Please be advised of the upcoming AMAZON.COM INC (AMAZON) stock split that is going to take place as per the following schedule:
Ex-Date: June 6th, 2022. Common shares will trade at the new split-adjusted price.
Important implications of the AMAZON Stock Split:
1. The quantity of shares of each client’s position will multiply by 20.
2. Post-split, the “open price” and “take profit / stop loss” of each position will be adjusted, which will be the original price divided by 20.
3. The estimated post-split price may be 1/20 of the EOD price on 3rd, June.
4. All pending orders at the time of the split (Buy Limit, Sell Limit, Buy Stop, Sell Stop, Buy Stop Limit, Sell Stop Limit) will be cancelled.
5. All AMAZON holding positions and pending orders on DEMO account will be closed as a result of the stock split.
Q. What is a stock split?
A. A stock split is a corporate action taken by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector, to divide their existing shares into two or more shares.
Q. Why do stocks split?
A. The primary motive is to make the shares more affordable to small investors even though the underlying value of the company has not changed. Amazon would like its stock to be more accessible to a broader base of investors.
Q. What is the split ratio?
A. Amazon also announced it will split its stock in a 20 for 1 offering.
Q. What will this split mean to investors?
A. Each share of AMAZON stock that an investor owns before Ex-Date (June 6th, 2022) will be eligible for stock split. Investors will receive nineteen additional shares and the stock price will be 1/20.
Here is an example:
If an investor owns 100 shares and the market price is $2,400, $2,440 as take profit. After 20 for 1 stock split, the investor will own 100*20= 2,000 shares and the estimated post-split price would be $2400/20 = $120, and the take profit price will adjust to $2,440/20=$122.
Q. Does the 20 for 1 stock split mean the value of my AMAZON shares will increase nineteen times?
A. Unfortunately, not. As stated in the above example, the increase in the number of stocks means every share is now worth less than its previous value, precisely, it’ll be 1/20th the previous value.
Q. How do stock splits affect short sellers?
A. Stock splits do not affect short sellers in a material way. There are some changes that occur as a result of a split that affects the short position, but they don’t affect the value of the short position(s).
If you have any questions, our team will be happy to answer your questions. Please mail to [email protected] or contact the service online.
U.S. stocks fell on the first day of June after JPMorgan Chase President Jamie Dimon warned sharply of the impact of Hurricane Sandy on the U.S. economy. The S&P 500 was down 0.7%, the Dow Jones was down 0.5% and the Nasdaq was down 0.7% on Wednesday.
After rebounding in the trading session, the major stock indexes slipped after solid U.S. manufacturing data and comments from Dimon at an investment conference. According to the Institute for Supply Management, manufacturing in the U.S. grew faster than expected in May, which suggests that the economy may not be as weak as many people believe.
In early March, as the US and its allies unleashed a wave of sanctions on Russia, President Joe Biden stood in the White House and said they wanted to deal a “powerful blow to Putin’s war machine.”
But as the war in Ukraine approaches its 100th day, that machine is still very much operational. Russia is being propelled by a flood of cash that could average $800 million a day this year — and that’s just what the commodity superpower is raking in from oil and gas.
For years, Russia has acted as a vast commodity supermarket selling what an insatiable world has needed: Not just energy, but wheat, nickel, aluminium and palladium too. The invasion of Ukraine has pushed the US and the European Union to rethink this relationship. It’s taking time, though the EU took a further step this week by hammering out a compromise agreement on Russian oil imports.
Main Pairs Movement
The focus remains on inflation and growth, and whether policymakers will continue to tighten monetary policy. On Wednesday, the Bank of Canada raised interest rates by 50 basis points to 1.5%. The policymakers said that they are prepared to take stronger action if needed to achieve the 2% inflation target.
The US ISM Manufacturing Purchasing Managers’ Index rose to 56.1 in May, exceeding expectations. The unexpected spike in activity boosted the dollar and reduced demand for U.S. Treasury. However, yields also rose amid lingering inflation concerns and interest rate hike speculation, with the 10-year U.S. Treasury yield reaching an intraday high of 2.95%.
