants to retain access to the European market because this is where most of the catch is sold. In the meantime, Europe wants to keep access to the British fishing waters as well with no desire to make it less than before. Also, it wants EU legislative bodies to be able to enforce the deals. The level playing field for business is the third crucial point where there has been little process.

In a nutshell, none of the sides wants to be the first to step back. In the meantime, EUR/GBP has already touched the summer lows of 0.8900. Why is the pound getting stronger against the euro? Psychologically, that may be explained by the fact that the GBP has more to lose. Hopes of getting Brexit straight push it against the euro, and the last months have been pretty full of hopes – and pretty much nothing more.

Note that in the long-run, the euro is still appreciating against the pound: since the beginning of the year, EUR/GBP moved from 0.83 to above 0.87, and the uptrend hasn’t been broken yet. The September-November bearish incursion may well be just the last ray of hope for the GBP before it softens. Be very careful with the supports of 0.8900 and 0.8870: if this week nothing moves, EUR/GBP may reverse to the upside once again.

This post is written and submitted by FBS Markets for informational purposes only. In no way shall it be interpreted or construed to create any warranties of any kind, including an offer to buy or sell any currencies or other instruments. 

The views and ideas shared in this article are deemed reliable and based on the most up-to-date and trustworthy sources. However, the company does not take any responsibility for accuracy and completeness of the information, and the views expressed in the article may be subject to change without prior notice. 

FXOpen Launches Apple Pay Payments

When you’re making purchases on the web in Safari on your iPhone, iPad, or Mac, you can use Apple Pay without having to create an account or fill out lengthy forms. The payment procedure takes just a touch and is faster and more secure than ever before.

Every transaction made with Apple Pay requires you to authenticate with Touch ID or Face ID developed by Apple Inc.

When you make a purchase with your iPhone or Apple Watch, Apple Pay uses a device-specific number and unique transaction code.

Learn how to set up and start using Apple Pay here.

More details:

  • Currencies: EUR, USD, GBP;
  • Deposit processing time: instant;
  • Minimum deposit: USD/EUR/GBP 1;
  • Maximum deposit: USD 19,000/ EUR 16,000/ GBP 14,000.

Deposit commission is 6%. To celebrate the launch, clients can deposit for free, paying 0% commission.

Deposit via Apple Pay

Learn how to deposit via Apple Pay in our knowledge base.

Indices Try to Catch a Breath. Great Session for USD

Almost all indices collapse and aim for long-term lows.

SP500 is testing the 23,6% Fibonacci.

DAX is very close to reach the 38,2% Fibonacci.

FTSE breaks the lower line of the wedge formation.

CAC reaches crucial support from the first half of the year.

EURUSD breaks the lower line of the flag formation.

EURAUD eventually bounces from the upper line of the sideways trend.

EURGBP in a flag but with inclinations for an upswing.

AUDCHF goes lower after the bounce from a crucial resistance.

WTI Oil breaks the lower line of the symmetric triangle.

Gold goes lower after the escape from the mid-term pennant.

USDPLN breaks the neckline of the inverse Head & Shoulders pattern, it looks bullish.

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

Tips On How To Trade The Currency Pair EUR/GBP

EUR is the Euro, the official currency of most European countries, including Italy, France, Germany, Spain, etc.

Conversely, the official currency of the United Kingdom is GPB (Pound Sterling). Both EUR and GBP currencies have higher individual values than the USD (United States Dollar). If you intend to trade the EUR/GBP, here are tips that can help you.

Tips On How To Trade The Currency Pair EUR/GBP

Understand the base and quote currency

When it comes to trading forex pairs, there’s always a base and quote currency. The pair results from a price comparison of the base and quote currency, which indicates the needed amount of the quote currency for buying the base currency.

In the case of EUR/GBP, the EUR is the base currency, as it comes first, while the GBP is the quote currency, as it comes second.

So, when it comes to trading EUR/GBP, we are looking at how much GBP is needed to purchase EUR. In other words, you are selling GBP to buy EUR.

Furthermore, there are two prices involved, which include the bid price and the asking price. The bid price is the quote currency amount for buying the base currency, while the asking price implies the quote currency amount acquired after selling the base currency.

Consider its low volatility

Volatility has to do with how fast or slow trading prices change. The forex market is volatile, considering the large number of currencies involved. However, the EUR/GBP pair has low volatility; their prices don’t change significantly very often.

As mentioned earlier, both EUR and GBP are among the most strongest currencies in the world. European countries use the Euro while the UK uses the Pound Sterling; hence, the EUR/GBP is a relatively stable currency pair, which makes them heavily traded. A major change in their prices would draw massive attention in the forex market and outside it.

Follow the economic news

When trading any currency pair via forex brokerage houses, it is ideal to follow the economic news so you don’t miss any event that could drive a major price change. This applies as well for the EUR/GBP currency pair; besides, EU countries and the UK are involved.

You should not miss important updates, including new monetary policies, capital input, capital withdrawals, inflation, etc. Notably, the short-term rates of both currencies are influenced by economic data announcements.

Therefore, you should check daily in the morning and evening for economic updates about the GBP and EUR. Furthermore, it is ideal to check political news because they can influence investor decisions.

Trade at the right hours

Trading activity in the Forex market usually reaches a peak during certain periods at major financial cities in the world. Hence, Forex trading is distinguished into three activity sessions: North America (New York), European (London), and Asian (Tokyo) sessions. Notably, the European Forex session in London starts from 7 am to 4 pm (GMT).

Although you can trade at any time in the 24/7 forex market, it is ideal to trade the EUR/GBP pair during the European Forex session; a simple way to remember this is “don’t trade when it is dark in London.”

Look out for trends

If you want to perform a profitable EUR/GBP trade, it is vital to identify ongoing trends. For the EUR/GBP pair, you should either use the EUR/GBP price analysis or a technical trend indicator.

Take, for instance, the 200-Day Period Simple Moving Average; if the chart is trending down and the prices shift below the moving average, it is a bearish trend. To avoid getting false trend signals, you should follow only short signals of the EUR/GBP pair.

Similarly, if the chart is trending up and the prices shift above the moving average, it’s an upward trend. To avoid getting false trend signals, you can follow only long signals of the pair.

Look out for correlation with other pairs

While you have your eyes set on EUR and GBP, you should always look out for other forex pairs and how they correlate. Ideally, you should look out for correlation from the past three months.

Pairs with strong correlation are likely to have EUR or GBP; For example, EUR/JPY and GBP/JPY.

With correlation, you can get trading signals for the EUR/GBP pair. Likewise, currencies with strong correlation are ideal for hedging.


Forex trading is a notable means for making money on the internet, while the EUR/GBP pair is a profitable one to trade.

However, as always advised, Forex trading is risky; there’s no guarantee of returns or profits. Therefore, you should only put in what you can afford to lose.

