Market Insights 5 August 2020

Market Overview 

Gold quickly retraced $20 from fresh all-time highs of $2,031, as investors took profits off the 

table after the relentless rise. Despite the pullbacks, the path of least resistance is to the upside 

amid persistent downbeat tone seen around the US dollar. 

NZD/USD keeps its range near 0.6650 after dismal China’s Caixin Services PMI. The kiwi cheers a 

positive surprise delivered by New Zealand's employment data. US-China trade deal optimism 

also keeps the buoyant tone intact. 

The EUR/USD pair is trading uneventfully for a second consecutive day yet holding above the 

23.6% retracement of its July rally at 1.1735, with slides below the level quickly attracting 

buyers. The long-term perspective keeps favouring the upside, although, in the shorter-term, 

the bullish potential remains limited.  

The 4-hour chart shows that a flat 20 SMA kept capping gains, while technical indicators 

recovered from daily lows, but remain within negative levels. Lacking strength upwards. The 

dollar has a limited bullish potential, which means that the market will likely continue seeing 

dips as buying opportunities. 

EUR/USD

The EUR/USD pair is trading uneventfully for a second consecutive day yet holding above the 

23.6% retracement of its July rally at 1.1735, with slides below the level quickly attracting 

buyers. The long-term perspective keeps favouring the upside, although, in the shorter-term, 

the bullish potential remains limited.  

The 4-hour chart shows that a flat 20 SMA kept capping gains, while technical indicators 

recovered from daily lows, but remain within negative levels. Lacking strength upwards. The 

dollar has a limited bullish potential, which means that the market will likely continue seeing 

dips as buying opportunities. 

GBP/USD

The GBP/USD pair has made little progress since the latest update, pretty much unchanged for a 

third consecutive day. In the short-term picture, the risk remains skewed to the downside, as, in 

the 4-hour chart, the pair is trading below its 20 SMA, which loses bullish strength. 

The Momentum indicator, in the meantime, resumed its decline within negative levels, while the 

RSI has stabilized within neutral readings. The support is around 23.6% Fibonacci, which is 1.3015. 

USD/JPY 

The 4-hour chart for the USD/JPY pair shows that the pair remains below a bearish 100 SMA yet 

above a bullish 50 SMA, this last at around 105.50. 

Technical indicators in the mentioned timeframe have eased from daily highs, the Momentum 

heading lower but above its 100 level, as the RSI stabilizes around 48. Bulls will likely remain side-

lined as long as the pair holds below the 106.45 price zone, which has become a strong static 

resistance level. 

AUD/USD

An ascending trend line from June 30th joins 20 DMA to limit the AUD/USD pair’s short-term 

downside around 0.7090. Further support is near 0.7065. As a result, bulls keep targeting to 

refresh the multi-month high flashed in June, around 0.7225, while looking at 0.7200 as an 

immediate hurdle to cross. 

XAU/USD

The yellow metal broke through the resistance of the ascending triangle. While $2,000 offers 

immediate support. If gold price drops below the key support $1,988, further loss will be counted 

towards $1,980. 

However, bulls are less likely to leave the desks unless gold prices drop below the previous record 

of $1,921. As a result, $2,100 seems to be up on their radars.

XTIUSD

Higher low formation propels the commodity to attack the previous month’s high of $42.33 in 

search of February’s bottom surrounding $44.00. WTI had broken through the descending 

trendline starting from July 21st. On the contrary, $41.00 becomes near-term key support.