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MARKET MOVERS

14th June

Victor Shen

Core Retail Sales (USD)  
Tuesday 16th June 11:30 pm
Partly supported by last month’s astoundingly positive job data, US core retail sales are forecasted to rebound from last month’s abysmal -17.2% to about 5.5%. Coupled with further easing of restriction, US economic outlook is looking more positive.

CPI m/m (CAD)
Wednesday 17th June 11:30 pm
Canadian inflation is forecasted to increase from -0.7% to 0.8%. This improvement will help the BoC bring inflation back within the target band of 1-3%. This is will reduce the likelihood of further interest rate cuts from BOC

Unemployment rate (AUD)
Thursday 18th June 12:30 pm
Australian unemployment rate is forecast to increase from 6.2%- 7.0%. Unemployment should start falling soon as the loosening of restrictions brings more jobs back into the market

MAJOR NEWS

Federal Funds Rate Remains Unchanged
14th June

Wendy Le
 
On June 11th at 4:00 am, the federal funds rate was announced to have remained unchanged at the targeted rate of 0-0.25%. This was an expected decision from the Federal Reserve as the annual inflation rate in May fell from 0.3% to 0.1%, a record low since September 2015, largely due to the plunging oil prices as well as the decline in clothing and transportation prices. The aim is to successfully recover from the impacts of COVID-19 by increasing spending within the economy which will also increase the inflation rate to the targeted 2%. US unemployment claims are also falling and this decision was made in order to support economic recovery.

TECHNICAL ANALYSIS

USD/CAD

Wendy Le
 
Last week, the USDCAD broke past the 1.35378 resistance level and closed above it. The MACD indicator suggests that there might be an upward trend as the fast-moving average and slow-moving average lines are about to cross. However, the MACD indicator is an average of historical prices and therefore lags behind the current price. If there is an upward trend, the previous support level at 1.38464 is likely to be the new resistance level.

ANALYST OUTLOOK

Wendy Le
BCom/Econ

GBPUSD – Bearish
The GBP is likely to weaken in the coming week as on June 12th, it was revealed that the UK economy had contracted by 20.4% in April (mainly due to the lockdown). The public’s expectations on the inflation rate have fallen which indicates negative consumer sentiment. Asset purchase facility is also forecasted to expand from £645 billion to £745 billion which will weaken the GBP.

Victor Shen
BEng (Hons)/Com

AUDUSD -Bearish Outlook
Aussie Dollar rallied to its yearly high behind strong commodity prices and higher risk-off sentiment but due to second wave COVID fears the Aussie sharply fell and RSI has since then entered overbought condition and begun to consolidate. I speculate there is still downside momentum, due to forecasted stronger US retail sales figures coupled with Australian unemployment rate forecasted to increase. AUDUSD could potentially test support level 0.67627 which has been tested 6 times this year.