Brent. June 02, 2020 – Oil grows amid recovery in demand

The oil market continues to grow: Brent quotes on Tuesday reached $39.55 per barrel. Support for prices is provided by a recovery in demand amid a softening of quarantine measures, as well as a reduction in oil production by key oil-producing regions of the world under the OPEC+ deal.

OPEC+ video conference will take place on Thursday, in the framework of which the heads of countries will discuss the extension of previously reached agreements. Saudi Arabia is in favor of extending the terms of the agreement, however, some countries, including Russia, are not ready to extend the reduction in production after June.

The price of Brent is rising, despite the deterioration in relations between Beijing and Washington. The day before, China announced a temporary halt to imports of certain types of agricultural products from the United States, including soybeans. Such a move could further aggravate the contradictions between the two countries and call into question current and potential trade relations.

EUR/USD. June 03, 2020 – Euro overcomes 1.12 level for the first time since early March

An optimistic atmosphere prevails on global markets, and the euro has reached 1.1200. Demand for risky assets is growing as market participants focused on the prospects for business recovery after the coronavirus pandemic, despite ongoing riots in the United States.

In addition to the general weakening of the US dollar in the Forex market, the impact on the euro is expected by tomorrow's meeting of the ECB, according to which the regulator can increase the program for the purchase of financial assets by 500 billion euros and extend this program after 2020.

Today, you should pay attention to the ISM index of business activity in the US services sector for May and data on the labor market from ADP. Analysts predict an increase in the number of repeated applications for unemployment benefits after a sudden decrease last week. Moreover, a new record value is predicted - 26,690 thousand. These data can put further pressure on the exchange rate of the American currency.

GBP/USD. June 04, 2020 – Sterling rises from 1.25

In the morning hours, the British currency continued to recede paired with the dollar, but the «bears» failed to overcome the level of 1.25. The current quotation of the pair GBP/USD is 1.2535. The pressure on sterling was exerted by statements by the Bank of England that it was necessary to be ready for Brexit without a trade transaction in transition. The regulator intends to prepare the financial system in the country for probable risks and economic stresses.

Yesterday, the UK released data on business activity in the service sector: the indicator unexpectedly rose from 13.4 to 29.0 points. However, these data did not support the British pound.

The US dollar, on the contrary, strengthened after the release of data on the labor market from ADP: the number of people employed in the country fell by only 2.7 million people, while experts forecast that this figure would fall by 9 million people.

EUR/USD. 05.06. Euro keeps growing momentum

The euro strengthened at the end of the week, reaching 1.1390. However, in the morning hours, the pair shows a decline to the level of 1.13 as part of the correction. Yesterday, the European Central Bank announced that it intends to support the economy in all available ways, including increasing the volume of the PEPP program by 600 billion euros per month (about $ 1.35 trillion). The program was extended until June 2021.

The regulator also noted the risk of lowering core inflation in 2020 to 0.9%, which is too little for the European region. Therefore, stimulating the economy can last not only until the summer of next year.

Today, you should pay attention to statistics on the US labor market. The unemployment rate, at a record high of 14.7%, could rise to even more frightening levels – 19.5%. Last month, the number of jobs decreased by 20,500 thousand, now it can decrease by another 4,870 thousand. And this picture looks extremely pessimistic for the American currency.

EUR/USD. June 08, 2020 – US dollar gets support from labor market data

EUR/USD is falling at the beginning of a new trading week. The current quote of the instrument is 1.1275. The US dollar was supported by data on the US labor market: the unemployment rate in the country in May was 13.3% compared to 14.7% in April. These statistics turned out to be much better than the forecast suggesting an increase in the indicator to the level of 19.8%.

The number of jobs outside the agricultural sector increased during the reporting period by 2.5 million, the forecast assumed a decline of 8 million. The data for April were simultaneously revised to deteriorate to -20.687 million from -20.537 million. The average hourly wage in May fell by 1% m/m, which turned out to be worse than the forecast suggesting growth by the same amount.

Today is calm in terms of the release of important macroeconomic statistics. Of interest will only be the speech of the ECB President Christine Lagarde.

Brent. June 09, 2020 – Oil declines due to several factors

Oil quotes show a decrease from yesterday's highs above the level of $43 to $40 per barrel. The oil market is weakening, despite the extension of the OPEC+ deal until the end of July and the decision to increase production cuts by countries that have not fully fulfilled their obligations in the past months (Iraq, Nigeria, Kazakhstan). Analysts suggest that the pressure on oil prices was caused by doubts of market participants about the success of the new deal.

