Daily Analyses

03.06.2020

Fundamentals

Europe

In Eurozone, the news was important for the markets participants. "All communities should be sensitive to excessive use of force and respond to such incidents in a safe, effective and respectful way to the rule of law and human rights," said Josep Borrell, High Representative of the Union for Foreign Affairs and Security Policy, regarding the George Floyd protests in the United States. Oliver Varhelyi, Commissioner for Neighbourhood and Enlargement, said Turkey is also involved in the third term of the EU's IPA, which covers the period between 2021 and 2027. On the other hand, French Finance Minister Le Maire said there would be no recourse to a tax increase in repayment of incentives to overcome the crisis caused by the coronavirus pandemic. Announcing that retail stores in the country will begin operations in July 15 and a support plan for the aviation sector will be announced next week, Maire also said that he expects the French economy to contract by 11 percent in 2020. German Foreign Minister Heiko Mass said he planned to replace the travel warnings already in effect for European Union countries and several other countries with softer rules. In addition, German media reported that German Chancellor Angela Merkel is trying to reach a compromise on a second stimulus package of 100 billion euros to help Europe's largest economy recover from a Coronavirus-induced deep recession.

US

In the US, critical statements were recorded. US President Donald Trump accused state governors of being weak in the escalating violence in protests following the death of George Floyd as a result of police violence, saying governors should take much tougher action on demonstrators. New York Governor Andrew Cuomo expressed concerns that the fight against the coronavirus outbreak could be compromised by the protests leaping to New York, and that social and economic sacrifices, which had been introduced for two months to prevent the outbreak could be wasted. U.S. Senate Majority Leader Mitch McConnell said he hopes the bill, which loosens the terms for small businesses to benefit from the coronavirus loan program and has already been passed by the House of Representatives, will also pass through the Senate soon. Meanwhile, Russian leader Vladimir Putin and US President Donald Trump discussed measures to combat the coronavirus outbreak and discussed the situation in the oil market and the OPEC+ agreement, the Kremlin Palace said. In addition, President Donald Trump had announced that the their relations with World Health Organization ended as WHO did not meet the demands for ‘fundamental reform’, yet WHO Director General Adhanom Ghebreyesus called for continued cooperation.

Britain

In Britain, statements made by government officials on the last trading day came to the fore. "We cannot agree with the EU on fisheries and equal treatment, because our position on these issues is fundamental principles," a spokesman for PM Boris Johnson said, adding that progress could be made when the EU agrees that no agreement will be reached on the current basis. He also said the violence against protests in the United States was alarming, warning that people should be allowed to protest peacefully. UK Health Minister Matt Hancock said the coronavirus crisis was far from over yet, but the progress should be proceeded with cautiously. A British government official told the Financial Times that Prime Minister Boris Johnson will meet with European Commission President Ursula Von der Leyen later this month, saying, "We need a comprehensive agreement until summer. We can not still continue these negotiations in September and October."

Asia & Turkey

Statements from China were at the forefront of the last trading day in Asian markets. Liu Guoqiang, Vice President of PBOC, said the impact of the Coronavirus outbreak had exceeded expectations and that the asset quality of Chinese banks could be affected as the economy faced downward pressures. Liu stressed that the new innovative policy tools implemented to increase loans to small and medium-sized companies are short-term policy regulation, not monetary easing. Chinese President Xi Jinping said that they would improve infectious disease testing capacity, improve public health emergency monitoring system, and also provide support for research and development of new traditional Chinese drugs. Chinese Foreign Ministry spokesman Zhao Lijian pointed out that racism against minorities is a social disease in the United States, adding that incidents of racially motivated violence involving law enforcement should be dealt with urgently. In addition, the spokesman said that the U.S. leaders' criticism and accusations against China contradicted the facts, adding that the practices announced by Trump seriously violated China's domestic affairs and damaged China-U.S. relations. In Japan, Finance Minister Taro Aso stated that there are currently no plans to issue ‘Coronabonds’ or bonds specifically to cover the costs of fighting the Coronavirus outbreak, but they did not completely rule out this possibility. Japan's Trade Minister Hiroshi Kajiyama said that they are in talks with South Korea over export controls they have been implementing since July 2019. In Turkey, Treasury and Finance Minister Berat Albayrak said that public participation financial institutions put 4 new financing packages into effect. "I wish ew financial support to be provided to our nation from housing to vehicles, from domestic production to vacation support will be auspicious. We succeed together, as we always say." Seismic research and drilling activities in the Eastern Mediterranean are continuing according to the previously set schedule, the State Department said. On the other hand, according to the data of the Ministry of Commerce, exports decreased by 40.9 percent to 9.96 billion dollars, imports decreased by 27.7 percent to 13.40 billion dollars in May, yet the foreign trade balance in this period increased by 104.2 percent and reached minus 3.44 billion dollars.