Commodity-linked currencies performed best against the dollar, with AUD/USD holding gains and closing near 0.7190, while USD/CAD hovered at 1.2600 before rebounding to the current 1.2630 price range.
The yen was the worst performer, with USD/JPY surging to around 130.18 in early trading Thursday. EUR/USD was sharply weaker, closing at 1.0650 price area, while GBP/USD closed slightly below 1.2500.
Technical Analysis
EURUSD (4-Hour Chart)
The EUR/USD pair declined on Wednesday, extending its slide that started yesterday and dropped to weekly lows below the 1.066 mark as the US dollar continues to gather strength against its rivals. The pair was trading lower at the open and remained under bearish pressure during the European session, then refreshed its daily lows toward the 1.065 area in the early US trading session. The pair is now trading at 1.0669, posting a 0.59% loss daily. EUR/USD stays in the negative territory amid renewed US dollar strength, as The stronger expected US economic data helped the greenback to find demand. The ISM Manufacturing PMI rose to 56.1 in May, showing that the business activity in the manufacturing sector continued to expand in the US. For the Euro, the ECB Governing Council member Robert Holzmann’s hawkish comments today failed to lift the EUR/USD higher, as he said that a 50 basis points rate hike will be needed due to the record-high inflation.
For the technical aspect, the RSI indicator is 38 figures as of writing, suggesting that the pair is facing heavy bearish pressure as the RSI keeps heading south. As 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 heading to test the 1.0622 support. A break below that support might open the road for near-term losses.
The pair GBP/USD tumbled on Wednesday, being surrounded by heavy bearish momentum and extended its slide toward the 1.2500 area as investors focus on the weakening UK economy. The pair preserved its downside traction during the first half of the day, then dropped to a daily low below the 1.2490 level and extended its intra-day losses. At the time of writing, the cable stays in negative territory with a 0.98% loss for the day. The risk aversion and higher US bond yields have both underpinned the US dollar today, as the US equity market tumbled sharply following the release of an upbeat US ISM Manufacturing PMI data. For the British pound, the worries about the cost of the living crisis remained as the UK Manufacturing PMI data for May showed that manufacturing activity in the UK expanded at its weakest pace rate since January 2021. The widening Fed/BoE policy differentials might also keep acting as a headwind for the cable.
For the technical aspect, the RSI indicator is 32 figures as of writing, suggesting that the downside is preserving strength and the bearish shift in the near-term outlook is confirmed. For the Bollinger Bands, the price moved out of the lower band, indicating that a strong trend continuation could be expected. In conclusion, we think the market will be bearish as long as the 1.2588 resistance line holds. GBP/USD could extend its slide toward 1.2341 if the pair breaks below the 1.2390 support and starts using that level as resistance.
After the Bank of Canada’s decision to hike the overnight rate by 50 bps on Wednesday, the pair USD/CAD regained some upside momentum and recovered toward the 1.2670 area. The pair climbed to a daily high after dropping to daily lows below the 1.262 level in the early US session, but then witnessed fresh selling to erase all of its daily gains. USD/CAD is trading at 1.2637 at the time of writing, losing 0.10% daily. The loonie has been lifted higher by the hawkish BoC, who said that interest rates would need to rise further and they are prepared to act more forcefully if needed to meet its commitment to achieving the 2% inflation target. On top of that, the surging crude oil prices also acted as a tailwind for the commodity-linked loonie and dragged the USD/CAD pair lower as WTI has rebounded back to the $117 per barrel area. The black gold’s near-term outlook remains bullish as North America and Europe head into peak driving season and lockdowns in Shanghai have now ended.
For the technical aspect, the RSI indicator is 37 figures as of writing, suggesting that the downside is more favoured as the RSI stays below the mid-line. For the Bollinger Bands, the price lost its upside strength and dropped toward the lower band, therefore the downside traction should persist. In conclusion, we think the market will be bearish as the pair is testing the 1.2636 support. A four-hour close below that support will favour a downside continuation.
Please note the adjustment on the following products due to the international holiday in June:
The above time is MT4/5 server time. The trading time of other products is not affected. The above data may be subject to change. Please refer to the actual time on MT4/5.