An additional negative impact on Brent quotes was made by statements by the Minister of Energy of Saudi Arabia that the Persian Gulf countries, which intended to reduce production by another 1.18 million barrels per day, no longer plan to extend this reduction after June.

Moreover, Mexico refused to reduce production in its country and, on the contrary, intends to resume production after five months of downtime due to the civil war in the country.

The current Brent quote is $40.11 per barrel. Analysts note that price reductions will continue in the near future, as the news on the extension of the OPEC+ deal has already been fully taken into account in quotes.

GBP/USD. June 10, 2020 – Sterling approaches 1.28

The British currency continues to grow, approaching the level of 1.2800. Sterling was supported by data from BRC, according to which retail sales in May increased by 7.9% year on year against 5.7% a month earlier.

Additional support for the British currency was provided by high demand for risky assets. Investors are increasing long positions in the stock markets, commodity market and the market for high-yield currencies, as the yield on US government bonds is below 1%.

Tonight you should pay attention to the outcome of the meeting of the US Federal Reserve, which is likely to confirm its intention to maintain low interest rates for a long period of time. And for risky assets, this will be another good signal.

Thus, the British currency will continue to grow to an area above 1.28. The RSI indicator rushed up, which confirms this scenario.

EUR/USD. June 11, 2020 – Euro weakly declining from 1.14

The EUR/USD pair is consolidating at 1.14. The dollar was supported by the results of the meeting of the Federal Reserve, according to which the regulator kept the rate in the target range of 0-0.25% per annum and gave fairly clear signals about maintaining full-scale stimulation for as long as required.

At the same time, the Fed shared forecasts for US GDP: experts expect a contraction of the economy by 6.5% this year, and the unemployment rate may reach 9.3%, rather than 3.5%, as previously expected. However, these data did not exert any visible pressure on the exchange rate of the American currency.

Today, you should pay attention to the producer price index in the US for May and the number of initial applications for unemployment benefits. Experts predict a gradual decrease in the number of calls – both primary and repeated. If these forecasts are confirmed, then it will be possible to speak not about improving the situation, but at least about the beginning of stabilization in the American labor market. And this can provide significant support to the dollar.

EUR/USD. June 15, 2020 – Euro moves away from highs

The euro remains under pressure after falling to 1.12 at the end of last week. The current quotation of the EUR/USD pair is 1.1240. Today, the macroeconomic calendar is almost empty, the main events of the United States and the eurozone will be held later this week.

Today, attention should be paid only to inflation data in Italy: consumer prices in the country in May fell by 0.2% after a zero change in April. This suggests that the third eurozone economy has already faced deflation, which could push the ECB to further soften the parameters of its monetary policy.

The dollar was supported by data on consumer confidence from the University of Michigan: the index rose in June to 78.9 points against the May mark of 72.3. The restoration of the indicator signals that the «bottom» of consumer sentiment has already been passed. However, fears of the second wave of the US epidemic continue to be a risk factor for the US currency.

EUR/USD. June 16, 2020 – Dollar resumes its growth

Yesterday, the EUR/USD pair appreciably strengthened, reaching the level of 1.1350. However, on Tuesday, the euro began to decline to 1.1300. Before the US dollar was under pressure amid a fall in the levels of ten-year government bond yields and a general improvement in investor risk appetite.

However, the decline was replaced by strengthening after the publication of data on business activity in the manufacturing sector of New York in June: the index was -0.2 points against the May value of -48.5. This means that business and production are gradually returning to life.

Today you should pay attention to the statistics block from Europe. Germany and the eurozone will present reports on the business sentiment index from ZEW in June, experts predict a noticeable improvement in both cases. The day will end, most likely, with a weakening dollar after the publication of the report on retail sales: the rate of decline should accelerate from -21.6% to -32.6%.

GBP/USD. June 18, 2020 – Sterling continues to decline in anticipation of the Bank of England meeting 

On Thursday, the GBP/USD pair continues to decline, following the dynamics of yesterday. The current quotation of the pair is 1.2475. The pressure on the sterling was exerted by weak macroeconomic data from the UK: the consumer price index (CPI) in May rose by only 0.5% after rising by 0.8% in April. At the same time, the target level of the Bank of England is at around 2%.

