US stocks market fell sharply ahead of a key inflation report as investors worried about the overall US economy. The Dow Jones Industrial Average slid 1.94% while the S&P 500 fell 2.38%. And the Nasdaq Composite shed 2.75%, finishing with 11,754.23. Major technology companies struggled on Thursday as investors were concerned if the CPI figure still holds high, then the Fed has more reasons to be more aggressive on the rates. Meta Platform slid 6.4% and Amazon dropped more than 4% while Apple fell 3.6%.

Following the ECB meeting on Thursday, major European indices closed down lower as the ECB announced that it intends to increase the rates by 25 basis points at its meeting in July, and it expects to raise another one in September. In the meantime, the ECB downgraded its economic growth forecasts and upgraded and revised its inflationary projections.

Alibaba shares slid more than 8% on Thursday after its financial affiliate Ant Group mentioned it at the moment has no plan to IPO. However, according to Bloomberg, Chinese financial regulators have claimed that they have commenced early-stage discussions about reviving the IPO, meaning that the Chinese government has potentially given the green light for a listing.

Main Pairs Movement

USD/JPY climbed to a new 20- year high, heading toward 135.00. The Japanese Yen continued to depreciate against the greenback as the Bank of Japan defies global trends and keeps its monetary policy loose.

Gold was down 0.29% as the market mood turned firmly on the ECB monetary policy decision. Despite the ECB keeping its rates unchanged as expected, gold turned downside following the news that the hike will possibly happen in July and September.

EUR/USD was once hitting 1.07737 but wrapped up with nearly 1% lower, 1.06147. After the ECB meeting, the 25 basis point increments in July seemed to shift the ECB’s stance from a hawkish decision to a dovish one, thus dragging the euro dollar down against the greenback.

 
Technical Analysis

EURUSD (4-Hour Chart)

EURUSD experienced strong volatility as the ECB announced its monetary plans for the rest of the year. Thursday’s ECB conference saw a shift towards a hawkish ECB, the council has announced that it intends to raise its key interest rates by 25 basis points at the July meeting; furthermore, the central bank sees further interest rate increases in order to keep pace with its 2% medium-term target. The Eurozone has experienced soaring inflation as multiple constituents turned in a higher than 8% CPI increase for the month of May. During their press conference, the ECB also projected a slower growth of the economy as supply chain issues and geopolitical concerns still loom large across the European region.

The Euro soared at the initial announcement of an interest rate hike, but the Euro soon lost steam and entered a sharp spiral as the ECB announced gloomy forward guidance. RSI for the pair is indicating 48.07, as of writing. On the four hour chart, EURUSD is trading below its 50, 100, and 200 days SMA.

Resistance: 1.07691

Support: 1.06477

GBPUSD (4-Hour Chart)

The British Pound traded lower against the U.S. Dollar over the course of Thursday’s trading. The strong Dollar was assisted by the soaring short term treasury yield, which has once again traded past the key 3% level. Market participants continue to price in further interest rate hikes by the Fed as they await the key May CPI data, which will be released during the American trading session tomorrow. On the other hand, the U.K. Gilt broke above 2.3%, but the BoE could be stuck between a rock and a hard place as the British economy has slowed significantly since the previous rate hike.

On the technical side, Cable has been consolidating around the 1.25 price region for the past two weeks. The narrowing credit spread has delivered a relatively calm environment for Cable. Near term resistance at the 1.259 price region remains strong. RSI for Cable sits at 47.44, as of writing. On the four hour chart, Cable is trading below its 50, 100 and 200 day SMA.

Resistance: 1.25691, 1.26539

Support: 1.24539

USDJPY (4-Hour Chart)

USDJPY traded mostly sideways around the 134 price region for Thursday. Despite the rising U.S. 10 year treasury yield, Yen bulls have found their footing and defended the Yen from slipping further. However, as interest rates between the two countries continue to widen as the year progresses, USDJPY could rise further still. Market participants will focus on the U.S. May CPI data set to be released during the American trading session today.

On the technical side, USDJPY continues to trade higher into the historical territory. Near term, resistance exists around the 134.56 price region, while support levels could be found along the 132.5 price region and the 133.5 price region. RSI for the pair sits at 71.98, slightly above overbought territory. On the four hour chart, USDJPY is trading above its 50, 100, and 200 days SMA.