If you have any questions, our team will be happy to answer your questions. Please mail to [email protected] or contact the service online.
U.S. equities markets resumed trading on the last day of May and closed slightly lower following last week’s positive mood shift. The Dow Jones Industrial Average dropped 0.67% to close at 32990.12. The S&P 500 lost 0.63% to close at 4132.15. The Nasdaq Composite slipped 0.41% to close at 12081.39. The energy sector fared worse throughout yesterday’s trading. The EU has agreed to ban most crude imports from Russia, thus sending oil prices surging; however, oil prices soon dropped as OPEC has also agreed on suspending Russia from its oil production deal.
The benchmark U.S. 10-year Treasury yield climbed to 2.862%.
On the economic docket, Australia’s GBP will be released and PMI figures from China, Germany, Britain, and the U.S. will also be released. Later in the American trading session, the Bank of Canida is set to release its interest rate decision.
Main Pairs Movement
The Dollar index rose 0.41% throughout yesterday’s trading. The rise ended the Dollar index’s three-day losing streak. Rising bond yields and uncertainty among equity markets helped buoy the U.S. Greenback against other major foreign currencies.
EURUSD lost 0.41% throughout yesterday’s trading. Soaring inflation in the Eurozone and a weak economic outlook both add pressure to the ECB’s easy money policy. Despite recent hawkish tones from the ECB, it remains to be seen on how the central bank will react with monetary tightening possibly adding further downward pressure on the economic recovery.
GBPUSD dropped 0.39% throughout yesterday’s trading. Broad-based Dollar demand ended Cable’s four-day winning streak. Market participants will be focusing on today’s PMI figures from both the U.K. and the U.S.
USDCAD lost 0.07% throughout yesterday’s trading. Despite a stronger dollar, the Canadian Loonie still came out ahead as oil prices surged due to the EU’s newly agreed sanctions on Russian oil exports.
Technical Analysis
EURUSD (4-Hour Chart)
The EUR/USD pair declined on Tuesday, failing to extend its previous rally, and continued to trade deep in negative territory below the 1.075 mark area amid risk-off market sentiment. The pair were surrounded by heavy bearish momentum and dropped daily low below 1.069 level in the late European session, then rebounded back to recover some of its daily losses. The pair is now trading at 1.0732, posting a 0.40% loss daily. EUR/USD stays in the negative territory amid a stronger US dollar across the board, as rising US bond yields helped the greenback to find demand when US market participants return from a long weekend. Moreover, the release of the US Consumer Confidence also underpinned the dollar, as it came in at 106.4 in May and better than the 103.9 expected. For the Euro, the ECB tightening expectations should help limit the losses for EUR/USD pair, as the latest inflation figures were above expected and Eurozone money markets now expect a 115 bps hike from the ECB before year-end.
For the technical aspect, the RSI indicator is 52 figures as of writing, suggesting that the upside has regained strength as the RSI keeps heading north. As for the Bollinger Bands, the price rebounded from the lower band and rose toward 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 might head to re-test the 1.0786 resistance. The rising RSI also reflects bull signals.
Resistance: 1.0786, 1.0846, 1.0921
Support: 1.0651, 1.0594, 1.0549
GBPUSD (4-Hour Chart)
The pair GBP/USD edged lower on Tuesday, retreating from a monthly high and weakening further below the 1.2600 mark amid a downbeat market mood. The pair witnessed heavy selling at the start of the day and dropped to a daily low below 1.256 level heading into the US session, then regained upside traction to erase some of its intra-day losses. At the time of writing, the cable stays in negative territory with a 0.30% loss for the day. The overnight hawkish comments by Fed Governor Christopher Waller lend strong support to the US Treasury bond yields and lifted the greenback higher, as he backed a 50 bps rate hike for several meetings until inflation eases back toward the central bank’s goal. For the British pound, the worries about the cost of living crisis and a possible UK recession later in 2022 continued to exert bearish pressure on the GBP/USD pair. Investors now expect that a jumbo rate hike by the BoE would take its toll on the UK economy, which makes it difficult for the cable to gather bullish momentum.