EURGBP Analysis Ahead of Fishy Brexit Talks

GBP showed significant strength on Friday amid new Brexit negotiation hopes. The deal has faced another dilemma – the fish. UK wants the EU vessels to stay out of the UK waters after the Brexit, while the EU would like to keep access to the UK waters to their vessels after the Brexit under the Common Fisheries Policy. UK officials claim that France and the Netherlands use super-trawlers to empty the UK waters and the PM Boris Johnson vowed to do everything to protect the UK fisheries.

The upcoming week will be a great test for both currencies not only by virtue of the EU summit in Brussels but as remarkable data will be published for both sides of the deal: the UK – Unemployment change, for EU – ZEW Current Conditions and ZEW Economic Sentiment. If the UK leaders are able to convince the EU leaders to accept the deal without postponing it again, the Euro may weaken and continue to fall, if it’s postponed then the GBP will fall against major currencies on weak employment data.

Asides the unemployment data, the upcoming ‘hotspot’ restrictions in the UK, which might eliminate small and medium businesses and result in a labor layoff, could back the downfall of the Pound.

The EUR/GBP pair continued the downtrend after the test of a high at 0.92924 on September 11, remarkable the day UK announced the new trade-deal with Japan.

EUR/GBP quote on Overbit

Two patterns to watch on pair’s 4H-chart are “Bullish flag” and “Triangle”. Euro remained above a crucial support and resistance level and halted the fall at 0.90680, if the pair remains above that level amid UK and EU data, it might as well continue upwards to test the dynamic resistance (upper edge of a triangle once again) at 0.91200. Below this level will result in the pair to test the following static support at 0.90490 if that support is broken then the pair will drop deeper towards 0.90100 to test the static and dynamic resistance, where the “Flag pattern” will be confirmed and the pair will most likely bounce back and continue bullish

Yet MACD is signaling the trend reversal I highly advise to trade with caution as the upcoming week will be highly volatile for both currencies.

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

New Brexit Talks Hits GBP

The European Union is puzzled by such a proposal – trade under the WTO rules involves the restoration of full-fledged borders, which will lead to huge transport delays at the border.

Pound against USD is below the dynamic support of June 30 and a static support of 1.31700, hence GBP probably is going to continue the downtrend until 1.3100 – 1.3000, where an important support level and Fibonacci 0.382 are in position.

GBPUSD quote on Overbit

The same pattern is seen on another major pair traded against GBP – Japanese Yen. At the time of writing this article, the GBPJPY quote on Overbit is 139.576 which is below an important resistance of 139.860 – 139.900 and is below the dynamic support of June 30, hence the drop may continue down to 138.536 – minor support and Fibonacci 0.382 level and to a major support of 138.156

GBPJPY quote on Overbit

EURGBP on the opposite is gaining, the pair is currently traded above the down-trend channel and looks like it will continue the bullish run to test resistances at 0.90585 – 0.91253. If the tensions between EU and GB continue on trade regulations and none of the sides accept the trade conditions between the two, the Pound may continue the downtrend further.

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

EUR/GBP Reversal Prepares for Bullish Break Above 0.9050

The EUR/GBP is building a range above the 21 ema zone (green box) after breaking above the resistance trend lines (dotted purple). The EUR/GBP could be ready for a strong bullish breakout.

Price Charts and Technical Analysis

EUR/GBP 4 hour chart

The EUR/GBP needs to break above the resistance of the previous wave 4. A bullish breakout would confirm the trend and momentum change from down to up. Bullish price action could take place within a wave 3 (purple). The first target is the Wizz 6 level and the previous top. But the start of a wave 3 could push it for a new high and beyond. A bull flag pattern would help confirm the uptrend view (green check).

The EUR/GBP could also break south but the previous bottom is likely to hold. An inverted head and shoulders pattern is likely to act as support for a bullish bounce. Only a break below the bottom invalidates (red x) the current bullish outlook on the EG.

EUR/GBP 4 hour chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

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

Pound Braces for Drama as Brexit Talks Resume

After officially leaving the European Union (EU) almost 6 months ago, uncertainty remains the name of the game as both sides struggle to make headway on Britain’s future relationship with Europe.

The sixth round of Brexit talks resumes today after the previous disappointment. Sterling may be flung into the direct firing line if the United Kingdom and Europe and unable to bridge their difference on EU’s access to British fishing waters and the UK’s alignment to EU rules.

If you are looking for some action and volatility, Pound crosses could be the place to be amid fears around an extended deadlock leading to a no-deal Brexit outcome by the end of 2020.

The GBPUSD continues to ride higher on Dollar weakness with prices slamming into the 1.2670 resistance level.

Yesterday’s rebound from the 1.2550 resistance levels looks strong, with the daily close above1.2650 signalling further upside in the short to medium term. Technical lagging indicators like the 50 & 100 Simple Moving Average support the upside bias while the Moving Average Convergence Divergence (MACD) has also crossed to the upside. The current bullish momentum may send the GBPUSD towards 1.2750. Alternatively, a move back towards 1.2550 suggests that a technical correction could be in play before prices rebound higher.

GBPJPY clears 136.00

The GBPJPY entered the week on a solid note, jumping over 150 pips to clear the 136.00 resistance level. This currency pair is turning bullish on the daily charts with 137.00 acting as the next level of interest.

As the market mood improves on coronavirus vaccine hopes and EU leaders striking a deal on a landmark recovery fund, safe-haven assets like the Japanese Yen are likely to weaken. The GBPJPY is likely to ride higher on Yen weakness in the short term, with a breakout above 137.00 opening the doors towards 138.50.

On the other hand, this party could be crashed by bears if Brexit talks fall apart this week. A move back below 135.00 may inspire a decline towards 133.60 and 134.00.

EURGBP slips towards 0.9000

According to the technicals, the EURGBP is still bullish on the daily charts.

There have been consistently higher highs and higher lows while the Moving Average Convergence Divergence (MACD) trades to the upside. However, prices are trading below the 20 Simple Moving Average. A breakdown below the 0.9000 support level could signal a decline towards 0.8850. If 0.9000 proves to be reliable support, the EURGBP has the potential to rebound towards 0.9100.

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EU Leaders Finally Agree on Pandemic Fiscal Package

US markets saw yet another record for the Nasdaq, while the S&P500 closed at its highest level since late February.

For the last few days all eyes have been on the political theatre going on in Brussels as EU leaders strive to cobble together a recovery fund that will somehow create a consensus between the various interests of 27 member states, and its leaders and deliver help to the likes of Spain, Italy and Greece, whose economies have been hit hardest by the coronavirus pandemic.

The latest compromise appears to be in the form of grants of €390bn, down from the initial €500bn, with low interest loans of €360bn, with the total sum of the pandemic recovery fund set to remain at €750bn. The leaders also agreed as a €1trn budget for the period of the next 7 years.

