Mining rig maker Canaan argues against wholesale crackdown on bitcoin mining in China

from Forex News https://www.investing.com/news/forex-news/mining-rig-maker-canaan-argues-against-wholesale-crackdown-on-bitcoin-mining-in-china-2520896
via IFTTT

Investment Bank Outlook: 02-06-2021

Citi Our eTrading desk observes a reasonably calm and subdued session overnight, with interbank volumes for the major deliverable pairs on average 10% lower than the 30 day average. We think it should be a quiet morning for the European session with just Germany retail sales. Later today, we are bound to see some headlines, from Fed speakers but also an ECB report on the International Role of the Euro though note that ECB speakers are strictly speaking on climate.We note a few things to focus on in what was otherwise a quiet session. Fed Governor Brainard gave her two cents on the current debate. TRY found fresh record lows in typically thin liquidity conditions after the NY close, taking note of comments from President Erdogan who said it was “imperative that we lower interest rates”.We have retraced somewhat since, and expect the currency to remain volatile. KRW markets have also been discussing the central bank though from a rather different angle as the market begins to price in rate hikes, though our strategists think the pricing is too aggressive relative to the US. AUD failed to find inspiration in a Q1 GDP print, while CNH looked through headlines from US/China.RBC Capital Markets Overnight: Australia Q1 GDP growth of 1.1% y/y was better than expected. The details were encouraging, with the economy tracking a little above the RBA’s May forecasts, but the Victoria Covid-19 outbreak will keep policymakers cautious. Iron ore prices also have not recovered from the early May drop, though they have stabilised lately.Day ahead: The highlights of the day’s calendar include Germany retail sales, UK mortgage approvals, and Canada building permits, so not exactly the usual market-moving stuff. There are a number of Fed speakers coming up, as well as ECB President Lagarde accepting a prize.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/investment-bank-outlook-02-06-2021"
via IFTTT