For the technical aspect, the RSI indicator is 52 figures as of writing, suggesting that the upside is losing strength as the RSI stays flat near the mid-line. For the Bollinger Bands, the price failed to cross above the moving average and retreated slightly, indicating that some downside trend could be expected. In conclusion, we think the market will be bearish as long as the 1.2652 resistance line holds. But a break above that level could be seen as a bull signal and open the door for additional gains toward 1.2761.
Resistance: 1.2652, 1.2761, 1.2865
Support: 1.2501, 1.2341, 1.2180
USDCAD (4-Hour Chart)
As the Bank of Canada is expected to announce a 50 bp rate hike on Wednesday, the pair USD/CAD preserved its bearish momentum and tumbled to fresh one-month lows near the 1.263 mark on Tuesday. The pair flirted with the 1.266~1.268 area during the first half of the day, then started to see fresh selling and erased all of its daily gains heading into the US session. USD/CAD is trading at 1.2642 at the time of writing, losing 0.10% daily. The recovery witnessed in the US dollar failed to support the USD/CAD pair as the loonie rose across the board ahead of the BoC meeting. On top of that, the falling crude oil prices also failed to undermine the commodity-linked loonie and pushed the USD/CAD pair higher despite WTI having retreated to the $114 per barrel area after nearly hitting the $120 mark earlier in the session. The news reported that EU 27 leaders have agreed on a Russian oil embargo to lend support to oil prices, as the EU agreed to phase out 90% of Russian oil imports by the year’s end.
For the technical aspect, the RSI indicator is 32 figures as of writing, suggesting that the pair is facing heavy bearish pressure as the RSI stays near the oversold zone. For the Bollinger Bands, the price remained under pressure around the lower band, therefore the downside traction should persist. In conclusion, we think the market will be bearish as the pair is testing the 1.2634 support. Further losses could be expected if the pair break below the aforementioned support.
U.S. equity markets were closed on the 30th in celebration of memorial day, and markets will reopen for trading on the 31st.
After the tremendous crash of UST and Luna, the team behind the Terra blockchain project has voted to revive Luna but not TerraUSD, the stablecoin. Previous Luna tokens are now branded as “Luna Classic”, and the newly issued token will be branded as Terra 2.0. Despite efforts from the Terra team to restore confidence in the Terra protocol, market participants are not buying into what could be another financial detriment. Terra 2.0 went live over the previous weekend and peaked at $19.53 on Saturday, but subsequently crashed to around $4.39 in just hours. The entire cryptocurrency market is still in the wake of Terra’s collapse, but market participants seem to be circulating back as trading volume has increased over the past couple of days. As of writing, Bitcoin is trading at 31,733, Ethereum at 1998.419, and Solana at 47.12.
Main Pairs Movement
The dollar index continued to fall for the third trading day. The U.S. Greenback fell 0.26% against a basket of other major foreign currencies.
EURUSD rose 0.38% over the previous trading day. Broad-based dollar weakness allowed the EURUSD pair to continue its upward trajectory. Germany’s CPI soared to 7.9% YoY, helping the narrative of a more aggressive ECB.
GBPUSD rose 0.19% over the previous trading day. The recent fiscal stimulus sent out by the BoE has allowed some breathing room for the British Pound.
USDCAD fell 0.51% over the previous trading day. Risk on the environment and a broad-based Dollar weakness has allowed the Canadian Loonie to gain against the Dollar for the fourth consecutive trading day.
Technical Analysis
EURUSD (4-Hour Chart)
The EUR/USD pair advanced on Monday, preserving its upside traction, and trades near a fresh monthly high near the 1.0780 area amid risk-on market sentiment. The pair was trading higher and touched a daily high around 1.078 level during the European session, but then lost its bullish strength to surrender some of its daily gains. The pair is now trading at 1.0782, posting a 0.44% gain daily. EUR/USD stays in the positive territory amid renewed US dollar weakness, as the latest news support investors’ mood and showed that China has announced it would start lifting covid-related restrictions in Shanghai this week as planned. The expectations that the Fed could pause or slow down the rate hike cycle later in the year continued to act as a headwind for the greenback. For the Euro, the Germany Consumer Price Index surged to 7.9% YoY in May, which came in higher than expected and underpinned the expectation that the ECB will start of its hiking cycle as soon as this summer.