Such a sharp decline in inflation may force the British Central Bank to introduce additional monetary incentives, which will negatively affect the exchange rate of the national currency. Today, a meeting of the Board of the Bank of England will take place, from which market participants expect the interest rate to remain at 0.1% and increase the QE program.

An additional source of pressure on the pound remains uncertainty around Brexit. And if today the regulator decides on a new round of monetary easing, the British currency could fall to the level of 1.2400.

EUR/USD. June 19, 2020 – The euro is growing slightly from the level of 1.12

Yesterday's trading ended with a decrease in the euro to around 1.1180. The dollar rose in price to its main currency competitors amid sales of the euro and the pound, as well as amid growing investor appetite for defensive assets. The probability of the potential occurrence of the second wave of the coronavirus epidemic puts pressure on the entire spectrum of risky assets.

However, today the EU summit took place, during which the head of the European Parliament, David Sassoli, called on the heads of state to approve a plan for the restoration of the EU economy by €750 billion and a draft next seven-year budget for 2021-2027. At the same time, he recognized the presence of many disagreements on important issues and the need for another summit in the future. Such news provided some support to the European currency, and today we will see a weak growth of the euro from the level of 1.12.

EUR/USD. June 22, 2020 – Euro fluctuates slightly near the level of 1.12

The EUR/USD pair continues to trade near the level of 1.12, fluctuating slightly on both sides of it. Today, the macroeconomic calendar is almost empty, so the dynamics of the instrument will not differ in activity.

At the end of last week, market participants drew attention to the speech of US Federal Reserve Chairman J. Powell, who noted that economic recovery would be long and difficult. These comments put pressure on the dollar, which led to the pair growing to the level of 1.1230.
 
Today, you should pay attention to data on home sales in the US secondary market. The indicator may show growth of 1.6%, which will provide some support to the US dollar. On Thursday, important statistics on the final estimate of GDP will be released: experts predict confirmation of a preliminary estimate of the economic decline by 5%.

EUR/USD. June 23, 2020 – Euro could not overcome the level of 1.13

Yesterday, trading on the euro ended with an increase to the level of 1.1300. The reason for the growth of the EUR/USD pair was made by the statements of the White House economic adviser Larry Kudlow. The politician noted that in the USA there is no second wave of coronavirus diseases, which led to an increase in demand for risky assets.

Today, the eurozone countries have submitted their reports on business activity in the manufacturing sector and the services sector. Eurozone PMI rose from 39.4 to 46.9 points, better than forecast. The index of business activity in Germany also showed growth: from 36.6 points to 44.6, which was higher than analysts' forecasts either. Such figures provided strong support for the European currency.

In the afternoon, the US will publish business activity indexes in the manufacturing sector and services for June. Experts forecast growth from 39.8 to 48.0 points. You should also pay attention to data on new home sales in the USA for May: the forecast assumes an increase from 623 thousand to 640 thousand.

The RSI indicator pushed off the resistance level and turned towards the neutral zone. This signals that the euro is limited by the level of 1.13, and during the day we can expect a corrective decline in the pair to the level of 1.1270.

Brent. June 25, 2020 – Oil declines amid expectations of the second wave of coronavirus in the world

On Thursday, Brent quotes continued to be under pressure, fluctuating slightly at $40 per barrel. Concerns about a new outbreak of the coronavirus infection pandemic have a negative effect on the asset. WHO has announced a significant increase in the number of new diseases in the United States, China and Latin America. As a result, concerns about the slowdown in global economic recovery and lower demand for hydrocarbons returned to the market.

An additional factor in lowering oil prices was also data on changes in US oil reserves. Yesterday, the US Energy Information Administration (EIA) announced a 1.4 million barrels increase in raw material inventories in a week, while experts forecast a decrease of 100 thousand barrels. Stock growth has been observed for the third week in a row.

Today, attention should be paid to data on US GDP and durable goods orders. If statistics support the US dollar, oil will have another factor for further decline.

EUR/USD. June 26, 2020 – Euro is under pressure near the level of 1.12

The European currency continues to remain under pressure paired with the dollar amid growing demand for safe assets. Investors fear the second wave of Covid-19, as more and more new cases of coronavirus infection are recorded in the world. The current quotation of the EUR/USD pair is 1.1225.

Additional pressure on the euro was exerted by reports that the White House administration is considering options to introduce new and increase existing tariffs on imports of products from the European Union and the UK worth $7.5 billion.