Indicators

MSCI iShared ETF’s

Msciisharedetfs
MSCI iShared ETF’sDownload Image

MSCI ETF indices are used for measuring the performance of a stock market located within a certain region. Prior to take any actions regarding the relevant region, stock market investment funds follow up the ETF yields and risk measurement.

10Y Bond Yields

10Ybondyields
10Y Bond YieldsDownload Image

Yields of the government bonds are determined by trading in a second market. High yields mean that the government will pay off high interest rates.On the other hand, low yields mean that the government will pay off lower interest rates.


US Index

USIndex

Technically, dollar index continues its downward movement in the minor price channel and faced support at the lower line of the descending channel pattern. If the index can break the lower limit line by maintaining the negative outlook on the new trading day, its retreats could also accelerate towards 97.20, 97.00 and 96.80 supports. 97.60 and 97.80 will be on our radar if the index wants to recover from this area.

Support97.2097.0096.80
Resistance97.6097.8098.00

Parities

EURUSD

Euro / dollar continues its positive pricing behavior in the ascending trend, ending channel pattern. If the pair, which is positioned above the upper barrier of the channel pattern and headed for preserving its gains, can hold on to this region and exceed 1.1220 resistance above, it will possibly test 1.1240 and 1.1270 resistance levels. 1.1180 and 1.1160 supports will be on our radar in the descending movements, which can be observed if the pair faces with take profit sales.

Support1.11801.11601.1130
Resistance1.12201.12401.1270

USDTRY

USDTRY, which retreated due to failing to overcome the strong resistance it faced at the 50-period simple moving average, eased below the ascending trend. We expect it to limit its movements at the lower barrier of the wedge, indicated by 6.6500 level located below 6.7000 and 6.6800 levels. On the other side, in case it recovers and gets above 6.7500 and 6.7700 resistances, 6.8000 resistance will also be on our radar.

Support6.70006.68006.6500
Resistance6.75006.77006.8000

GBPUSD

Stable pricing movements, which started from the ascending trend in sterling/dollar, seems to be headed towards ending the rectangular pattern. If the pair continues to trade in favour of the sterling, it will possibly break the channel's upper limit line strongly with the pressure of the positive trend and the rise may also gain momentum towards 1.2610, 1.2640 and 1.2680 resistances. 1.2550 and 1.2520 supports can be monitored in downward movements that may occur if the pair does not exceed the upper limit line.

Support1.25501.25201.2480
Resistance1.26101.26401.2680

USDJPY

After a short period of balancing at the 200-period exponential moving average, it appears that USDJPY broke the descending trend with the help of the strong price attacks, yet couldn't exceed the upper barrier of the ascending channel pattern. The pair faced with profit realizations in this area. If it breaks 108.20 support, 107.90 and 107.60 supports will be our targets. 108.80 and 109.10 resistances can be followed, if the pair tries to break the upper barrier of the pair.