Resistance: 134.56

Support: 133.5, 132.5

Economic Data

Dear Client,

Warmly reminds you that the component stocks in the stock index spot generate dividends. When dividends are distributed, VT Markets will make dividends and deductions for the clients who hold the trading products after the close of the day before the ex-dividend date.

Indices dividends will not be paid/charged as an inclusion along with the swap component. It will be executed separately through a balance statement directly to your trading account, the comment for which will be in the following format “Div & Product Name & Net Volume ”.

Please note the specific adjustments as follows:

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US equities edged lower on Wednesday amid the concern of inflationary pressure and the rising US Treasury yields. The Dow Jones Industrial Average dipped 0.81%, 270 points. The Nasdaq Composite shed 0.73% while the S&P 500 dropped 1.08% to end at 4,115.77. Markets continued to monitor the signs of slowing economic growth ahead of the CPI reading later this week. In the meantime, the soaring price of crude oil prices also weighed on the negative movement of the US equities markets; oil prices reached a 13- week high on Wednesday. According to some analysts, if prices continued to climb, that could lead to demand destruction, potentially turning into a recession period as consumers pull back on their spending.

Twitter schedules to hold a shareholder vote on Elon Musk’s acquisition deal in early August. According to Twitter, it continues to share information with Elon Musk; as a result, Twitter might plan to furnish its licensing business like a package to Musk as part of the information exchange. However, Musk’s lawyers have warned Twitter that Musk might walk away from the acquisition if Twitter fails to provide the data that Elon Musk seeks on those fake accounts on Twitter.

Main Pairs Movement

EUR/USD hovered near 1.0710 ahead of the ECB meeting. The ECB is set to announce the end of its stimulus program. Regarding the interest rates, the European policymakers and the ECB President Christine Lagarde seem to have diverging comments, which the former has been hinting at a 50-basis point rate hike, but the latter inclines toward a conservative 25-basis point rate hike.

USD/JPY again traded higher, up 1.24%, heading toward 135.00. The Japanese Yen continued to weaken as investors recalled that the BOJ has promised to do unlimited bond purchases.

Spot gold turned slightly upside, up 0.05% at 1853.86 on Wednesday. The US dollar swung alongside the market sentiment and bond yields. Further price actions eye on the CPI announcement this Friday.

WTI recovered back above the 120.00 level following the US inventory report. Despite the API indicating that it rose its output last week, the data still showed a decline in gasoline inventories.

 
Technical Analysis

EURUSD (4-Hour Chart)

EURUSD rose ahead of the ECB interest rate decision. Despite the rising U.S. 10 year treasury yield, the Dollar remains weak amidst growing concerns in the U.S. EU GDP for the first quarter of the year was upwardly revised to 0.6%, quarter over quarter, thus buoying the shared currency. Market participants will be focused on the ECB interest rate decision, which will be coming in during the European trading session. The ECB is not expected to raise interest rates, but some analysts are predicting an end to the negative interest rate environment by the end of the year.

On the technical side, EURUSD still trades below our estimated resistance level at 1.07614, but support levels at 1.0695 were successfully defended by yesterday’s market close. RSI for the pair currently sits at 54.87. On the four hour chart, EURUSD currently trades above its 50, 100, and 200 days SMA.

Resistance: 1.07614, 1.07864

Support: 1.0695, 1.06816

GBPUSD (4-Hour Chart)

GBPUSD lost its two-day winning streak and is heading lower once again, despite a broad-based Dollar weakness. The economic outlook for the U.K. remains gloomy as inflation and rising interest rates continue to bite into upward momentum. The BoE finds itself in a precarious position as further interest rate hikes to tame inflation could disproportionately hurt U.K.’s economic growth. The Fed, on the other hand, still has tightening power as the U.S. economy remains robust.

On the technical side, Cable still faces its near term resistance level at 1.25691. The support level for Cable remains around the 1.2453 price region, but that level is weak as Cable dipped below the 1.245 level during yesterday’s trading but was able to close above. RSI for the pair sits at 49.07, as of writing. On the four hour chart, Cable currently trades below its 50, 100, and 200 days SMA.

Resistance: 1.25691, 1.26539

Support: 1.24539

USDJPY (4-Hour Chart)

USDJPY has continued to soar, even though the Dollar has lost steam during Wednesday’s trading. The Japanese Yen continues to fall against the U.S. Greenback as the BoJ insists on defending its near-zero target for the 10-year yields. The falling exchange rate, however, could be a positive sign for Japan as the country begins to open its borders to tourists. The Japanese export and tourism-focused economy could benefit from a revived tourism scene and an easing supply chain as China winds down its Covid lockdown policies.

