In the US session, the euro hit an intraday high of 1.1262. There were no fundamentals behind this bounce. The rise on the majors may have been caused by investors rebalancing their portfolios at the end of the month, quarter, and half-year.
The major US stock indices rose by between 0.9% and 1.9%. A strong consumer confidence report in the US helped overcome fears of a spike in coronavirus infections.
Fed Chair Jerome Powell didn’t say anything new as he gave testimony to the House Financial Services Committee. All he said was that there’s currently a high level of uncertainty as far as economic growth is concerned.
Day’s news (GMT 3):
- 10:50 France: Markit manufacturing PMI (Jun).
- 10:55 Germany: Markit manufacturing PMI (Jun), unemployment rate (Jun), unemployment change (Jun).
- 11:00 Eurozone: Markit manufacturing PMI (Jun).
- 11:30 UK: Markit manufacturing PMI (Jun).
- 15:15 US: ADP employment change (Jun).
- 16:45 US: Markit manufacturing PMI (Jun).
- 17:00 US: ISM manufacturing PMI (Jun).
- 21:00 US: FOMC minutes.
In today’s Asian session, the majors are trading down, except for the yen. If the majors are down, but the yen is up, it means that investors are retreating to the safe havens. There are two things that might push them towards the dollar. The first is that European leaders have failed to reach a quick agreement over the 750bn EUR recovery fund. Secondly, the government of New South Wales has banned people living in certain coronavirus hotspots in Melbourne from entering the state.
Over the course of June, the EURUSD pair rose by 1.19%. Over the second quarter, it also rose by 1.19%, while over the first half of the year, it rose by 0.10%. At the time of writing, the euro is trading at 1.1220 (-0.11%). The pair is trading around the balance line at 1.1235. There’s a fluctuation range of 96 pips between 1.1190 and 1.1285.
Aside from the news mentioned above, the euro is being held back by the increased tensions between the US and China, given that Washington is ending Hong Kong’s special status in response to China’s new security law regarding the semi-autonomous region. On the 30th of June, the Chinese Parliament unanimously voted the Hong Kong security bill into law. The law comes into effect on the 1st of July, on the 23rd anniversary of the handing over of Hong Kong to China by the British.
The bulls fell short of 1.1270 yesterday. Today, we’re expecting the pair to rise to around 1.1295 - 1.1300. The 1.1255 mark will provide some intermediate resistance.