For the technical aspect, the RSI indicator is 67 figures as of writing, suggesting that the upside is preserving strength as the RSI keeps heading north. As for the Bollinger Bands, the price regained upside traction and climbed toward the upper band, 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 1.0810 resistance. Further advances could be expected if the pair breaks above that resistance.
Resistance: 1.0810, 1.0921
Support: 1.0710, 1.0651, 1.0549
GBPUSD (4-Hour Chart)
The pair GBP/USD edged higher on Monday, failing to extend its rally, and consolidated near one-month highs around the 1.2650 area amid an upbeat tone to risk appetite at the start of the week. The pair remained in quiet trading conditions and dropped to a daily low below 1.262 level in the early European session, then rebounded back to erase most of its intra-day losses. At the time of writing, the cable stays in positive territory with a 0.24% gain for the day. The release of the US PCE data last Friday reaffirmed the expectations that the Fed could pause the rate hike cycle as inflationary pressures in the US could be easing. Therefore, the dollar remained under bearish pressure on the Memorial Day public holiday. For the British pound, the fiscal stimulus plan that will help households struggling under the rising inflationary pressures continued to act as a tailwind for the GBP/USD pair. But the escalating recession fears due to higher inflation might keep limiting the upside for the cable.
For the technical aspect, the RSI indicator is 63 figures as of writing, suggesting that the upside is more favored as the RSI stays above the mid-line. For the Bollinger Bands, the price preserved its positive traction and climbed toward the upper band, indicating that the upside momentum should persist. In conclusion, we think the market will be bullish as the pair is testing the 1.2631 resistance. Sustained strength above that resistance will reaffirm the positive bias and pave the way for additional gains.
Resistance: 1.2631, 1.2761, 1.2865
Support: 1.2501, 1.2341, 1.2180
USDCAD (4-Hour Chart)
As the Canadian dollar was among the top performers during the US trading session on Monday, the pair USD/CAD was surrounded by bearish momentum and dropped to fresh monthly lows near the 1.2650 level. The pair witnessed heavy selling for most of the day, then extended its slide and refreshed daily lows after the start of the US trading session. USD/CAD is trading at 1.2657 at the time of writing, losing 0.49% daily. The prospects for an eventual slowdown of the Fed’s policy tightening and the prevalent risk-on environment have both weighed on the safe-haven US dollar, as the easing of COVID-19 lockdowns in China lends support to investors’ mood. 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 climbed above monthly highs near $117 per barrel area. The expectations for a recovery of oil demand in China are acting as a tailwind for the black gold.
For the technical aspect, the RSI indicator is 27 figures as of writing, suggesting that the pair is facing heavy bearish pressure as the RSI reaches the oversold zone. For the Bollinger Bands, the price continued to move alongside the lower band, therefore the downside traction should persist. In conclusion, we think the market will be slightly bullish as the pair is in oversold condition now, therefore it should witness some technical correction before edging lower. On the downside, further losses can be expected if the pair falls below the next support at 1.2634.
U.S. equity markets ended the week on a high note. The Dow Jones industrial average rose 1.76% to close at 33212.96. The S&P 500 jumped 2.47% to close at 4158.24. The Nasdaq composite leaped 3.33% to close at 12131.13. Friday’s rally in equities was assisted by the personal consumption expenditure price index, which rose 4.9% over April, coming in as expected and showing signs of a decelerating inflationary environment. Market participants gained confidence in equities after the FOMC minutes, released on Wednesday, which did not indicate a more hawkish tone but rather a Fed that was eager to expedite the tightening of its balance sheet.
On the economic docket, EU leaders are meeting on Monday the 30th, and China’s PMI and the EU CPI will be released on the 31st. On June 1st, Australian GDP, Germany, and Britain PMI, and the U.S. ADP nonfarm employment change data will be released. On June 2nd, Australian retail sales and U.S. initial jobless claims will be released. On June 3rd, market participants will be focused on the U.S. May nonfarm payrolls and unemployment rate.