On the technical side, USDJPY has broken above our estimated resistance level at 133 and is marching towards record highs. Near term, resistance is projected to be around the 135 price region while support levels at 130 remain firm. RSI for the pair sits at 75.56, as of writing. On the four hour chart, USDJPY currently trades well above its 50, 100, and 200 days SMA.

Resistance: 133

Support: 130

Economic Data

US equities edged higher despite the retail giant, Target issuing a warning about its current quarter’s profits, pressuring the broader retail sector. The Dow Jones Industrial Average was up 0.8%. The S&P 500 rose 0.95% while the Nasdaq Composite climbed 0.94%. The three major indices opened solidly lower but turned positive as the day progressed following the decline of bond yields. Major retailers have delivered their mixed earning reports, adding some volatility to the equities market. The mixed reports signalled the potential recession or a rapid change in consumer spending.

A widely followed Federal Reserve member has started indicating that the US economy could be headed for a second successive quarter of negative growth, meeting a rule-of-thumb definition for a so-called recession. According to Fed’s GDPNow tracker, it shows an annualized gain of 0.9% for the second quarter, down from an estimated 1.3%.

Following Apple’s WWDC22, Apple is turning into a fintech company, not just focusing on devices and software, but now shifting to a new payment system. Apple announced several new features for its wallet at its developer’s conference on Monday, directly competing with other fintech companies, including PayPal and Affirm.

Main Pairs Movement

USD/JPY continued to edge higher toward 133.00, climbing a third consecutive day. The Japanese Yen stayed offered despite Japan’s GDP being better than expected. The divergence of the monetary policies between the Fed and the BOJ remained weighing on the currency pair.

WTI extended its consolidation toward the 118.00 level amid concerns about the oil supply. At the same time, oil prices witnessed a strong upside movement to the expectation of a demand recovery in China. On the supply side, the American Petroleum Institute has agreed to increase the supply by 1.845 million barrels, but it seemed to do minimal impact on the oil prices as the boost of the oil supply was still far to offset the supply gap from Russia.

AUD/USD climbed 0.54% on Tuesday following the monetary decision from RBA, lifting the rate by 0.50%, higher than expected. The RBA pointed out that inflation in Australia has surged significantly, and the RBA was needed to tackle the inflationary pressure by being more aggressive on the rates.

Technical Analysis

EURUSD (4-Hour Chart)

EURUSD fell from the start of the trading day, but the pair was able to pair losses once the American trading session began. A weaker Dollar and an overall risk-averse sentiment aided the Euro to end its third consecutive losing day against the U.S. Greenback. The ECB is set to convene on Thursday and announce its monetary policy decision.

On the technical side, EURUSD has been trading around a tight range between 1.06384 and 1.07864 for the past couple of weeks. The pair’s near-term support levels remain at 1.0695 and 1.06816, while resistance levels at 1.07864 stand firm. RSI for the pair sits at 53.46, as of writing. On the four hour chart, EURUSD is trading below its 50 day SMA, but above its 100 and 200 day SMA.

Resistance: 1.07614, 1.07864

Support: 1.0695, 1.06816

GBPUSD (4-Hour Chart)

The British Pound surged as the U.S. Greenback lost demand. Britain’s Prime Minister Borris Johnson survived the vote of no confidence, by a small margin. U.K.’s services PMI printed 53.4 for May, marking the largest one-month decline for the year; furthermore, as the U.S. 10 year treasury yield retreated below 3%, the Pound gained further traction.

On the technical side, GBPUSD has broken through our previously estimated resistance level at 1.25691, but the 1.26539 resistance level remains unchallenged. The support level at 1.24539 remains firm. RSI for Cable sits at 58.46, as of writing. On the four hour chart, Cable currently trades above its 50, 100, and 200 days SMA.

Resistance: 1.25691, 1.26539

Support: 1.24539

USDJPY (4-Hour Chart)

USDJPY stalled out as the pair neared the 133 price region. Broad-based dollar weakness allowed the Japanese Yen some breathing room on Tuesday’s trading; however, the downside for the Japanese Yen still seems abundant, due to the BoJ’s easy policy stance. On the economic docket, Japan is set to release its quarterly GDP early in the Asia trading session on the 8th.