The Netherlands, led by PM Mark Rutte had insisted on certain changes being made, including a much lower grants figure, however it appears a compromise has been found in the form of a larger rebate. This would be bigger than the one they receive now under current EU budget rules.

These larger rebates would also apply to the other hold-outs including Austria, Denmark and Sweden. The Dutch PM also secured an emergency brake that would allow any country that was not satisfied with attempts by other countries to honour reform promises to call a halt to any monies being allocated to these countries. This brake, however would be time limited to approximately three months, however there were no details as to how any sanction would be applied if a breach were discovered.

The talks at the weekend which have spilled over into this week, have also touched upon the upcoming EU budget, which will need to be increased substantially in the coming years, not only to deal with the current pandemic, but for the EU to be able to meet its climate targets. With the UK leaving the bloc that will also mean much higher contributions from the remaining member nations, something that is proving to be somewhat of a sore spot.

While markets have reacted positively to the prospect that some form of deal will be agreed, with the German DAX leading the way in Europe, it will still need to be approved by all other EU member parliaments over the coming weeks.

This will mean any funds are unlikely to be available until the beginning of next year at the earliest, and even if all the funds are made available, the money will be nowhere near enough to compensate for the billions of euros of lost tax revenue, that has pushed southern European countries even deeper into their fiscal black holes.

While markets have been buoyed by the prospect that this deal has been agreed, the money in question is but a fraction of what is required to help the likes of Italy, Spain and Greece get out of their current difficulties. This deal is likely to be yet another sticking plaster on a dysfunctional monetary union, as it lurches from one crisis to another. On a more positive note what this agreement does do is establish the principal of some form of joint debt issuance, and it is this which can be construed as a baby step towards wider fiscal integration.

As a result today’s European session is expected to see a higher open, with the DAX set to open at its highest level in almost 5 months. .

Later this morning we’ll get another look under the hood of the UK economy and the amount of extra borrowing that the UK government undertook in June to keep the economic motor of the UK ticking over in response to the current coronavirus crisis.

The previous two months saw the UK government has borrow over £100bn, an exceptional post war intervention to support an economic shock that will reverberate for years to come. In April we saw £47.8bn, added to the national debt, followed by another £54.5bn in May as the UK treasury paid the wages of over 8m private sector employees.

Since then we’ve since discovered that the UK government shelled out over £15bn in respect of PPE to deal with the crisis, more money than it spends on the Home Office, Treasury and Foreign Office combined, while the number of jobs getting government support has risen to over 10m. Expectations are for another £40bn to be added to the national debt.

At some point the UK government will have to look at how they intend to pay for all of this, but for now with 2- and 5-year yields in negative territory, and 10 year yields below 0.2%, it isn’t something they need to be too concerned about right now.

We’re expecting to see another big number today for the June numbers, as the costs of the furlough scheme continue to rack up, and UK borrowing moves above 100% of GDP for the first time since World War Two.

The US dollar slipped to a one-month low yesterday as optimism over a deal in Brussels pushed the euro close to its best levels this year. The pound also enjoyed some decent gains ahead of the release of more economic data this week which is likely to lay bare the fairly lacklustre nature of the economic rebound as lockdown restrictions continue to be eased.

Bank of England chief economist Andrew Haldane maintained his recent view that the UK economic rebound was likely to be v-shaped in nature despite the announcement of further job cuts, this time from high street retailer Marks and Spencer yesterday. His view does appear to be a minority one on the MPC, with the declines in the pound seen last week driven by market expectations of a further cut in interest rates by the Bank of England at its September meeting.

EURUSD – broke above 1.1370 last week and has continued to edge higher with the highs this year at 1.1495 the next key resistance, after breaking above the 200-week MA, for the first time since June last year. A break above the 1.1500 level opens up a potential move towards 1.1570 and the 2019 highs. Support comes in at the 1.1370 level.

GBPUSD – another solid day yesterday, the pound has support at the 1.2500 area, with resistance currently at the 1.2680 area as well as the 200-day MA at 1. 2720. The larger resistance remains at the 1.2770 area as well as the June highs at 1.2815.

EURGBP – the June peaks at 0.9175/80 remain a key resistance zone, and the failure thus far to move beyond them does keep the bias slightly negative for a return to the 50-day MA at 0.8980, as well as the July lows at 0.8920.

USDJPY – currently has fairly solid support down near the 106.50 area, and resistance up near 107.50, as well as cloud resistance at the 108.00 level.

FTSE100 is expected to open 37 points higher at 6,298

DAX is expected to open 103 points higher at 13,150

CAC40 is expected to open 32 points higher at 5,125

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

By Michael Hewson (Chief Market Analyst at CMC Markets UK)

EU Rescue Fund Remains in Focus, Markets Calm

Not much was achieved at the European meeting on Friday, and that wasn’t exactly a surprise. The €750 billion rescue package was at the centre of the talks, and the original proposal was that €500 billion would be allocated as grants, and that €250 billion be distributed as loans.

The Netherlands, Austria, Sweden and Denmark, expressed opposition to €500 billion being allocated as grants without conditions. There were concerns that funds wouldn’t be used to tackle the health crisis. The countries in question, have been dubbed the ‘frugal four’, and they also called into question the size of the proposed grants, as they would prefer to see a higher percentage of loans.

Talks continued over the weekend. In a bid to win over the ‘frugal four’ it was suggested that €400 billion be dished out as grants rather than €500 billion. It was reported The Netherlands and Austria are pushing for €390 billion in grants, and €360 billion in loans, but nothing has been agreed upon yet. Discussions will continue this afternoon.

It was put forward that a ‘super emergency break’ be included in the package, meaning that any one government could question the use of the funds that are being deployed. Such a move would help ensure that the cash was been used for its appropriate purpose. The sooner the bloc can agree on the terms of the rescue the better for everyone, especially countries like Spain and Italy, which were hard hit by the health crisis, and are rely heavily on tourism.

Stocks in Asia are mixed as the CSI 300 is showing solid gains, the Nikkei 225 is flat, while the Hang Seng has turned positive.

The US posted mixed data on Friday. Building permits for June were 1.24 million, and that was a small increase from the 1.22 million in the previous update. The housing starts reading was 1.18 million, which was a decent jump on the 1.01 million registered in May. The preliminary reading of the University of Michigan consumer sentiment was 73.2 in July, its lowest in three months. The heath situation deteriorated in recent weeks, and a number of states have paused the reopening of their economies. That is probably why consumer sentiment slipped.

The US dollar had a negative run last week and on Wednesday it fell to its lowest level in nearly one month. In the last few months the currency has been a popular flight to quality play, and conversely, when dealers have been in risk-on mode, it has typically suffered. Risk appetite has been a bigger factor in the dollar’s moves lately, than economic indicators.

