The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
Daily News: Monday is calm
- On Friday, the US dollar index couldn’t break the psychological level at $95, so it fell. Up to now, it’s trading above $94.50. However, as the index couldn’t break above $95, there is a possibility of the further fall. No important economic data are anticipated today. However, two FOMC members will give speeches today (20:00 MT time and 23:00 MT time). Comments on the monetary policy are anticipated. If they are hawkish, the index will rise, otherwise, the fall to $94 may be anticipated.
- The euro is trying to recover after the significant fall on last Thursday. EUR/USD is trading near 1.16. No important economic data will be released today. However, ECB president Mr. Draghi will give a speech at the ECB Forum on Central Banking (20:30 MT time). If he gives any clues on the monetary policy, the euro will react. More hawkish clues, the euro will be able to move to the resistance at 1.1670. Otherwise, the pair may move to the support at 1.1480.
- USD/JPY continues to trade within 110.20-110.85. Up to now, the pair is moving down. Analysts link the earthquake in Japan with the appreciation of the Japanese yen (Japanese insurers will sell offshore assets to fund payments on claims for damage). The support still lies at 110.20 (200-day MA).
- Oil strongly plunged on Friday. Brent closed at $73, WTI appeared to be near $64.30. On Monday, oil is trying to recover. Brent is climbing above $73, however, the trading isn’t extensive. On the weekly chart, the 100-week MA is crossing the 200-week MA bottom up. It’s a positive sign for Brent. The resistance is at $74.40. The support is at $71.70.
WTI is trying to recover as well. The oil benchmark is moving to the resistance at $65.20. If it’s able to break it, the further rise is anticipated. The support is at $63.30.
The further movement will mostly depend on crude oil inventories data (at 17:30 on June 20) and the OPEC meeting on June 22.
It’s worth reminding that Russia and Saudi Arabia announced their willingness to increase an oil production. However, other participants of the cuts agreement aren’t ready to do that. Iran's representative to the bloc said "If the Kingdom of Saudi Arabia and Russia want to increase production, this requires unanimity. If the two want to act alone, that's a breach of the cooperation agreement." It seems like there are misunderstandings between allies.
- A bad forecast for Bitcoin. The Bank of International Settlements (BIS): “Cryptocurrencies are more likely to suffer a breakdown in trust and efficiency the greater the number of people using them. The cryptocurrencies can disappear because of the fragility of the decentralized networks on which cryptocurrencies depend”. What about a technical side? Bitcoin is stuck within $6,000-$6,500. A great movement is not anticipated today. A break of the support at $6,000 will be dramatic for Bitcoin. If the cryptocurrency is able to break the resistance at $6,500, there are odds of the upward movement.
That is all for today. Follow markets news with us!
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.