Daily Market Outlook, June 2, 2021

Daily Market Outlook, June 2, 2021 Asian equities were mixed overnight with stocks slipping across China and Hong Kong, while Japanese and Australian shares outperformed, the latter driven by a better-than-expected Q1 GDP report. Australia’s economy was reported to have expanded by 1.8% in the first quarter helped by strong spending by households, pushing it back above its pre-pandemic level. However, the recent re-imposition of lockdown restrictions across some cities, in response to renewed outbreaks of the virus, is likely to have constrained activity in Q2. Meanwhile, yesterday the UK reported no new Covid-19 cases for the first time since the pandemic began.Today’s Bank of England lending data for April is expected to show a resurgence in the number of UK mortgage approvals, largely in response to Chancellor Sunak’s decision to extend the stamp duty holiday. Having spiked around the turn of the year, the number of mortgages being approved had gradually eased back, hitting an 8-month low in March, as the window for homebuyers to complete and take advantage of the temporary stamp duty ‘holiday’ began to close. However, the Chancellor’s decision at the March Budget to extend the current scheme up until the end of June, with a gradual return to its original form between July and end-September, is expected to see an upturn in mortgage activity over the next few months. Expect 92.0k mortgages to have been approved in April, up from 82.7k in March.Meanwhile, the consumer credit numbers are expected to provide further evidence of the wider upturn in UK activity that is taking place, particularly with non-essential retail shops reopening from April. On an aggregate basis, households have made a net repayment of unsecured credit in each of the seven months between last August and March 2021. Expect an overall repayment in April net consumer credit, with some spending funded from the stock of built-up savings, the fall in unsecured borrowing is expected to be the smallest since last summer.Elsewhere, the calendar is exceptionally light with no major data releases due out of the US or Eurozone. A number of Fed officials are due to speak at a Fed forum on Racism and the Economy, including Evans, Bostic and Kaplan. Meanwhile, the Fed will also release its latest Beige Book. Across the Eurozone, a number of ECB officials are set to speak at a climate change conference, while ECB President Lagarde is due to talk at a prize ceremony.G10 FX Options Expiries for 10AM New York Cut(Hedging effect can often draw spot toward strikes pre expiry if nearby)EUR/USD: 1.2100-05 (685M), 1.2140 (370M), 1.2200 (368M), 1.2220-25 (400M)USD/CHF: 0.9150-60 (676M). EUR/CHF: 1.0800 (530M)GBP/USD: 1.4150 (473M), 1.4200 (443M)AUD/USD: 0.7700-15 (865M), 0.7740-50 (1.3BLN)NZD/USD: 0.7200-20 (1.5BLN)USD/CAD: 1.2100 (300M) . AUD/JPY: 83.15 (942M)USD/JPY: 108.50-60 (370M), 109.00-10 (370M), 111.25 (500M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.2150 bullish aboveEURUSD From a technical and trading perspective, the close through 1.2120 is constructive but bulls must defend 1.21 to set up a test of 1.2270/80. A close through 1.2150 would suggest a corrective phase developing.Flow reports suggest topside offers congested through to the 1.2300 level with weak stops limited through the 1.2320 area and long term trend line around the 1.2345 area likely to see strong offers before weak stops opening the topside to further gains through the 1.2400 level. Downside bids into the 1.2140-60 level likely to be light and then increasing through the 1.2120 level to 1.2080 before weak stops appear and open up a deeper move through to the 1.2000 level with very little congestion until that point.GBPUSD Bias: Bullish above 1.4150 bearish belowGBPUSD From a technical and trading perspective, as 1.3960 now acts as support, bulls will target a retest of 1.4230’s. Only a close back below 1.4150 would concern the bullish thesis opening the window for a corrective cycle.Flow reports suggest topside offers light through the 1.4250 area with some congestion increasing on any move to the 1.4300 and stronger offers in the area, a break above the 1.4310 area will likely see weak stops and breakout stops coinciding and the topside open to a quick squeeze through the 1.4350 level and an attempt on the possibly weak 1.4400 area and stronger stops again through the level. Downside bids likely to increase on a move through the 1.4150 area and into the 1.4100 with a couple of weeks of congestion building up in the area with weak stops on a break through the 1.4090-80 area and opening to the 1.4000 level with very little support other than limited sentimental bids, however, the move through will then start to see stronger bids into the 1.3950-1.3900 area limiting any further loses.USDJPY Bias: Bullish above 108 targeting 112USDJPY From a technical and trading perspective, as 108.30 supports bulls will target 110.70’s, a closing breach of 108.30 would suggest a corrective move to test 106.30Flow reports suggest downside light through the 108.50 before opening the market to a new test of the 108.00 level, stronger bids into the 107.80 however, a break through the level is likely to see weak stops and breakout stops appearing and the market free to quickly test 107.50 and an old trendline then nothing until closer to the 107.00 area where stronger bids start to appear but the downside opening to Feb levels, topside offers through to the 110.00 level with light congestion through the figure level and weak stops possibly limited and stronger offers likely increasing on a move higher towards the 111.00.AUDUSD Bias: Bearish below .7790 bullish aboveAUDUSD From a technical and trading perspective, the breach of .7790 refocuses attention on the downside as .7820 contains upside attempts, look for a test of .7680.Flow reports suggest topside offers into the 0.7800 area with weak stops through the 0.7820 before opening for a new run higher and strong offers likely through the 0.7840-60 area to build for the 79 cent level. Downside bids light through the 0.7750 area and stronger bids likely continue through to the 0.7700 area before weak stops appear below the 0.7680 and a stronger 0.7650 area then holds the downsideDisclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-june-2-2021"
via IFTTT

USDJPY, H4 bouncing above key support, potential for further upside

USDJPY, H4 is seeing strong support above 109.30 where there is a 50% fibonacci retracement and a 61.8% Fibonacci extension. This also coincides well with the moving average support we're seeing.Price could potentially rise from here towards 1st resistance at the 110.20 area.Disclaimer: Thematerial provided is for information purposes only and should not be consideredas investment advice. The views, information, or opinions expressed in the textbelong solely to the author, and not to the author’s employer, organization,committee or other group or individual or company.High Risk Warning: CFDsare complex instruments and come with a high risk of losing money rapidly dueto leverage. 73% and 65% of retail investor accounts lose money when tradingCFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You shouldconsider whether you understand how CFDs work and whether you can afford totake the high risk of losing your money.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/usdjpy-h4-bouncing-above-key-support-potential-for-further-upside"
via IFTTT