On the technical side, USDJPY has met its near term resistance at the 133 price region, while the near term support level at 130 sits firmly. RSI for the pair is indicating 77.16, as of writing. On the four hour chart, USDJPY is currently trading above its 50, 100, and 200 days SMA.

Resistance: 133

Support: 130

Economic Data

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US markets moved slightly higher on Monday as investors tried to rebound from a losing week. The Nasdaq Composite rose 0.40% while the S&P 500 was up 0.31%: the Dow Jones Industrial Average was once up as high as 300 points, but gave up some of its gains following the benchmark 10- year treasury yield pushed above 3%, finishing with 0.1% at the end of the day. One of the major boosts from the equities markets was the news that Beijing, China rolled back some Covid- related restrictions; at the same time, Chinese regulators are in the process to wrap up their investigations into the ride-hailing giant Didi.

The UK Prime Minister Boris Johnson faced a vote of confidence on Monday. Johnson’s leadership has been wracked and doubted by several controversies, the biggest of which has been the party gate scandal when Johnson and other officials broke its Covid lockdown restriction. Despite Boris Johnson eventually surviving the vote, 211 lawmakers voted in favour of Johnson and 148 lawmakers voted against him, the call of growing discontent has truly impacted Johnson’s public standing.

Main Pairs Movement

Gold was down 0.48% on Monday as the US dollar was feeling the pull of gravity, which kept the downside in the precious metal. To add, most of the European markets were on a holiday, gold’s downside mainly came from the pressure of the US dollar.

USD/JPY portrayed a new high, above 131.00, as Japan’s easing monetary policy continued to weaken the Japanese Yen. On the flip side, the Fed Vice-Chair Lael Brainard and Cleveland Fed President Mester repeated the statements which suggested higher odds favouring raising interest rates.

AUD/USD hovered around 0.7200 as markets awaited RBA policy on early Tuesday, and was down 0.21% at the end of the day.

Crude oil prices edged lower on Monday, buoyed by Saudi Arabia possibly raising its oil prices in July, but a higher output from OPEC+ weighed on the downside of oil prices. WTI was down 0.51%, trading at 117.689 at the end of the day.

 
Technical Analysis

EURUSD (4-Hour Chart)

The Euro fared worse against the U.S. Dollar on the first trading day of the week. Market participants demanded the U.S. Greenback, which rose more than 0.3% after the American trading session began. The shared currency continues to trend upwards in the long term, but significant economic headwinds and a slow to react central bank pose long term upside limits to the EURUSD pair. Market participants will be focused on Thursday as the ECB is set t announce its monetary policy statement.

On the technical side, the resistance at 1.07614 remains unchallenged while support levels at 1.0695 and 1.06816 sit firm. RSI for the pair sits at 53.34, as of writing. On the four hour chart, EURUSD currently trades below its 50 day SMA, but above its 100 and 200 day SMA.

Resistance: 1.07614, 1.07864

Support: 1.0695, 1.06816

GBPUSD (4-Hour Chart)

The British Pound traded lower against the dollar on the first trading day of the week. Dollar demand surged as the U.S. 10 year treasury yield soared past 3%. Despite an upward equities market, market participants rotated into the U.S. Greenback to take advantage of rising yields. On the 7th, the U.K. is set for a vote of no confidence for prime minister Borris Johnson.

On the technical side, resistance for Cable sits firmly at the 1.25691 and 1.26539 price region, while the support level at 1.24539 remains intact. RSI for the pair sits at 47.27, as of writing. On the four hour chart, Cable currently trades below its 50 days SMA but above its 100 and 200 day SMA.

Resistance: 1.25691, 1.26539

Support: 1.24539

USDJPY (4-Hour Chart)

The U.S. Greenback surged against the Japanese Yen on the first trading day of the week. Broad-based demand for the Dollar resulted from the surging U.S. 10 year treasury yield. The better than expected job report from last Friday provided much tailwind for the U.S. Dollar. The BoJ remains its long term easy money stance to prop up its export friendly economy; on the other hand, the Fed is set to raise at least 100 basis points more by the end of the year. Interest rate differentials between the two countries continue to favour Dollar bulls.

On the technical side, USDJPY reached its historical high on the first trading day of the week and is continuing higher into the American trading session. The support level for USDJPY sits at 129.795 and 126.738, while resistance levels have yet to form. RSI for the pair sits at 52.99, as of writing. On the four hour chart, USDJPY currently trades well above its 50, 100, and 200 days SMA.

