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Daily Market Patrol

Market Patrol 31 July 2020

The best morale exists when you never hear the word mentioned. When you hear a lot of talk about it, it's usually lousy.

Dwight D.Eisenhower
Indicative Selling Rates
against MUR
USD
11 Aug 2020
  • AUD
  • 29.02
  • 0.7219
  • BWP
  • 3.44
  • 0.0856
  • CAD
  • 30.32
  • 1.3260
  • CNY
  • 5.81
  • 6.9138
  • DKK
  • 6.39
  • 6.2867
  • EUR
  • 47.34
  • 1.1776
  • HKD
  • 5.22
  • 7.7055
  • INR
  • 0.54
  • 74.2917
  • JPY
  • 38.11
  • 105.4934
  • KES
  • 37.52
  • 107.1365
  • NZD
  • 26.80
  • 0.6667
  • NOK
  • 4.51
  • 8.9152
  • SGD
  • 29.46
  • 1.3645
  • ZAR
  • 2.31
  • 17.3964
  • SEK
  • 4.64
  • 8.6655
  • CHF
  • 44.13
  • 1.0978
  • GBP
  • 52.72
  • 1.3114
  • USD
  • 40.20
  • 1.0000
  • AED
  • 11.02
  • 3.6493
U.S dollar bogged down historically across the board by U.S. GDP data yesterday.
Fundamental News

EUR/USD
The common currency hit a two-year high of $1.1905, benefiting from U.S dollar weakness after U.S. GDP data reflected contraction of an annualized 32.9% in the second quarter, the quickest pace since the Great Depression.

 

GBP/USD
The cable surged to $1.3143 despite China’s ambassador to the UK, Liu Xiaoming, said that the actions of the UK, including questions over alleged rights abuses in China's Xinjiang region, had "poisoned" the relationship between the two nations.

 

USD/JPY
The safe-haven yen vaulted to a 4.5-month low at 104.20 against the greenback on a tweet from U.S. President Donald Trump suggesting the November presidential election should be delayed, a radical idea that was immediately rejected by both Democrats and Republicans.

 

AUD/USD
The Aussie topped a 17-month peak at $0.7225 after China's factory activity expanded in July for the fifth month in a row, beating analysts' expectations.

 

USD/ZAR
The rand nosedived to 16.94 and last traded at 16.78 against the U.S dollar, undermined by risk-taking from investors chasing high yields and a surge in global coronavirus infections spooked investors fearing a return of strict lock-downs.

 

USD/MUR
The pair surged by 15 cents to 40.25(selling) on the local market.

Fundamental & Technical Data
Economic Indicators-Local Time

13:00 - EUR - CPI (YoY)(JUL)

16:30 - CAD - GDP (MoM)(May)

Central Bank Interest Rates
Last Change
New Meeting
Federal Bank of U.S
0.00-0.25%
16-Mar-2020
29-Jul-2020
European Central Bank
0.00%
10-Mar-2016
10-Sep-2020
Bank of England
0.10%
19-May-2020
06-Aug-2020
Bank of Japan
-0.10%
28-Jan-2016
17-Sep-2020
Reserve Bank of Australia
0.25%
18-Mar-2020
04-Aug-2020
S.Africa Reserve Bank
3.50%
23-Jul-2020
17-Sep-2020
Reserve Bank of India
4.00%
22-May-2020
06-Aug-2020
Bank of Mauritius
1.85%
16-Apr-2020
-
Looking for Markets correlation?
Market Correlation is a measure, statistical or observational, that gives a positive or negative link between the pricing of multiple currencies.

Bulls & Bears Levels
Resistance and Support
Levels
EUR/USD
GBP/USD
USD/JPY
USD/ZAR
R3
1.1920
1.3309
105.74
16.79
R2
1.2003
1.3206
105.53
16.58
R1
1.1926
1.3151
105.12
16.46
PP
1.1887
1.3048
104.90
16.40
S1
1.1809
1.2992
104.51
16.32
S2
1.1770
1.2889
104.29
16.17
S3
1.1693
1.2834
103.9
16.00
Technical Analysis - Forex Charts
Japanese Yen may flirt to 105.30/19/dlr, further underscoring what may appear to be a buoyant month.
Chart updated on 24.07.2020

After rallying from bottoming all time low at 101.20 to 111.71 in covid-fueled March period, dwarfing an expanding leading diagonal ((1)) in 5 waves, USD/JPY has ever since unfolded in a corrective double three combination pattern (W)-(X)-(Y) of wave ((2)).

 

From an Elliott Wave trading standpoint, the pair may experience further decline to the choppy downside to complete countertrend wave (Y) because- An impulse usually retraces to at least wave (4) of previous smaller trend, that is 105.19.
- Wave (4) of wave ((1)) coincides with 61.8% Fibonnacii retracement of wave ((1)), i.e 105.19.
- 78.6% projection wave (W) through (X) targets level 105.30.
- In EW lexicon, a pullback to the previous wave (2) usually happen to a leading diagonal ((1)).
- Post-triangle thrust measurement of wave B of (Y) leads exactly to 105.20.
- USD/JPY is still trading within the bearish parellel trendlines.

 

Thus, hibernation of price action could be seen in the locality of 105.30/19.On the flipside, a violent recoil to revive bullish momentum at 109.84 of June 4th would nullify this set-up, warning that the potency of positioning-derived bearish signal may be ebbing.

 

USD/CAD - Early stage of a bullish run.
Chart posted on 24.07.2020

On the hourly Chart, The USD/CAD has found strong support again near $1.3350 region yesterday. The pair fell to as low as $1.3345 before bouncing off relentlessly to as high as $1.3444 this morning.

 

We feel that the USD/CAD could be in an early stage of a bullish run towards $1.4017 in the coming months.

 

On the downside, $1.3315 remains a strong baseline , while  a break below that level would open the door for further weakness on the USD/CAD near $1.3200.

Weekly Market Update on Radio One by Karishma Sewock Nobutsing
Speak to our team
  • Allan Juste
    Head - Forex And Derivatives
    +230 5251 4855
  • Reshma Peerun Rajwani
    Head – Treasury Sales
    +230 403 5500
  • Karishma Sewock Nobutsing
    Senior Dealer - Treasury Sales
    (+230) 5943 9837
Disclaimer
Please note that the information published is purely indicative. It is based on technical data from sources which the Bank verily believes to be authentic, though its timeliness or accuracy cannot be warranted or guaranteed. AfrAsia Bank Ltd issues no invitation to anyone to rely on this bulletin and neither we nor our information providers shall be in no way whatsoever, liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness, or for any delay or interruption in the transmission thereof to the user. The indicative rates and other market information are subject to changes at the Bank's discretion. Whilst every effort is made to ensure the information is accurate, you should confirm the latest situation with the Bank prior to making any decisions.