Market Update – June 2 – USD off lows

Market News Today – USD off lows but remains pressured.  USDIndex down to 89.63 yesterday back to 89.90 now. Good PMI data and a beat for EU CPI – (up to 2.0%) will focus minds at the ECB and a strong US Manu. PMI will add to the “to talk taper or not” at the FEB. OPEC+ agreed to increase production in July (USOil dipped from $68.60 to $67.35) US Markets closed flat (USA500 -2 to 4202); Zoom Earnings & profits beat, outlook trimmed, AMC rallied 22% after $250m investment. Asian markets are mixed. Overnight A significant beat for AUD GDP and revisions sent Aussie lower, positive comments from RBNZ Governor Orr sent NZD lower. German Retail sales – a huge miss (-5.5% vs -2.4%) as lockdowns bite, EUR 1.2212 from 1.2225. GOLD dipped from $1916 yesterday to under $1900 now.

This week – Heavy dose of global data – top of the shop is US NFP, Eurozone Retail Sales & GDP and monthly PMI data – The data could  reveal the acceleration in annual inflation growth for major economies.

European Open – The June 10-year Bund future is up 13 ticks at 169.96, the Sep Treasury future little changed, while in cash markets the U.S. 10-year rate is now unchanged at 1.61%, after the paper erased overnight losses. DAX and FTSE 100 futures are up 0.1% and U.S. futures are also posting fractional gains, but it looks like a cautious start to the day, with investors still digesting yesterday’s data round ahead of the Beige Book for the next Fed meeting.

Today – CB Speak day – US Private Oil Inventories, RBA’s Debelle, Bullock, ECB’s Elderson, Lagarde Buda’s Weidmann, Fed’s Harker, Evans, Bostic, Kaplan, Kashkari

Biggest FX Mover @ (07:30 GMT) GBPNZD (+0.37%) rallied from under 20-day moving average yesterday and a dip to 1.9470 earlier, over PP and R1 to 1.9580.  MAs remain aligned higher, RSI 64.75 and rising, MACD signal line rising (under 0 line) however, histogram has broken over. Stochs. still moving higher and into OB zone. H1 ATR 0.0021, Daily ATR 0.0140.

Click here to access our Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /241608/
via IFTTT

Dollar Climbs From Five-Month Low; Turkish Lira Slumps

from Forex News https://www.investing.com/news/forex-news/dollar-climbs-from-fivemonth-low-turkish-lira-slumps-2520839
via IFTTT

Dollar Up From Five-Month Low, Investors Await Key U.S. Economic Data

from Forex News https://www.investing.com/news/forex-news/dollar-up-from-fivemonth-low-investors-await-key-us-economic-data-2520836
via IFTTT

Dollar gets respite from pick up in U.S. manufacturing before jobs report

from Forex News https://www.investing.com/news/economy/dollar-gets-respite-from-pick-up-in-us-manufacturing-before-jobs-report-2520762
via IFTTT

Dollar in Narrow Range as Fed Officials Continue to Downplay Inflation Fears

from Forex News https://www.investing.com/news/forex-news/dollar-in-narrow-range-as-fed-officials-continue-to-downplay-inflation-fears-2520524
via IFTTT

Mexico's remittances rise nearly 40% to $4.05 billion in April

from Forex News https://www.investing.com/news/forex-news/mexicos-remittances-rise-nearly-40-to-405-billion-in-april-2520376
via IFTTT

Too embarrassed to ask: what is "commodity supercycle”?

Commodities – that is, raw materials ranging from oil and copper to cotton and grain – are not typically a large part of a private investor’s portfolio. 

Commodity prices are highly cyclical. When prices rise, commodity producers boost supply to take advantage. As supply rises to meet demand, prices fall again in turn, and so on. 