Resistance: 133

Support: 129.795, 129.738

Economic Data

Dear Client,

To provide a more favorable trading environment to our clients, VT Markets will modify the leverage of the following products:

1. The leverage of BATUSD, IOTUSD, TRXUSD, ZECUSD, ALGUSD, FILUSD, MKRUSD, SHBUSD, AVAUSD and NEOUSD will be 50:1.

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Dear Client,

Warmly reminds you that the component stocks in the stock index spot generate dividends. When dividends are distributed, VT Markets will make dividends and deductions for the clients who hold the trading products after the close of the day before the ex-dividend date.

Indices dividends will not be paid/charged as an inclusion along with the swap component. It will be executed separately through a balance statement directly to your trading account, the comment for which will be in the following format “Div & Product Name & Net Volume ”.

Please note the specific adjustments as follows:

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US equities resumed on Friday amid the fears of an economic slowdown and soaring pace of inflation, despite the US economy adding 390,000 jobs in May, better than expected, by 328,000. The Nasdaq Composite slumped 2.67% while the Dow Jones Industrial Averages dropped 1.05%. The S&P 500 declined 1.67% to end the week, tipping the benchmark index into negative territory for the eighth week. The risk sentiment occurred after May hiring economic data. A better-than-expected hiring data suggested that the US labour market remains robust enough for the US Fed to continuously raise interest rates quickly in response to the roaring inflation.

Shares of Tesla fell following the news from Elon Musk that commented on cutting its employment by around 10%. Tesla’s stock price plunged around 20% since the news of acquiring Twitter Inc. At the same time, anxiety about the global market from China also weighed on the company, which has weathered worldwide supply shortages. Tesla has EV factories in the US, Berlin, and China; culling 10% of jobs could equate to losing nearly 10,000 people as Tesla has roughly 100,000 staff worldwide. The move from Tesla could be a caution and a challenge for the economy.

Main Pairs Movement

WTI held near Thursday’s high on Friday despite OPEC+ making a surprising decision, planning to boost output for July and August by 50%, likely a response to US pressure. However, crude oil prices held steadily high as the extra barrels probably still cannot offset Russian supply gaps. Beyond the immediate term, any further spending on OPEC+ spare capacity might suggest an upside for crude oil.

Gold declined nearly 1% on Friday after better- than- expected US labour report. A robust US employment in May suggested that the economy remains to power forward; with that being said, the US Fed has enough reasons to tackle the soaring inflation by raising interest rates.

USD/JPY extended rebound, heading toward 131.00. The Japanese Yen weakened as the Bank of Japan’s Kuroda reiterated his strong support for easing policy with Japan’s PMI came in firmer. At the end of the day, USD/JPY closed at 130.816, reversing the pullback from the three-weeks top.

Technical Analysis

EURUSD (4-Hour Chart)

The EUR/USD pair consolidated on Friday, ending its previous rally and retreated from the 1.076 level after the release of the upbeat US Non-farm Payrolls report. The pair were flirting with the 1.074~1.076 area during the first half of the day, then lost its upside traction and dropped to a daily low below the 1.071 level in the late European session. The pair is now trading at 1.0744, posting a 0.01% loss daily. EUR/USD stays in the negative territory amid a stronger US dollar across the board, as the US Non-farm Payrolls rise by 390K in May and beat the market’s expectations of a 325K rise. The better-than-expected job data has provided some support to the greenback and dragged EUR/USD pair lower. For the Euro, the expectations for potential rate hikes by the ECB might limit the losses for the pair, as ECB policymaker Francois Villeroy de Galhau said on Thursday that normalization of the ECB policy is required.

For the technical aspect, the RSI indicator is 53 figures as of writing, suggesting that the upside is more favoured as the RSI stays above the mid-line. As for the Bollinger Bands, the price regained some upside strength after touching the moving average, therefore the upside traction should persist. In conclusion, we think the market will be slightly bullish as long as the 1.071 support line holds. On the downside, a break below the aforementioned support will confirm the bearish shift in the near term.