At the same time, the US dollar received support from data on the volume of orders for durable goods: the indicator in May showed an increase of 15.8% m/m after a month earlier decline of 17.7% m/m. Today, you should pay attention to the publication of statistics on personal income and expenses of Americans for May.

GBP/USD. June 29, 2020 – Sterling down to 1.23

The British sterling continues to decline at the beginning of a new trading week. The current quotation of the pair is 1.2300. Last Friday, the United States presented macroeconomic data that signaled in favor of further strengthening of the US currency. In particular, personal expenses of US citizens in May grew by 8.2% mom after a decrease of 12.6% mom in April. Analysts expected an increase of 8% m/m. Revenues, on the other hand, decreased by 4.2% m/m after rising by 10.8% m/m in April. Investors expected a decrease of 6% m/m.

In addition to statistics, the dollar was supported by reports from the Fed that the regulator suspended cash injections into financial markets and launched the reverse process. Thus, the balance of the Federal Reserve for the week decreased by $ 75.5 billion, and a week earlier – by $ 28 billion.

At the same time, pressure on the sterling continues to exert uncertainty on Brexit. Last week, Britain’s chief negotiator, David Frost, accused the EU of creating a deadlock in the negotiations. And EU negotiator Michel Barnier expects a breakthrough in resolving the issue only in October. Negotiations on Brexit will start today, however, the participants are skeptical in advance about its effectiveness. Thus, a further decline in the pound to the level of 1.23 seems quite probable.

EUR/USD. June 30, 2020 – Euro consolidated at 1.12

On Tuesday, the EUR/USD pair continues to decline, breaking the level of 1.12. The euro was pressured by weak macroeconomic data from the eurozone: the consumer and business confidence index in June recovered from 67.5 to 75.7 points, which was worse than analysts' forecasts, expecting the indicator to rise to 80 points.

In the United States, on the contrary, economic statistics provided substantial support to the US dollar: pending sales in the secondary housing market in May rose to 44.3% m/m compared to a decline of 21.8% in April.

Today, the eurozone has presented preliminary data on the consumer price index for June: annual inflation accelerated from the May level of 0.1% to 0.3%. According to preliminary estimates, core annual inflation this June was 0.8%.

In the evening hours, attention should be paid to the speech by the head of the US Federal Reserve, J. Powell, which will help market participants understand the regulator's further actions to stimulate the US economy.

EUR/USD. July 02, 2020 – Euro rose to the level of 1.1300, but failed to overcome it

The pair EUR/USD yesterday managed to grow to the level of 1.13, however today the quotes turned down to the level of 1.1275. Pressure on the euro was exerted by statements by German Chancellor Angela Merkel that EU members are far from an agreement on a restoration fund and budget. An additional negative brought data on the producer price index in the eurozone for May, reflecting an insufficient recovery of the indicator (-0.6% against the forecast -0.5%).

Yesterday, the USA presented data on the labor market from ADP: in June, the number of jobs increased by 2.369 million, which significantly exceeds the «failure» in May by 3.065 million. The forecast assumed a recovery of the indicator by 2.850 million. Today we should pay attention to unemployment statistics and the number of people employed in the non-agricultural sector in June. The dollar is likely to receive significant support after publication.

However, one should also take into account the fact that a certain appetite for risky assets has returned to the market, so the euro will feel confident during the day. Moreover, unemployment data in the eurozone turned out to be better than expected (7.4% against the forecast of 7.7%), which will also support the European currency.

Brent. July 03, 2020 – Potential for rising oil prices is almost exhausted

Oil prices on Friday continue to trade above $42 per barrel. The current Brent quote is $42.60. Support for the asset this week was provided by data from the American Petroleum Institute (API) and the US Department of Energy on crude oil reserves in the country, reflecting a decrease in reserves of 8.1 million and 7.1 million barrels, respectively.

However, despite a local recovery, Brent quotes may go down already in the near future amid a general deterioration in market sentiment due to the aggravation of the epidemiological situation in the world, which poses a threat to global hydrocarbon consumption.

Additional pressure may come from comments by Russian Energy Minister Alexander Novak that he hopes to achieve a balance or deficit in the global oil market in July. Market participants saw in these comments a hint of Russia's unwillingness to participate in the further extension of the OPEC ++ energy deal. Thus, in the short term, oil prices may begin to decline to the area of ​​$42 per barrel or lower.

EUR/USD. July 06, 2020 – The euro strengthened to 1.13, but failed to gain a foothold above this level

At the beginning of the new trading week, the European currency showed strengthening to the level of 1.13, but could not rise higher. The euro was supported by signs of economic recovery in Germany, as well as hopes for additional incentives in the near future.