Over the very long term, commodities prices tend either to be flat or falling in real terms, because technological improvements lead to more efficient ways of using and extracting raw materials. 

However, there are periods during which demand rises strongly because of a major change in the global economy. Supply then struggles to keep up as producers adjust to this structural shift.

This leads to a prolonged period of rising prices and investment in supply by commodity producers, until supply has finally grown enough to meet or surpass demand. 

This is known as a commodities “supercycle”. 

The most recent example came in the early 2000s, when China opened up to world trade, and became a significant force in the global economy. 

China’s rapid economic growth saw surging demand for all commodities, as the country pumped money into building roads and railways, and expanding its cities.

That boom lasted – with a brief pause during the global financial crisis in 2008 – right up until 2011, with oil peaking at well over $100 a barrel and copper at more than $4 per pound. 

By that time, China’s growth was starting to level off. 

However, more importantly, commodity producers such as mining companies had invested so much money on finding more raw materials, that the new supply overwhelmed demand, and prices dropped again. 

Today, there are signs that we might be seeing another commodities supercycle, as governments around the world spend heavily to help their economies recover following the pandemic. 

The price of copper in particular has shot up, as it is used widely in “green” technologies. 

The best way for private investors to get exposure to a commodities boom is through the resource producers themselves – by investing in miners, for example. 

However, it’s worth bearing in mind that all such booms come to an end eventually.

To learn more about investing in commodities, subscribe to MoneyWeek magazine.

from Moneyweek RSS Feed https://moneyweek.com/investments/investment-strategy/too-embarrassed-to-ask/603328/too-embarrassed-to-ask-what-is
via IFTTT

CAD & USOil – The trends continue into the new month

USDCAD & USOil, H4

Canada’s GDP grew at a 5.6% pace in Q1, undershooting expectations following the 9.3% clip in Q4 (revised from 9.6%). However, GDP was 0.3% firmer compared to Q1 of 2020 as the economy has rebounded from the huge drop in Q2 of 2020.

Of course, prices have picked up, with the GDP implicit price index climbing 2.9% in Q1, led not surprisingly by higher prices for construction materials and energy goods. Housing investment continued to grow at a strong pace, supported by very favorable financing conditions and the recovery in the job market. The return of restrictions in April and May is expected to leave the economy with little growth during the quarter (we see a 0.5% gain in Q2, with risk for a flat or even negative reading). The BoC is likely to look through the slump in Q2 as vaccinations have ramped up, consistent with a resumption of the recovery in the second half of this year. The monthly GDP report revealed a jump to 1.1% growth in March, a bit faster than expected, from the 0.4% pace in February, consistent with strong growth going into the return of restrictions in April.

USDCAD was little changed following the miss in Q1 Canada GDP, though remains near two-week lows of 1.2025 printed at the North American open. Two-plus year highs in USOil  has supported the CAD today, as prices topped over $68.60, while overall, the USD remains on the heavy side. USDCAD‘s six-year low of 1.2012 seen on May 18 is the next support level. A break below there brings the May, 2015 low of 1.1920 into focus.

USOil rallied to levels last seen in October of 2018, topping at $68.60, up from Monday’s low of $66.69. Improving demand, as economies reopen has supported prices of late, as OPEC+ says surplus inventories will be burned off over the next month or two. The cartel is expected to gradually relax production caps through July, which could limit price gains going forward. Iran is the wild card, and should sanctions on the country’s oil exports be lifted, upwards of 2.0 mln bpd could hit the market later in the year, likely to put renewed pressure on prices, as we saw in late-May when the Iranian news first emerged and prices spiked lower to $61.33.

 

Click here to access our Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /241343/
via IFTTT

The real problem of Universal Basic Income (UBI)

Let’s say you are unemployed and someone offers you $15 an hour to work a 40-hour week as a shift manager at McDonald’s in the US. That would give you $600 a week. It’s not a fortune. It’s not awful either. So all other things being equal, if you were in need of work you’d probably take it. But what if someone else was offering you a little over $600 a week if you didn’t take it? $650 perhaps — to stay at home instead. My guess is that you might think twice. 