Inflation in the eurozone ticked up in June to 0.3% from 0.1%, but the core reading cooled to 0.1% from 0.3%. The core reading is often deemed to be a better gauge of underlying demand as it removes commodity prices from the measurement. Last week, Christine Lagarde, the head of the ECB, said that inflation is expected to remain low.

In the first week in July, gold hit is highest level since September 2011, but last week it traded sideways. The commodity has a track record of being a safe haven trade, but since the greenback has also become a popular risk-off trade, that has reduced gold’s volatility, due to their inverse relation relationship.

Oil lost a little ground last week as it was announced that OPEC+ will increase their output as of next month. In May, the group cut output by 9.7 million barrels per day (bpd) as a way of propping up the energy market. The ‘historic’ cut helped oil hit a three month high in June. Last week, it was announced the body would ease up on the production cuts to a reduction of 7.7 million bpd as of next month.

The original agreement stipulated that production would be increase in August, and last week that was confirmed. It is worth nothing that oil hasn’t fallen that much from the three month high that was registered in June. By Friday’s close, WTI and Brent crude are only down 2.4% and 1.9% respectively from the June highs.

At 7am (UK time) German PPI will be posted and economists are expecting it to rise from -2.2% in May to -1.6% in June.

EUR/USD – since late June it has been in an uptrend, and if the positive move continues, 1.1495 should be on the radar. If it moves through that level, it could target 1.1570. A break below the 1.1168 area might pave the way for 1.1060, the 200-day moving average, to be targeted.

GBP/USD – has been trading sideways in the past few sessions. A move higher might run into resistance at 1.2698, the 200-day moving average. A move through that level should put 1.2813 on the radar. Should it move lower, it might find support at 1.2418, the 100 day moving average.

EUR/GBP – should the bullish move from late April continue, it could target 0.9239. A break below the 50-day moving average at 0.8983, could put the 0.8800 zone on the radar.

USD/JPY – has been drifting lower for over one month and support could come into play at 106.00. A rebound might run into resistance at 108.37, the 200-day moving average.

FTSE 100 is expected to open 8 points lower at 6,282

DAX 30 is expected to open 5 points higher at 12,924

CAC 40 is expected to open 6 points lower at 5,063

For a look at all of today’s economic events, check out our economic calendar
By David Madden (Market Analyst at CMC Markets UK)

Mood Lifted on Vaccine Hopes, US-China Tensions Tick Up

There is a growing concern that certain parts of the world are going backwards in terms of reopening their economies. Hong Kong has reintroduced some restrictions, and the Australian state of Victoria has paused the reopening of its economy. In the US, Florida reclosed bars and restaurants. Philadelphia will ban large public events until February. European equity markets ended the day in the red. Some traders are concerned we have seen the high water mark as far as reopening the global economy is concerned.

In addition to the health concerns, markets also have to contend with rising tensions in regards to China. US Secretary of State, Mike Pompeo, said that China’s territorial claims in the South China Sea are ‘completely unlawful’. The Chinese government claimed the US are intentionally distorting the facts. Yesterday, the UK announced that it will ban Huawei from its 5G network.

The move won’t be immediate, but it will be required to be out of the equation by 2027. China’s international relations have been under strain recently since the introduction of the controversial national security law. It is not a huge surprise that the US and the UK are trying to apply some pressure to the Beijing administration in light of what is going on in relation to Hong Kong.

It is interesting that the Trump administration don’t want to take on China in terms of a trade spat. President Trump is content to keep phase one of the trade deal intact and pick smaller battles. The Donald is facing re-election in November so he probably won’t do anything too drastic between now and then.

Tensions between the US and China have risen again as President Trump signed legislation that will target individuals and companies that are helping the Chinese government tighten its grip on Hong Kong. Chinese government officials could be in the firing line. The US government will end its special status for Hong Kong, so that should apply pressure to the region in terms of tariffs. Stocks in China and Hong Kong are lower.

Moderna, a pharmaceutical company, announced that its potential Covid-19 vaccine delivered a robust immune response in an early stage human trial, and that has helped wider market sentiment. European indices are called higher.

Reporting season in the US kicked off yesterday as JPMorgan, Citigroup and Wells Fargo posted their latest figures. Collectively, the three banks set aside more than $27 billion for bad debt provisions. During the reporting season in April, the major banks set aside $25 billion for credit losses, and as far as this reporting season is concerned, we still have yet to hear from Goldman Sachs, Bank of America and Morgan Stanley. US stocks moved lower initially but the S&P 500 closed at the high of the day – it finished up 1.3%.

The latest UK GDP data showed the economy improved in May, but the rebound wasn’t as impressive as economists were expecting. On a monthly basis, the economy grew by 1.8%, and that was a big difference from the -20.5% registered in April, but the consensus estimate was for growth of 5.5%. The annual reading was even less impressive. The reading for May was -24%, and that was a tiny improvement on April’s -24.5%, and the forecast was -20.4%. The OBR issued a bleak outlook, as the body predicts the budget deficit will be 13-21% of GDP, and the yearly GDP forecast is -12.4%.

The UK CPI rate for June is tipped to fall to 0.4% from 0.5%, and the core reading is anticipated to hold steady at 1.2%. The reports will be posted at 7am (UK time).

The Italian CPI reading will be revealed at 9am (UK time) and economists are expecting it to fall from -0.3% to -0.4% in June.

The New York Fed manufacturing reading is tipped to be 10, and that would be a big improvement from the -0.2 that was posted in June. It is worth nothing the previous reading was the highest in four months. The update will be announced at 1.30pm (UK time).

At 2.15pm (UK time) the US industrial production report for June will be announced. The consensus estimate is 4.4%.

The Bank of Canada is expected to keep rates on hold at 0.25%, and the decision will be released at 3pm (UK time). The press conference will be held one hour later.

The EIA report will be posted at 3.30pm (UK time) and oil stockpiles are tipped to fall by 2.5 million barrels, while gasoline inventories are expected to rise by 1.3 million barrels.

The Beige Book will be announced at 7pm (UK time) and the update should provide us with a flavour of how the US economy is performing.

EUR/USD – since late June it has been in an uptrend, and a break above the 1.1400 zone might put 1.1495 on the radar. A break below the 1.1168 area might pave the way for 1.1051, the 200-day moving average, to be targeted.

GBP/USD – moved lower in the past two sessions and further declines could see it target 1.2427, the 100 day moving average. A move higher might run into resistance at 1.2693, the 200-day moving average. A move through that level should put 1.2813 on the radar.

EUR/GBP – Monday’s candle has the potential to be a bullish reversal, and if it moves higher it could target 0.9239. A break below the 50-day moving average at 0.8957, could put the 0.8800 zone on the radar.