Resistance: 1.0786, 1.0846, 1.0921

Support: 1.0710, 1.0680, 1.0639

GBPUSD (4-Hour Chart)

The pair GBP/USD edged lower on Friday, remaining under pressure and extended its daily losses amid holiday-thinned trade and the release of key US jobs data. The pair was trading flat during the Asian session and started to see fresh selling in the mid-European session, then rebounded back slightly to recover some of its intra-day losses. At the time of writing, the cable stays in negative territory with a 0.46% loss for the day. Renewed US dollar strength continued to weigh on GBP/USD pair during the second day of market closures in the UK, as a 390K increase in Nonfarm Payrolls report marked another robust labour market outcome in the US in May. For the British pound, the expectations for the Fed to be far more hawkish than the BoE and the worsening UK economic outlook might continue to exert bearish pressure on the cable. The BOE is expected to continue elevating its interest rates aggressively to contain inflation.

For the technical aspect, the RSI indicator is 41 figures as of writing, suggesting that the pair is surrounded by bearish momentum as the RSI keeps heading south. For the Bollinger Bands, the price preserved its downside traction and cross below the moving average, indicating that a continuation of the downside trend could be expected. In conclusion, we think the market will be bearish as long as the 1.2579 resistance line holds. The falling RSI also reflects bear signals.

Resistance: 1.2579, 1.2660, 1.2761

Support: 1.2470, 1.2341, 1.2180

USDCAD (4-Hour Chart)

As the US Nonfarm Payrolls data showed that the US economy added 390K new jobs in May on Friday, the pair USD/CAD attracted some buying and extended its recovery toward the 1.2600 mark. The pair were flirting with the 1.256~1.258 area for most of the day and dropped to a daily low below the 1.2550 level, then rebounded back to erase all of its daily losses. USD/CAD is trading at 1.2576 at the time of writing, rising 0.05% daily. Investors expect that the US Federal Reserve will tighten its policy aggressively after the release of the better-than-expected US NFP report. The upbeat data showed that the US economy was not in a recession in the spring. On top of that, the surging crude oil prices also failed to exert bearish pressure on the USD/CAD pair despite WTI having rebounded back to the $119 per barrel area. OPEC+’s announcement of increasing output quotas by a larger 648K barrel per day seems not to deter the bulls.

For the technical aspect, the RSI indicator is 33 figures as of writing, suggesting that the pair remained under bearish momentum as the RSI stays near the oversold zone. For the Bollinger Bands, the price is struggling to climb higher after rebounding slightly from the lower band, therefore the downside traction should persist. In conclusion, we think the market will be bearish as the pair might head to re-test the 1.2562 support. A break below that support might favour the bears and open the road for additional losses.

Resistance: 1.2618, 1.2670, 1.2746

Support: 1.2562, 1.2529, 1.2473

U.S. equities markets rebounded on Thursday. The Dow Jones Industrial Average rose 1.33% to close at 33248.28. The S&P 500 gained 1.84% to close at 4176.82. The Nasdaq composite rallied 2.69% to close at 12316.9. Before markets opened, Microsoft warned that revenue and earnings would come in below analyst estimates, thus sending bearing shockwaves throughout markets; however, equities were able to shake off the bearish outlook and end higher by market close. The ADP non-farm payrolls came in at 128,000 for May, missing estimates of 299,000. Market participants will now focus on the unemployment rate and non-farm payrolls both scheduled to release on Friday.

The benchmark U.S. 10 year treasury yield currently sits at 2.919%.

The technology sector has enjoyed multi-weeks of gains as valuations for tech giants have corrected significantly since the start of the year. Despite Microsofts ominous warning yesterday, shares of Nvidia popped 6.9%, Tesla added 4.7%, and Meta rose 5.4% as well. FAANG stocks remain vulnerable to large volatility in the short term, but share prices of these tech giants are pricing in the interest rate hikes for the year and seem to have found demand in the relatively low prices for the past couple of weeks.

Main Pairs Movement

The Dollar index slumped 0.78% throughout Thursday’s trading. The ADP non-farm payroll showed the second straight month of slow down in hiring in the private sector. Growth fears pressured the Dollar against other major foreign currencies.

EURUSD rose 0.94% over the previous trading day. The pair bounded off strongly from the newfound support level at around the 1.064 price region. Broad-based dollar weakness allowed the Euro to gain back losses from the Asia and European trading sessions.

GBPUSD rose 0.73% throughout yesterday’s trading. The cable advanced as the dollar sold off. Britain’s growth concerns, however, continue to pose a threat to Cable’s upside potential.