This might be part of the explanation behind the trouble American companies are having hiring at the moment. For much of the past 18 months the US government has not only showered one-off stimulus cheques on the general population but also offered hugely bumped up unemployment benefits. People have been able to claim more and for longer than ever before (39 weeks rather than 26 weeks). The average weekly unemployment benefit across the country is now well over $600, with some states paying over $700.

The numbers aren’t as good as they were in the earlier part of the pandemic, when the average replacement rate (the per cent of your income replaced on job loss) rose from a pre-pandemic 48 per cent to 145 per cent. But it does offer a reason for a lot of people to decide, as Intertemporal Economics puts it, that “the expected income from employment is less than government transfers and the value of free time”. 

This may be particularly the case when you add in the pandemic savings cushion that households have built up — cash that allows them to bide their time before re-entering the market. There may also be a short-term wealth effect here: if your house price is up 10 per cent, you may feel less long-term financial pressure. Note that a slightly higher percentage of Americans said they felt financially secure in 2020 than in 2019.

The numbers show the result of all this — a lack of supply in the jobs market. April employment numbers showed 75 per cent fewer people moving back into employment than most analysts expected. This cannot be laid at the demand door — there are plenty of vacancies going. There are other issues too — think health concerns (who wants to leave the house unvaccinated?) and childcare issues (not all US schools are open). That’s all fair (there’s a reason why some 60 per cent of those looking for work want it to be remote). But the latter two points surely only come into play for many households because of enhanced benefits and pandemic savings.

All this has been tough to measure during the pandemic. But there is a healthy body of research suggesting that the more you pay people not to work the less they work, and we will soon find out whether this holds good post coronavirus. As Capital Economics points out, some US states have now opted out of the enhanced Federal Programs (“incentives matter” says the Governor of Montana), which could explain a recent “more rapid decline in jobless claims.” 

All this might seem obvious. But it is a problem for those who believe in a universal basic income (UBI) — and who think that the pandemic should be the catalyst that hastens its introduction in developed countries. The basic UBI premise is that if you can find the cash to give everyone a non-means-tested, unconditional income to cover all their basic needs, they will become happier, healthier, more productive and — crucially — less likely to be unemployed. 

It’s a lovely idea. But beyond the very obvious cost issue, it comes with a problem: there have been many small experiments, none of which have produced any evidence that it works. The only nationwide randomised control trial done so far was in Finland a few years ago. There was one clear finding: those getting the basic income were much happier than those in the control group. This is unsurprising — it’s hard to imagine free money making many people less happy. However on the matter of employment there was no clear conclusion. 

You can argue that a “real UBI” has never been tried: most experiments and promises are more about offering a guaranteed minimum income to a limited number of people. Witness the Scottish government’s recent mention of a £37,000 minimum income if it secures an independent Scotland. And you can argue that when it comes to free money, the timescale might make a major difference. If you know you are getting a free $600 a month for three months, you might choose to put your feet up. If you know it is forever, you are surely more likely to work out a long-term career plan. 

What you can’t do is argue that we have any more evidence now that a UBI would be good for employment than we did two years ago. Some fans might say that doesn’t matter: there is a strand that think automation will destroy the jobs market, making UBI simply a facilitator of better leisure. 

But if that’s your argument, you need to be sure you are right on the jobs bit. Because one thing the pandemic has taught us is that if you give people the kind of financial support that allows them to withdraw their labour, a good number of them probably will. And that doesn’t help anyone long term. Just ask the 44 per cent of US small businesses who say they can’t find anyone to take the jobs they are offering.

• This article was first published in the Financial Times.

from Moneyweek RSS Feed https://moneyweek.com/economy/us-economy/603330/the-real-problems-of-universal-basic-income-ubi
via IFTTT

The Greenback against the offshore Renminbi – Closed below a 3-year low

Overnight, the decline of the US Dollar against the offshore Renminbi (USDCNH) was suspended and closed slightly up 0.35% to 6.3736. In any case, the current currency pair is still under pressure below the 3-year low (6.3754). The factor that promotes the mild recovery of the US dollar against the Renminbi is the People’s Bank of China’s announcement that it will raise the foreign exchange deposit reserve ratio by 2 percentage points to 7% from June 15.