USD/JPY – has been drifting lower for the last month and support could come into play at 106.00. A rebound might run into resistance at 108.37, the 200-day moving average.

FTSE 100 is expected to open 53 points higher at 6,232

DAX 30 is expected to open 150 points higher at 12,847

CAC 40 is expected to open 58 points higher at 5,065

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

By David Madden (Market Analyst at CMC Markets UK)

Europe Set for Negative Start, US-China Tensions Rise, US Tech Giants Fell

Pfizer and BioNTech are working on four drugs that they are hoping will go on to be coronavirus vaccines, and the FDA put two of the four on a fast track for approval. At the back end of last week, BioNTech said they could receive approval as early as Christmas, but in light of yesterday’s news, it might even be sooner.

European equities closed higher and US stocks got off to a good start on the back of the news. The FDA update carried on nicely from Friday’s news that Remdesivir, the antiviral drug produced by Gilead Sciences, can reduce the fatality rate in coronavirus sufferers by 62%. In the past couple of trading sessions there was a feeling that big pharma stands a chance of taking on the virus.

That being said, many countries are still battling against Covid-19. There were in excess of 60,000 new cases yesterday in the US, while there were 312 deaths. The infection rate remains high, but at least the fatality rate is relatively low. The situation in Florida is getting worse as the growth in the number of new cases was 4.7%, while the seven day average was 4.4%.

Robert Kaplan, the head of the Federal Reserve Bank of Dallas, issued a mixed statement yesterday. The central banker expressed concerns in relation to the infection rate, and he said the Fed might be required to do more should assistance be needed. Mr Kaplan also said the Fed might row back on its stimulus packages should the economy improve.

The NASDAQ 100 set a fresh record high yesterday, a few hours into the trading session. The bullish run didn’t last long as the tech focused index finished down more than 2%, and the S&P 500 closed down nearly 1%. The usual suspects – Apple, Amazon, Netflix, Facebook and Google’s parent, Alphabet – all set all-time highs, but finished lower.

US earnings season will kick-off today as the latest quarterly numbers from JPMorgan, Wells Fargo and Citigroup will be posted. In April, the major banks collectively put aside more than $25 billion for provision for bad debts, the view is that the rate of loan defaults will surge on account of the pandemic.

Last month, the Fed carried out a stress test, and in one extreme scenario, the central bank cautioned that total bad debts provisions could be $700 billion. Dividends will be in focus as the Fed said that pay-outs must be capped at current rates, and there has been speculation that dividends could be cut in an effort to conserve cash.

It was a mixed day for commodities yesterday. The slide in the US dollar helped gold. Silver, copper and palladium were also helped by the move in the greenback, and the overall feel-good factor helped the industrial metals too. Oil on the other hand lost ground as there was talk that OPEC+ are looking to taper off the steep production cuts that were introduced in May. Last month WTI and Brent crude hit three month highs, but they failed to retest those levels since, because of the pausing of the reopening of economies.

Overnight, China posted its trade data for June. Imports were 2.7%, and economists were expecting -10%, keep in mind the May reading was -16.7%. Exports came in at 0.5%, and the consensus estimate was -1.5%, while the May reading was -3.3%. The rebound in imports and exports points to a turnaround in the global economy. It is possible the positive exports reading was largely because of Western government’s demand for personal protective equipment.

Rising tensions between the US and China in relation to Beijing’s territorial claims in the South China Sea has weighed on sentiment. Hong Kong is reintroducing tougher restrictions and a rise in coronavirus cases in Victoria, Australia, has impacted the mood too. Stocks in Asia are in the red, and European markets are called lower.

At 7am (UK time) the UK will release a number of economic reports. The GDP reading for May on an annual basis is tipped to be -20.4% and that would be an improvement on the -24.5% posted in April. The monthly reading is expected to be 5.5%, and keep in mind the April reading was -20.4%. UK industrial output, manufacturing output and construction output are expected to be 6%, 8% and 14.5% respectively.

At the same time, the final reading of German CPI for June will be posted and the consensus estimate is 0.8%.

The German ZEW economic sentiment report for July is tipped to be 60, and that would be a dip from the 63.4 recorded in June. It will be released at 10am (UK time).

Eurozone industrial production will be announced at 10am (UK time) and the May reading on a monthly basis is tipped to be 15%, and that would be a huge rebound from the -17.1% posted in April.

US headline CPI is expected to rebound to 0.6% from 0.1% in May. The core reading is tipped to be 1.1% and that would be a fall from the 1.2% that was posted in May.

EUR/USD – since late June it has been in an uptrend, and a break above the 1.1400 zone might put 1.1495 on the radar. A break below the 1.1168 area might pave the way for 1.1049, the 200-day moving average, to be targeted.

GBP/USD – has been in an uptrend recently, and should the positive move continue, it might target 1.2690, the 200-day moving average. A move through that level should put 1.2813 on the radar. Thursday’s candle has the potential to be a gravestone doji, and a move lower could see it target 1.2432, the 100 day moving average. A drop below 1.2251, might bring 1.2076 into play.

EUR/GBP – yesterday’s daily candle has the potential to be a bullish reversal, and if it moves higher it could see it target 0.9067 or 0.9239. A break below the 50-day moving average at 0.8949, could put the 0.8800 zone on the radar.

USD/JPY – has been drifting lower for the last month and support could come into play at 106.00. A rebound might run into resistance at 108.37, the 200-day moving average.

FTSE 100 is expected to open 78 points lower at 6,098

DAX 30 is expected to open 239 points lower at 12,560

CAC 40 is expected to open 91 points lower at 4,965

By David Madden (Market Analyst at CMC Markets UK) 

Traders in Risk-on Mode as Stocks and Metals Rise

The drug in question has been tipped as a potential treatment for the coronavirus for several months, and the findings from the latest study boosted market sentiment. BioNTech and Pfizer are working on a potential vaccine for Covid-19, and at the back end of last week, BioNTech announced that it is possible that its drug might receive approval from the FDA by December.

The pandemic will continue to dominate the headlines. On Sunday, the WHO said that another record was set for the number of daily cases. For the fourth day in a row, the US registered over 60,000 new cases. Countries like India and Mexico are seeing a rise in the number of new cases too.

Overnight, stock markets in Asia pushed higher despite the deteriorating health situation. This week US earnings season will kick-off and tomorrow big banks such as JPMorgan, Wells Fargo and Citigroup will reveal their numbers.

The latest jobs data from Canada showed that the economy is turning around. The unemployment rate fell from 13.7% in May to 12.3% in June, which was encouraging to see, but it is worth noting that economists were expecting a reading of 12%. The employment change reading showed that 952,900 jobs were added last month, and that comfortably topped the 700,000 consensus estimate. The May update showed that nearly 290,000 jobs were created, so last month’s report was a big improvement.