USDCAD fell 0.69% throughout yesterday’s trading. OPEC’s meeting concluded with the cartel agreeing to raise output and exclude Russia from its trading agreements; however, the meeting sent oil prices soaring. The commodity-linked Canadian Loonie enjoyed a boost as the WTI shot back up to $116 per barrel.

Technical Analysis

EURUSD (4-Hour Chart)

The EUR/USD pair advanced on Thursday, recovering from weekly lows that touched yesterday and managed to hold in positive territory after the release of US job data. The pair were flirting with the 1.064~1.066 area during the first half of the day, then started to witness fresh buying to refresh its daily high heading into the US session. The pair is now trading at 1.0736, posting a 0.84% gain daily. EUR/USD stays in the positive territory amid renewed US dollar weakness, as the worse than anticipated US ADP Nonfarm Employment data exerted bearish pressure on the US dollar. The data showed that private-sector employment rises by 128K in May, which was below expectations for a 300K rise. For the Euro, the hawkish ECB has been a key factor supporting EUR/USD in recent weeks, as investors expect a 50 bps rate hike from the ECB at its July meeting due to hot Eurozone inflation.

For the technical aspect, the RSI indicator is 55 figures as of writing, suggesting that the upside is more favoured as the RSI stays above the mid-line. As for the Bollinger Bands, the price preserved its upside strength and crossed above the moving average, therefore a continuation of the upside trend could be expected. In conclusion, we think the market will be bullish as the pair is heading to test the 1.0736 resistance. A sustained strength above that level will favour the bulls and confirm the bullish shift in the near term.

Resistance: 1.0736, 1.0789, 1.0846

Support: 1.0639, 1.0549, 1.0464

GBPUSD (4-Hour Chart)

The pair GBP/USD edged higher on Thursday, ending its previous slide and extending its rebound toward the 1.256 area as US yields retreat amid mixed US jobs data today. The pair was trading flat during the Asian session and touched a daily high near the 1.257 level in the European session, then retreated slightly to erase some of its daily gains. At the time of writing, the cable stays in positive territory with a 0.62% gain for the day. Despite the downbeat ADP Employment Change report weighing on the US dollar and pushing the GBP/USD pair higher, the cautious market mood is limiting the cable’s upside for the time being. For the British pound, the worsening UK economic outlook and divergence in Fed/BoE monetary policy will continue to act as a headwind for the cable, as Bank of England Deputy Governor Jon Cunliffe said that the UK economy is expected to slow quite a lot over the next year.

For the technical aspect, the RSI indicator is 48 figures as of writing, suggesting that the pair have a difficult time gathering bullish momentum as the RSI has lost its upward strength within harmful levels. For the Bollinger Bands, the price failed to cross above the moving average, indicating that a trend reversal could be expected for the pair. In conclusion, we think the market will be slightly bearish as long as the 1.2588 resistance line holds. On the downside, GBP/USD could extend its slide toward 1.2341 if the pair breaks below the 1.2470 support and starts using that level as resistance.

Resistance: 1.2588, 1.2659, 1.2761

Support: 1.2470, 1.2341, 1.2270

USDCAD (4-Hour Chart)

As the US ADP Employment Change for May came in weaker than expected and dragged the US dollar down on Thursday, the pair USD/CAD remained under bearish pressure and meanwhile tumbled to six-week lows under the 1.2600 area. The pair edged higher to a daily high in the late Asian session, but then started to see heavy selling and extended its intra-day losses toward the 1.2580 level. USD/CAD is trading at 1.2571 at the time of writing, losing 0.68% daily. The hawkish comments by Bank of Canada Deputy Governor Paul Beaudry also supported the loonie, as he said that the BoC may need to raise its policy interest rate to 3% or higher. On top of that, the surging crude oil prices also underpinned the commodity-linked loonie and dragged the USD/CAD pair lower as WTI has rebounded back to the $117 per barrel area. The latest news reported that the OPEC+ has agreed to lift output by 648K barrels per day in both July and August.

For the technical aspect, the RSI indicator is 28 figures as of writing, suggesting that the pair faces heavy bearish pressure as the RSI reaches the oversold zone. For the Bollinger Bands, the price moved out of the lower band so a strong downside trend continuation could be expected. In conclusion, we think the market will be bearish as the pair is testing the 1.2580 support. A break below that support might favour the bears and open the road for additional losses.

Resistance: 1.2679, 1.2746

Support: 1.2580, 1.2541, 1.2473

Economic Data