Support108.20107.90107.60
Resistance108.80109.10109.40

Commodities

XAUUSD

The precious metal declined as a result of take profit sales, yet it subdued at the 50-period simple moving average. If the commodity, which we expect to limit its downward movements at the main ascending trend below 1720 support, holds above the trend and exceed 1730 resistance, it will probably follow 1736 and 1742 resistances, recover its losses and put an end to the minor price channel. In case the commodity eases below the ascending trend as a result of the pressure of the moving average, 1714 and 1708 supports located below 1720 can be followed in selling movements.

Support172017141708
Resistance173017361742

USOIL

Technically, crude oil moved upwards and ended the minor channel pattern. Following the short-term balancing of the commodity within the channel, the positive trend will continue to rise as this movement continues, If 38.40 is exceeded, 39.00 and 39.60 resistance levels will be our target levels. In possible take profit realizations, downward movements may follow 37.20 and 36.60 supports.

Support37.2036.6036.00
Resistance38.4039.0039.60

XAGUSD

The precious metal moved upwards in order to end the ascending channel pattern, yet it couldn't become permanent and retreated. Then, it limited its losses at 17.76, the 50-period weighted moving average. 17.98, 18.12 and 18.26 resistances can be followed in upward movements of the commodity, which may attempt to end channel pattern by getting support from the moving average on the new trading day. If it continues to retreat and breaks 17.76 level, 17.70 and 17.56 supports will be on our radar.

Support17.7017.5617.42
Resistance17.9818.1218.26

Indices

DAX30

DAX aims to end channel pattern by continuing its potential rise. It will target 12 300 and 12 380 resistances above 12 220, if it breaks the channel's upper boundary line with buying movements on the new trading day. If the index does not reach the volume that may exceed the upper limit line, 12 060 and 11 980 supports may be monitored in possible downward movements.

Support12 06011 98011 900
Resistance12 22012 30012 380

SP500

Technically, SP500, which continues its desire to rise in the minor price channel, is testing the area above the resistance of trend. If it permanently gets above the resistance we have been following in terms of the index's ability to move with strong rises, the value gains may also move towards 3 106, 3 122 and 3 138 resistances above. On the other side, 3 076 and 3 060 supports can be tested in case the index retreats.

Support3 0763 0603 044
Resistance3 1063 1223 138

Cryptos

BTCUSD

The cryptocurrency retreated strongly from the upper barrier of the ascending channel pattern and settled on the 50-period exponential moving average. It will possibly test 10 000, if it exceeds 9 700 resistance by staying above the moving average. In a possible decline below 9 450, which is the moving average, BTC will target 9 200 and 9 000 supports.

Support9 2009 0008 700
Resistance9 70010 00010 200

Economic Calendar

CountryTime (GMT)Action
Germany 07:55 German Services PMI (May)
Germany 07:55 German Unemployment Change (May)
Germany 07:55 German Unemployment Rate (May)
eu 08:00 Markit Composite PMI (May)
eu 08:00 Services PMI (May)
uk 08:30 Composite PMI (May)
uk 08:30 Services PMI (May)
eu 09:00 Unemployment Rate (Apr)
usa 12:15 ADP Nonfarm Employment Change (May)
usa 13:30 Seevol Cushing Storage Report
usa 13:45 Markit Composite PMI (May)
usa 13:45 Services PMI (May)
usa 14:00 Factory Orders (MoM) (Apr)
usa 14:00 ISM Non-Manufacturing Employment (May)
usa 14:00 ISM Non-Manufacturing PMI (May)
usa 14:30 Crude Oil Inventories
usa 14:30 Cushing Crude Oil Inventories

Central Bank Calendar

RegionMeeting DateActionCurrent Interest Rate
eu 04.06.2020 Deposit Facility Rate (Jun)-0.50%
eu 04.06.2020 ECB Marginal Lending Facility0.25%
eu 04.06.2020 ECB Interest Rate Decision (Jun)0.00%
usa 10.06.2020 Fed Interest Rate Decision.
uk 18.06.2020 BoE Interest Rate Decision (Jun)0.10%

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