The finer details of the update showed that 488,100 full-time jobs were added, while 464,800 part-time jobs were created. Average wages fell to 6.8% from 9.96%, and that was likely down to the return of lower-income earners back to the jobs market. Typically, a decrease in earnings would be seen as negative as workers who earn less typically spend less, but in these circumstances, it could be seen as positive as it is a sign that more people are going back to work.

Demand at the factory level in the US continues to be weak as the headline PPI remained at -0.8% in June, while economists were expecting it to rebound to -0.2%. The core reading, which strips out commodity prices, fell to 0.1% from 0.3%. The core report is considered to be a better reflection of underlying demand. PPI is often a front-runner for CPI, because if demand at the factory level is falling, it will probably fall at the consumer level too. The headline CPI rate is currently 0.1%, and in the months ahead it is likely to remain under pressure.

The US dollar index fell on Friday as traders turned their backs on the currency as they were in risk-on mode. In the past few months, the greenback has acted as a flight-to-quality play, and it typically slides when dealers are keen to take on more risk.

Metals performed well last week. Gold hit a level last seen in September 2011, silver hit a 10-month high, and copper reached a level last seen in April 2019. The weaker greenback was a factor in the positive run in the metals market. Copper is often seen as a good proxy for demand, so its rally suggests the traders are banking on a continuation in the rebound of the global economy.

Oil gained ground on Friday as the overall sense of optimism boosted the energy market. The Baker Hughes report showed the number of active oil rigs in the US fell by four to 181, its lowest since 2009. The rig count is falling but it is falling at a slower pace. The number of active gasoline rigs in the US fell by one to 75, matching its lowest level on record. One report over the weekend claimed that Saudi Arabia are keen to raise production and retreat from the record production cuts that were announced in April.

Andrew Bailey, the governor of the Bank of England, will take part in a webinar at 4.30pm (UK time).


Since early May it has been in an uptrend, but it has been trading sideways recently. If it holds above the 1.1168 zone, it could target 1.1495. A break below the 1.1168 area might pave the way for 1.1049, the 200-day moving average, to be targeted.


Since late June it has been in an uptrend, and should the positive move continue, it might target 1.2690, the 200-day moving average. A move through that level should put 1.2813 on the radar. Thursday’s candle has the potential to be a gravestone doji, and a move lower could see it target 1.2436, the 100 day moving average. A drop below 1.2251, might bring 1.2076 into play.


Last Tuesday’s daily candle was a bearish reversal, and if it moves lower it might find support at 0.8881, the 100-day moving average. A retaking of 0.9067 could see it target 0.9239.


The USD/JPY been drifting lower for the last month and support could come into play at 106.00. A rebound might run into resistance at 108.37, the 200-day moving average.

FTSE 100 is expected to open 55 points higher at 6,150

DAX 30 is expected to open 151 points higher at 12,784

CAC 40 is expected to open 55 points higher at 5,025

By David Madden (Market Analyst at CMC Markets UK)   

Europe Set to Rebound, US Jobs Data on Radar

Traders in this part of the world continue to monitor the situation in the US, where the majority of states continue to see the number of new Covid-19 cases increase. As of yesterday, the number of confirmed cases in the US exceeded 3 million. On Tuesday, the WHO cautioned there could be an increase in the fatality rate as there has been a rise in infections, but the death rate so far has lagged.

US-China tensions were doing the rounds yesterday. The decision by the Chinese government to introduce the national security law in regards to Hong Kong has sparked criticism from many countries around the world as it chips away at the principal of ‘one country two systems’.

Yesterday there was speculation the US government would hit back at Beijing by potentially undermining the Hong Kong Dollar (HKD) peg. It wasn’t that long ago that President Trump reiterated that the US-China trade deal was intact, so going after the HKD might be a useful tactic. The US leader might be hesitant about taking a very tough stance against the Beijing administration given that he’s not doing well in the polls and the Presidential election is in November.

The mini-budget from Rishi Sunak, the UK’s Chancellor of the Exchequer, made big political headlines yesterday, but it didn’t have a significant impact on the markets. Mr Sunak revealed £30 billion worth of schemes that are aimed at providing assistance to the UK economy. The furlough scheme will come to an end in October and £9 billion will be allocated to job retention. There will be a temporary cut to VAT for the tourism and hospitality sector.

In addition to that, there have been incentives offered for dining out too – the combined stimulus is worth £4.5 billion. Providing help to the battered hospitality sector is a sensible move, but people in the UK might be cautious about socialising given what has happened in places like Melbourne and the US in relation to a rise in new cases. As expected, the stamp duty threshold was upped to £500,000 from £125,000. One could argue that this tactic might not be as fruitful as the government are hoping as some people are likely to be cautious about purchasing a property on account of the huge economic uncertainty.

The health crisis in the US remained in focus. Oklahoma, California and Tennessee all posted a record daily rise in the number of new cases. States like Florida and Arizona continue to see higher case numbers too. Despite the pandemic, US equity benchmarks closed higher as the tech sector continued its bullish run. Amazon, Apple and Netflix all set new record highs. Raphael Bostic, the head of the Federal Reserve of Atlanta, said that some of the fiscal support programmes might need to be extended.

Overnight, China posted its CPI data for June and the level was 2.5%, while economists were expecting 2.5%. Keep in mind the May reading was 2.4%. The PPI metric was -3%, and the consensus estimate was -3.2%, while the previous update was -3.7%. The improvement in the PPI rate might bring about higher CPI in the months ahead. Stocks in Asia are up on the session, and European markets are being called higher too.

The US dollar came under pressure yesterday. It was a quiet day in terms of economic data so the move wasn’t influenced by economic indicators. Lately the greenback has been a popular safe haven for traders, it was showing losses during the day when European indices were in the red, and when US stocks were flickering between positive and negative territory.

Gold was given a hand by the slide in the US dollar. The metal topped $1,800, and it was the first time since September 2011 that it traded above that mark. The commodity is still popular with certain traders as there are concerns that a second wave of Covid-19 could be on the cards. The metal’s positive move is being partly fuelled by the belief that central banks will maintain very loose monetary policy. Some people are afraid an inflation rise is in the pipeline, so that is influencing gold too.

At 7am (UK time) Germany will post its trade data for May, and the imports and exports are tipped to be 12% and 13.8% respectively.

The US initial jobless claims is anticipated to fall from 1.42 million to 1.37 million. The metric has fallen for the past 13 weeks in a row. The continuing claims reading is tipped to drop from 19.29 million to 18.95 million. Keep in mind that last week’s reading actually ticked up. The reports will be posted at 1.30pm (UK time).

A eurogroup video conference meeting will be held today and traders will be listening out for any potential progress being made in relation to the region’s recovery fund.

EUR/USD – since early May it has been in an uptrend, but it has been trading sideways recently. If it holds above the 1.1168 zone, it could target 1.1495. A break below the 1.1168 area might pave the way for 1.1042, the 200 day moving average, to be targeted.

