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Daily Market Outlook, June 11, 2020 

Daily Market Outlook, June 11, 2020 
Market participants initially cheered the fact that the US Federal Reserve voted unanimously to keep the federal funds target rate in a range of 0.00% to 0.25%. It also indicated no changes to the borrowing costs through 2022. The Fed also said it would keep buying bonds, targeting $80 billion a month in Treasuries and $40 billion in mortgage-backed securities. 
The Fed did not comment in its statement on whether it was likely to undertake yield curve control as part of its efforts to keep rates near zero for the next few years. However, Fed Chairman Jerome Powell said in a press conference that the US central bank reviewed yield curve control at the meeting, adding that its effectiveness was still an “open question”. Along with the rate decision, the Fed projected the economy will shrink 6.5% in 2020, a year that saw an unprecedented halting of business activity in an effort to combat the coronavirus pandemic. However, 2021 is expected to show a 5% gain followed by 3.5% in 2022. 
US equities ended a mixed bag as market participants evaluate the pace of economic recovery and COVID-19 developments. The Nasdaq Composite outperformed once again, rising 0.67% to post a record closing high of 10,020.35. However sentiment has deteriorated during the Asian session with the S&P losing 1.5% overnight
Yields on US Treasuries fell on Wednesday after the US Federal Reserve repeated its promise of continued extraordinary support for the economy and kept the size of its bond purchase program unchanged. The yield curve between 2-year and 10-year notes flattened to 57bps. 
The US dollar slumped to fresh three-month lows against the other major currencies after the US Federal Reserve made no policy changes, as expected, and pledged to continue its asset purchases aimed at stabilizing a US economy that has been ravaged by the COVID-19 pandemic. The USD has moved of its lows as equities gave up an initial positive reaction, concerns regarding second wave outbreaks in of COVID-19 in Texas and California are rattling markets this morning. 
Today’s Options Expiries for 10AM New York Cut (notable size in bold)
EURUSD: 1.1250 (900M), 1.1325-35 (1BLN), 1.1350 (650M) 1.1375 (230M), 1.1395-1.1400 (500M)
USDJPY: 106.95-107.00 (310M), 107.30 (230M), 107.45-60 (800M) 108.00 (430M
GBPUSD: 1.2500 (875M), 1.2520 (200M), 1.2560 (207M), 1.2695 (240M)
AUDUSD: 0.6800 (352M)
Technical & Trade Views
EURUSD Bias: Bullish above 1.1250 targeting 1.1420
From a technical and trading perspective, as 1.1250 acts as support bulls will look for a test of offers and stops at 1.14 before we likely see another round of profit taking. A closing breach of 1.1230 would suggest a broader corrective phase to test bids back towards 1.10 before the next leg higher. UPDATE potential for another test of 1.1250 bids before targeting the offers and stops above 1.14 UPDATE Target achieved, profit taking move overnight as 1.1260/80 supports bulls now target a retest of year to date highs offers and stops at 1.15

GBPUSD Bias: Bullish above 1.26 targeting 1.28
GBPUSD From a technical and trading perspective, as 1.26 supports on pull back look for a test of 1.28 descending trendline and the 78.6% retracement of the covid crisi decline, from here we could see a broader profit taking move and correction. On the day only a close back below 1.2575 would suggest the current cycle has completed. UPDATE Target achieved, profit taking move overnight, as 1.2650 support bulls will play for a test of 1.2850 daily descending trendline resistance where we may witness more substantial supply as the catalyst for a corrective phase to develop

USDJPY Bias: Bearish below 1.09 targeting 1.07
USDJPY From a technical and trading perspective, the topside breach of 108.50 delays downside objectives opening a retest of range resistance above 109, however as supply above 1.09 stems the upside look for a retest of buds back to 1.08 UPDATE the upside breach of 1.09 suggests range expansion with 110.70 the upside object as 1.09 supports UPDATE sharp rejection above 109.50 suggests a return to range trade and a retest of support back to 107 UPDATE target achieved as 108 caps upside attempts bears will play for a test of year to date lows to 106 

AUDUSD Bias: Bullish above .6900 targeting .7085)
AUDUSD From a technical and trading perspective,sustained price action above .6800 witnessed the grind higher persist opening a test of the psychological bit figure at .7000. From this initial foray above .7000 anticipate profit taking pullback to .6800 UPDATE target achieved as .6950 supports look for test of stops to .7050 UPDATE offers and stops towards .7100 look vulnerable, expect supply above .7100 to drive a test of bids back towards .6900

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