In particular, the volume of production orders in Germany grew in May by 10.4% after quarantine restrictions were relaxed in the country. Since this country is Europe's strongest economy, its restoration gives hope to other European countries.

In addition, market participants are waiting for a decision to create a restoration fund in Europe. On Thursday, a meeting of EU finance ministers will take place, and on July 17-18, a summit of regional leaders is planned.

Today is not rich in publishing important macroeconomic data. One should pay attention only to business activity indices in the construction sector throughout Europe: all indicators showed growth. Additional support for the euro today was provided by data on retail sales in the eurozone in May. Sales in the region grew by 17.8% compared with April -12.1%.

GBP/USD. July 07, 2020 – Sterling is trying to gain a foothold above the level of 1.25

The British currency continues to stay in the area of ​​local maximums – above 1.25. The GBP/USD pair is under the influence of multidirectional news, which does not allow sterling to decide on the movement vector.

On the one hand, the pound received support from data on business activity in the country's construction sector: the indicator unexpectedly rose to 55.3 points against 28.9 points a month earlier. Experts predicted growth to 47 points.

At the same time, the currency is under pressure amid growing tensions between the UK and China. In June, Britain announced its readiness to offer citizenship to nearly 3 million Hong Kong residents whose civil liberties are threatened by a new national security law. The British authorities also thought about introducing a ban on the participation of the Chinese company Huawei in the deployment of fifth-generation networks (5G). China also promised to take action in response.

Thus, the UK may be drawn into a trade war with China, which will inevitably lead to a deterioration in the country's economic condition, already undermined by the protracted negotiations on Brexit.

Brent fundamental analysis for July 8th

Brent crude oil continues to trade above $43 a barrel. Market participants are waiting for data on US crude oil inventories from the US Department of Energy. Also, the absence of a certain dynamics of quotes is explained by the reluctance of traders to take risks amid the deteriorating epidemiological situation in the world.

The number of new Covid-19 diseases in the USA continues to grow, exceeding 50 thousand per day. Experts note that concerns about the second wave of the epidemic could provoke the reintroduction of restrictive measures, which will slow down the global economic recovery and again reduce the demand for hydrocarbons.

Moreover, the economic crisis in China casts doubt on the ability of the Celestial Empire to fulfill its obligations under a trade deal with the United States. According to the latest data, oil exports from the US to China in May amounted to only $2 billion. If relations between countries continue to deteriorate, the risk of a new round of trade war will be another threat to global economic growth.

Today, attention should be paid to data on stocks, as well as oil production in the United States. Analysts forecast a 3.1-million-barrel reduction in stocks. If recent data show growth, Brent quotes will return to the level of $43 per barrel.

GBP/USD. July 09, 2020 – The sterling rushed to the level of 1.27

The British currency continues to grow steadily on Thursday, approaching 1.27. The growth is primarily due to the weakening US dollar amid growing demand for risky assets. At the same time, the sterling itself received support after the British government announced its latest economic recovery plan after the pandemic in the amount of 30 billion pounds ($38 billion).

The plan includes a reduction in taxes on the purchase of housing, discounts in restaurants for all citizens, as well as a cash bonus for employers who do not fire their employees.

At the same time, the growth potential of the sterling is limited, since the main driver of the growth of the British currency today are the trade negotiations between the European Union and the UK, and they still look rather uncertain.

Thus, the growth of the GBP/USD pair may be limited by the level of 1.27. The RSI indicator is growing slightly from the neutral zone, which confirms this scenario.

EUR/USD. July 10, 2020 – The dollar is strengthening after the release of labor market data

The pair EUR/USD on Friday shows a recovery to the level of 1.13 after falling to 1.1250. Yesterday, it became known that the US Supreme Court allowed the New York attorney to receive D. Trump's financial statements, which poses certain risks for him on the eve of the presidential election.

Market participants also drew attention to the growing number of cases of new coronavirus diseases in the United States. In some states, the country reintroduces quarantine restrictions.

Yesterday, the States presented data on the labor market: the number of claims for unemployment benefits for the week amounted to 1.314 million, a decrease of 99 thousand, better than the forecast. Today, attention should be paid to data on producer prices, the decline rate of which should slow down from -0.8% to -0.6%. If the forecasts are confirmed, the US currency will be able to complete the week on a major note.