GBP/USD – since late June it has been in an uptrend, and should the positive move continue, it might target 1.2687, the 200-day moving average. A move through that level should put 1.2812 on the radar. A drop below 1.2251, might bring 1.2076 into play.

EUR/GBP – Tuesday’s daily candle has the potential to be a bearish reversal, and if it moves lower it might find support at 0.8935, the 50-day moving average. A retaking of 0.9067 could see it target 0.9239.

USD/JPY – has been drifting lower for the last month and support could come into play at 106.00. A rebound might run into resistance at 108.37, the 200-day moving average.

FTSE 100 is expected to open 34 points higher at 6,190

DAX 30 is expected to open 153 points higher at 12,647

CAC 40 is expected to open 46 points higher at 5,027

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

By David Madden (Market Analyst at CMC Markets UK)

Health Woes Linger, Rishi Sunak in Focus

The bullish move that was seen at the start of the week was triggered by an editorial in the China Securities Journal. The article talked about the possibility of a bullish run in Chinese equities, and in turn there was a surge in domestic stocks, and that paved the way for the upward move in world stock markets on Monday.

One could argue the rally was essentially manufactured by the article in question, hence why the feel good factor didn’t last too long. By the close of play yesterday, the FTSE 100, DAX 30 and the CAC 40 had handed back nearly all the gains that were made on Monday. Yesterday’s move was more about a correction rather than a sharp change in outlook.

US indices got off to a less volatile start yesterday. The tech sector continued to be popular and it helped the S&P 500 turn positive in early trading. Stocks such as Apple, Facebook, Amazon and Netflix all posted record highs, and in turn the NASDAQ 100 set a new all-time high. The bullish move ran out of steam and the S&P 500 and the NASDAQ 100 closed down 1.08% and 0.75% respectively. Raphael Bostic, the head of the Atlanta Federal Reserve Bank cautioned the rebound in the US economy might be levelling off.

Equity markets in Asia are mixed as stocks in China and Hong Kong are showing modest gains, while the Nikkei 225 is in the red. The WHO said it wouldn’t be surprised if the death rate started to rise as Covid-19 cases increased in June.

Rishi Sunak, the Chancellor of the Exchequer, will be in focus today as his is tipped to unveil various schemes that are aimed at aiding the economy. Some of the programmes have already been announced. Last week, Prime Minister Johnson, revealed a £5 billion infrastructure plan.

There is talk about more funds being allocated to schools too. It is believed that £3 billion will be earmarked for a green investment package – which will include energy efficiency schemes and the creation of jobs. The house building sector could be in for a boost as there is talk the stamp duty threshold will be raised from £125,000 to £500,000. Changes might be introduced to the furlough scheme and VAT might be alerted too.

The European Commission (EC) downgraded its outlook for the EU and the eurozone. The group revised its forecasts because its felt European countries reopened their economies at a slower rate than initially predicted. The EC is now forecasting the EU and the currency area will contract by 8.3% and 8.7% respectively in 2020, while the previous forecasts were -7.4% and -7.7%.

The scale of the revision isn’t huge, but a negative revision is important from a psychological point of view. The news from the EC echoed that of the IMF, who in June predicted the global economy would shrink by 4.9% this year, while their previous prediction was -3%. The IMF are very bearish on the eurozone as they feel it will contract by 10.2% in 2020.

The CMC GBP index rallied yesterday as the UK’s and the EU’s chief negotiators had dinner at Downing Street. Britain’s David Frost entertained Michel Barnier and no doubt the conversation included topics such as trade and fishing rights. Sterling pushed higher during the day as dealers took the view that some progress should be made. The UK and the EU have both expressed a desire to strike a deal, but differences remain.

At 3.30pm (UK time) the EIA report will be posted and US oil stockpiles are tipped to fall by 3.2 million barrels, while gasoline inventories are anticipated to remain unchanged.

EUR/USD – since early May it has been in an uptrend, but it has been trading sideways recently. If it holds above the 1.1168 zone, it could target 1.1495. A break below the 1.1168 area might pave the way for 1.1042, the 200 day moving average, to be targeted.

GBP/USD – since late June it has been in an uptrend, and should the positive move continue, it might target 1.2686, the 200-day moving average. A move through that level should put 1.2812 on the radar. A drop below 1.2251, might bring 1.2076 into play.

EUR/GBP – yesterday’s daily candle has the potential to be a bearish reversal, and if it moves lower it might find support at 0.8930, the 50-day moving average. A retaking of 0.9067 could see it target 0.9239.

USD/JPY – has been drifting lower for the last month and support could come into play at 106.00. A rebound might run into resistance at 108.38, the 200-day moving average.

FTSE 100 is expected to open 34 points lower at 6,155

DAX 30 is expected to open 46 points lower at 12,570

CAC 40 is expected to open 25 points lower at 5,018

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

By David Madden (Market Analyst at CMC Markets UK)

Rally in Asia Bodes Well for Europe

The 4 July holiday in the US fell on a Saturday this year, so it was a public holiday on Friday and the US market was closed.

Volatility was low in the first hours of the European trading session, and trading volumes were down sharply when compared with the rest of the week. Health woes chipped away at market sentiment on this side of the Atlantic. On Friday, it was revealed that US states such as Arizona and California saw a jump in the number of new cases. It is likely that traders in Europe took the view the health situation in the US would deteriorate as Americans enjoyed their long weekend.

According to the WHO, on 4 July over 212,000 new Covid-19 cases were registered – a daily record. The US, Brazil and India were the largest contributors to the tally. The US’s reading on Saturday was over 53,000, which was a retreat from Friday’s level of more than 57,000. Some hard hit US states such as Florida are experiencing a drop-off in the rate of new cases, which is probably down to a pausing of the reopening of its economy. As of yesterday, 34 states saw an increase in new cases on the week.

Stocks in mainland China and Hong Kong are showing impressive gains. There has been a jump in trading volumes in China, and European equity benchmarks are tipped to open higher as a result.

The latest services data from China and Europe point to a continuation in the rebound in activity. The Caixin survey of Chinese services for June was 58.4, its highest in ten years. Keep in mind the February reading was 26.5, so there has been a colossal turnaround. The services PMI reports for Spain, Italy, France, Germany and the UK were 50.2, 46.4, 50.7, 47.3, and 47.1 respectively.

The Spanish and French updates showed positive growth, and all the readings were major improvements on the May levels – which were in the high 20s or low 30s. It is clear that things are improving from an economic point of view, but the health situation could be a different story. There have been local lockdowns in Leicester, Melbourne, and in parts of Spain too. There are concerns that this sort of thing could become common.