It can be seen from the PBoC’s restart of this policy policy 14 years ago and a larger adjustment range (previously an average of 0.5%) than before, that the authorities do not want to see the offshore RMB exchange rate against the US dollar continue to rise. The increase in the foreign exchange deposit reserve means that the liquidity or supply of foreign currency (USD) will be reduced, thereby achieving the purpose of hedging the appreciation of the Renminbi and stabilizing the exchange rate.

In any case, during the Asian trading session today, the US Dollar fell against the offshore Renminbi under pressure and recorded a decline of 0.1% in just 4 hours. The market’s short momentum still seems to show no signs of easing. The weakness of the US dollar is all related to US fiscal and monetary policy. Since the outbreak of the pandemic, the “unlimited monetary easing” adopted by the Fed has paved the way for the weakness of the US Dollar. Although the US economy has gradually returned to the right track with the acceleration of vaccination, the Fed did not express its willingness to reduce the scale of its debt purchases earlier. On the contrary, during the same period, other major central banks such as the Bank of Canada, the Bank of England, and the Reserve Bank of New Zealand have issued signals to gradually tighten their monetary policies. In this significant contrast, the US Dollar will inevitably become the weaker major currency. Not only that, but a series of plans launched by the Biden administration will also lead to a continuous expansion of the budget deficit, thereby exacerbating the downside risks of the US Dollar.

Currently, as many as 24 countries have opened the path to de-dollarization. Among them, Russia, which has heated up tensions with the United States, is more active in reducing its share of US Dollar holdings. In the Q4 2020, the US Dollar accounted for 48.3% of Russia’s export settlement, which was the first time in history that it fell below 50%. In addition, IMF data also showed that in the fourth quarter of last year, the share of the US Dollar in global foreign exchange reserves had hit the lowest level in nearly 25 years, at 59%. These data all reflect the weak demand for the US Dollar, and its status as a global reserve currency has also been threatened.

As the US economy is back on track (including the service industry that has been more severely affected by the pandemic), inflation data including core PCE exceeded the target level and hit a new high since 1992, at 3.1%, and CPI hit 2008 The new high since September 2009 is 4.2%.

This week the market will also focus on the performance of US employment data. Recent non-agricultural reports show that too many stimulus measures and unemployment assistance have made local low-income groups reluctant to return to employment, which is obviously not conducive to stable economic growth. As many states in the United States have adjusted their unemployment compensation plans, this may encourage more Americans to return to work. When employment data continues to improve for a period of time, it may not be far from the day when the Fed will withdraw from the quantitative easing policy.

Technical Analysis:

In June 2020, the USDCNH began a strong downward trend. The currency pair has fallen from a high of 7.1504 to the lowest level of 6.4873 in December of the same year, and has fallen by more than 10% in half a year. The trend continued until February of this year. The currency pair rebounded from a low of 6.3996 to a high of 6.5826 seen in March. In April, the exchange rate broke the March high in a short-term and recorded 6.5869, and then fell all the way and broke this year. February low (6.3996) and June 2018 low (6.3754). These two levels, plus the lips (green) of the Alligator indicator (6.5376) are the key resistance areas in the near term. If the breakout is successful, the exchange rate will continue to explore the teeth (red) (6.4063) and jaws (6.4271) of the Alligator indicator and the 78.6% Fibonacci retracement level extending from the low in March 2018 to the high in September 2019 6.4410. However, if the breakout fails, the exchange rate may continue its short momentum and test 6.3245 and the 2018 annual low of 6.2355.

In terms of indicators, MACD is in a negative configuration; Relative Strength Index (RSI) and Stochastics are maintained in the oversold area, the latter has just formed a golden cross.

Click here to access our Economic Calendar

Larince Zhang

Regional Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /241323/
via IFTTT