Weekly Outlook 1st June to 6th June 2020

Weekly Outlook 1st June to 6th June 2020

31 May 2020 02:01 PM
 

USD/INR- In India, easing up restrictions can be beneficial for the currency, as it will boost the sentiment. Rumors about Alphabet looking to buy about a 5% stake in Vodafone Idea. If Google is successful in striking the deal with Vodafone Idea, it will put itself against Facebook, which has picked up a stake in Jio Platforms. Such inflows will benefit INR.  A decrease in the impact of coronavirus will boost sentiment and push the dollar down, while if COVID-19 situation gets worse, the greenback may find a demand for its safe-haven status.

INR

Date

Time

Event

Forecast

Previous

5th June, 2020

17:00

FX Reserves (USD)

 

490.04B

USD

Date

Time

Event

Forecast

Previous

1st June, 2020

19:30

ISM Manufacturing PMI (May)

43.0

41.5

3rd June, 2020

17:45

ADP Nonfarm Employment Change

-9,000K

-20,236K

3rd June, 2020

19:30

ISM Non Manufacturing PMI (May)

44.0

41.8

3rd June, 2020

20:00

Crude Oil Inventories

 

7.928M

4th June, 2020

18:00

Initial Jobless Claims

 

2,123K

5th June, 2020

18:00

Nonfarm Payrolls (May)

-8,250K

-20,500K

5th June, 2020

18:00

Unemployment Rate (May)

19.7%

14.7%

Technical Outlook –The relative strength index (14) is at 49.321 which is neutral. Strong resistance is seen near 76.00, which has been tested for a month. The 34-day SMA is in line with the resistance level. The support level is near 75.6. The 55-day SMA is approaching the support. A build-up for something bigger can be seen as prices can be seen converging. The down gap from 76.62 to 76.357 and 75.20 to 75.67 up gap are partially closed. Although, the down gap from 76.13 to 75.99 is yet to close. MACD shows that USDINR price may increase- leading to rupee depreciation.

EUR/USD-Improving statistics of COVID-19 figures in Italy and Spain, the continent's hardest-hit countries, which are also moving faster with returning to normal. Next week, a new month is brings easing of restrictions in several countries and plan to recover from any setbacks. Purchasing Managers’ Index figures are expected to confirm recovery. The main event scheduled is the European Central Bank's rate decision. European Commission’s proposed €750 billion (about $826 billion) stimulus package boosted market sentiment. Although, the package is yet to be approved by EU member states. The International Monetary Fund is also looking into it.

EUR

Date

Time

Event

Forecast

Previous

1st June, 2020

13:25

German Manufacturing PMI (May)

36.8

34.5

3rd June, 2020

13:25

German Unemployment Change (May)

195K

373K

4th June, 2020

17:15

Deposit Facility Rate (Jun)

-0.50%

-0.50%

4th June, 2020

17:15

ECB Marginal Lending Facility

 

0.25%

4th June, 2020

17:15

ECB Interest Rate Decision (Jun)

0.00%

0.00%

Technical Outlook –Strong resistance near 1.115 is yet to be breached. Steady support can be seen at 1.0835. Widening Bollinger Bands show an increase in EUR volatility. EUR/USD price shot up after breaking weeks of consolidation. It is a significant development. The pair is expected to be bullish if it breaches the resistance. The RSI (14) lies at 66.2 which is inching towards the overbought territory.

GBP/USD- The deadline for prolonging the Brexit implementation period past the year-end is here. Despite UK’s repeated attempts to object, passing the June 2 deadline without positive thinking for an agreement may burden the pound. The UK financial schedule stays light, with Markit's last Purchasing Managers' Indexes for May set to affirm pitifully, yet improving monetary movement. GfK's Consumer Confidence figure will probably stay negative.

GBP

Date

Time

Event

Forecast

Previous

1st June, 2020

14:00

Manufacturing PMI (May)

 

40.6

3rd June, 2020

14:00

Composite PMI (May)

12.9

28.9

3rd June, 2020

14:00

Services PMI (May)

 

27.8

4th June, 2020

14:00

Construction PMI (May)

22.0

8.2

Technical Outlook –The Pound tested it’s 50-day EMA, if it breaks that resistance, we can see a move towards 1.25 levels. The currency has continued to consolidate with support at 1.20 and resistance at 1.23. The Bollinger bands which have been indicating reduced volatility might widen next week due to Brexit chatter and a weakening can be expected.

USD/JPY-It's a generally light week ahead on the economic calendar front. In the first 50% of the week, May's concluded private segment PMIs are expected out. Any descending corrections would test support for the Yen in front of April Household Spending figures on Friday. We're not anticipating something besides more decrease in spending. Japan was under a highly sensitive situation in April. The Japanese Yen finished the week somewhere around 0.18% higher to ¥107.83 against the U.S Dollar.

JPY

Date

Time

Event

Forecast

Previous

3rd June, 2020

06:00

Services PMI (May)

 

21.5

5th June, 2020

05:00

Household Spending (YoY) (Apr)

-6.7%

-6.0%

Technical Outlook –The dollar has been oscillating in a tight range against the yen, hovering around at 107. The support is at 105 and resistance at 109. A build-up for something bigger can be seen as we are approaching a price convergence. The RSI also has been neutral for a while.