Christine Lagarde, the European Central Bank president, warned that prices in the currency bloc might remain under pressure for the next two years, before seeing a turnaround. The central banker took part in a webinar on Saturday, and predicted that digitalisation will speed up, and that companies will cut their supply chains too.

It was reported the Bank of England chief, Andrew Bailey, wrote to UK banks and said that negative interest rates are an option the group is considering. Such a move would put pressure on lending margins, which are already squeezed. Interest rates are at historic lows, but consumers are actually paying down credit card debt, so would negative rates actually spark higher demand?

Over the weekend, pubs and restaurants in England were allowed to reopen. The event was referred to as ‘Super Saturday’ and it was a continuation of life returning to normal. The UK economy has come a long way in the past few months, and with more businesses reopening the economic rebound should continue, but there are concerns the infection rate could jump. Images of packed streets in places like London’s Soho will probably add weight to the argument that the capital could be in for a rise in Covid-19 cases.

German factory orders will be posted at 7am (UK time) and the May reading is expected to be 15%, and that would be massive rebound from the -25.8% registered in April.

The UK construction PMI report for June is expected to be 47, up from 28.9 in May. It will be announced at 9.30am (UK time).

At 10am (UK time), eurozone retail sales will be released and the consensus estimate is 15%. Keep in mind the May reading was -11.7%.

The final reading of US services PMI for June is expected to be 47, and that would be a slight improvement from the flash report’s 46.6. The report will be published at 2.45pm (UK time). Shortly afterwards, the ISM non-manufacturing report will be announced, and economists are predicting 50, which would be an improvement on the 45.4 registered in May.


Since early May the EUR/USD has been in an uptrend, but it has been trading sideways recently. If it holds above the 1.1168 zone, it could target 1.1495. A break below the 1.1168 area might pave the way for 1.1038, the 200 day moving average, to be targeted.


For more than three weeks the GBP/USD has been in a downtrend and if the bearish move continues, it might hit 1.2163. A move higher from here might see it target 1.2683, the 200-day moving average.


Has been in an uptrend for over two months and if it holds above 0.9000, it might target 0.9239. A move lower might find support at 0.8924, the 50-day moving average.


Has been drifting lower for the last month and support could come into play at 106.00. A rebound might run into resistance at 108.38, the 200-day moving average.

FTSE 100 is expected to open 73 points higher at 6,230

DAX 30 is expected to open 244 points higher at 12,772

CAC 40 is expected to open 90 points higher at 5,097

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

By David Madden (Market Analyst at CMC Markets UK)

Europe set for a positive start, as Q2 draws to a close   

The rebound that we’ve seen in Q2 is still quite remarkable when looked through the prism of where we were at the end of March, when all of the government lockdowns were only just beginning. The FTSE100 while also looking to finish higher for the third month in a row, has been the serial underperformer of the bunch, lagging well behind, when compared to the steep falls seen in Q1.

US markets have also seen a similarly remarkable rebound, particularly when you look at the economic landscape now, and where we were heading into the crisis, although the S&P500 hasn’t really moved much from where we finished at the end of May.

Last night’s rebound in US markets, came about despite a warning from the WHO that the epidemic was running out of control and a continued rise in infection rates across a number of US states. There was also some concerns about second waves in China and South Korea, however these infection spikes came from a fairly low base.

The recovery in sentiment was also helped by a 44.3% rise in pending home sales in May, however the wider story would appear to be that investors may be making the calculation that politicians won’t stop the ongoing moves to reopen economies around the world, despite rising infection rates, banking on perhaps, that it is the least worst option.

It is this calculation that appears to be driving risk appetite, along with the fact that while the infection rate is rising the fatality rate is not, and it is that, more than anything, is probably the most important statistic. The reality is that Covid-19 is here for the foreseeable future and while an increase in infections is not particularly desirable, as long as it doesn’t translate into a higher fatality rate then the worst that can happen is likely to be localised lockdowns.

This appears to be playing out here in the UK with the city of Leicester set to be excluded from the grand re-opening on the 4th July, with non-essential shops to close from today, over concerns about a big rise in infection rates there. Chancellor Rishi Sunak will then follow that up with a budget statement next week.

Prime Minister Boris Johnson will also be making a speech later today,

Where he will outline a £5bn accelerated infrastructure spending plan, with a more detailed “new deal” plan to be published in the autumn.

As we look towards today’s European open, we look set to take our cues from last night’s positive US finish, even if the sentiment took a brief knock after the US Commerce Secretary Wilbur Ross announced that Hong Kong’s special trading status was set to be revoked, thus putting the territory on the same setting as China, in terms of being subject to all of the same tariffs and trade restrictions. This action was a pre-emptive response to this morning’s passing of the new China security law, which the US says poses risks to US sensitive technology.

This appears to have been widely expected with Asia markets finishing the month higher on the back of this morning’s latest China manufacturing and non-manufacturing PMI’s for June which showed another fairly decent month of economic activity, following on from decent readings in May.

The manufacturing number came in at 50.9, while non-manufacturing showed an expansion of 54.4, both above the readings from May.

We’ll also be getting the final Q1 GDP numbers for the UK economy, which aren’t expected to change much from the previous readings, and could even be adjusted slightly lower.

These numbers are unlikely to tell us anything new about the UK economy’s performance at the beginning of the year. The economy was slowing even before the March lockdown, largely due to widespread flooding in February, which not only hit consumer spending, but also the wider economy in general.

On a quarterly basis, the economy is expected to contract by -2%, and on an annual basis by -1.6%. The lockdowns that started across Europe in March are expected to result in big declines in both imports and exports, which are expected to see even bigger falls than the previous readings, with falls of -12.2% and -9.4% respectively.

Concerns about deflation in the euro area are likely to take centre stage later this morning with the latest flash estimate of CPI for June. This is expected to come in at 0.2%, with core prices set to slow further to 0.8%, down from 0.9% in May.


Found support at the 1.1160/70 area last week, before rebounding back towards the 1.1350 area. Rebound continue to look shallow with a break below 1.1160 potentially opening up a return to the 1.1020 area and the 50, and 200-day MA’s.  Above the 1.1350 area retargets the highs from June at 1.1425.


Continues to drift lower with the next support at 1.2215, with a break below here targeting a move back to the May lows at 1.2075.  We need to see recovery back above the 1.2450 level to stabilise and open up the 1.2540 level and last week’s high.


While above the 0.9000 area the bias remains for a move back to the 0.9240 area, if we hold above 0.9020. Trend line support from the lows this year comes in at the 0.8950 area.


Currently below the 108.00 area, however a break higher has the potential to see a move towards the 108.70 area. While below 108.00 the risk is for a move back towards the 107.20 area.


Is expected to open 20 points higher at 6,245


Is expected to open 68 points higher at 12,300


Is expected to open 25 points higher at 4,970

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

By Michael Hewson (Chief Market Analyst at CMC Markets UK)