Main Pairs Movement
The dollar index continued to fall on Friday. The index dropped 0.12% to close around the 101.66 regions. The improved risk environment in US equities encouraged market participants to rotate into equities. The benchmark U.S. 10-year Treasury yield retreated to 2.743%.
EURUSD rose 0.12% throughout Friday’s trading. Risk on the environment helped buoyed the Euro against the Dollar; furthermore, the ECB’s hawkish tone should help the shared currency over the longer horizon.
GBPUSD rose 0.22% throughout Friday’s trading. A one-time fiscal stimulus from the British government helped boost the Pound against the Dollar. Strong resistance sits around the 1.26 price region.
USDCAD dropped 0.4% throughout Friday’s trading. The Canadian Loonie continued to rise against the dollar as oil prices recover above the $113 per barrel price level. The Risk-On environment also diminished the demand for safe-haven assets, such as the U.S. Greenback.
Technical Analysis
EURUSD (4-Hour Chart)
The EUR/USD pair consolidated on Friday, staying in the lower half of its daily range and hovering around the 1.071 area amid mixed market sentiment. The pair was trading higher and touched fresh monthly highs near the 1.0770 level in the Asian session, but then retreated to erase most of its daily gains. The pair is now trading at 1.0744, posting a 0.21% gain daily. EUR/USD stays in the positive territory amid slightly US dollar weakness, as the US annual Core PCE inflation in April fell to 4.9% and failed to surprise the markets. The expectation that the Fed could pause or slow down the rate hike cycle once rates have reached the neutral level later in the year is also exerting some bearish pressure on the greenback. For the Euro, the ECB Governing Council member Pablo Hernandez de Cos said that the first-rate hike will come shortly after they end the QE in Q3, which provided some support for the pair.
For the technical aspect, the RSI indicator is 63 figures as of writing, suggesting that the upside is more favored as the RSI stays above the mid-line. As for the Bollinger Bands, the price regained upside traction and climbed toward the upper band, therefore a continuation of the upside trend could be expected. In conclusion, we think the market will be bullish as the pair is ready to test the 1.0754 resistance. A break above that resistance will lead to further gains and technical readings also favor a bullish continuation.
Resistance: 1.0754, 1.0810, 1.0921
Support: 1.0651, 1.0549, 1.0464
GBPUSD (4-Hour Chart)
The pair GBP/USD advanced on Friday, retreated slightly from one-month highs in the 1.2660 area but regained upside momentum after the release of US PCE data. The pair gather bearish momentum and dropped to a daily low below the 1.2590 level during the European session, then rebounded back toward the 1.265 area heading into the US session. At the time of writing, the cable stays in positive territory with a 0.42% gain for the day. The annual Core PCE Price Index, which the Fed uses when conducting its monetary policy, failed to underpin the US dollar as the number in April came in line with the market expectation of 4.9%. The data also reduced the pressure on the Fed to tighten monetary policy at a faster pace. For the British pound, the focus remained on the fiscal stimulus plan that the UK government announced on Thursday as they will send one-off payments of £650 to lowest-income households to help them with rising prices. Therefore, the fiscal stimulus helped the cable to find demand.
For the technical aspect, the RSI indicator is 64 figures as of writing, suggesting that the upside is preserving strength as the RSI keeps heading north. For the Bollinger Bands, the price continued to rise toward the upper band, indicating that the upside traction should persist. In conclusion, we think the market will be bullish as the pair is testing the 1.2635 resistance. Sustained strength above that resistance could open the road for additional gains.
Resistance: 1.2635, 1.2761, 1.2865
Support: 1.258, 1.2501, 1.2341
USDCAD (4-Hour Chart)
As the softer-than-expected US PCE Price Index data in April failed to impress the USD bulls on Friday, the pair USD/CAD remained under pressure and maintained its offered tone below the 1.275 level. The pair were surrounded by bearish momentum during the first half of the day, then preserved its downside traction and refreshed its daily lows near the 1.2730 mark ahead of the US session. USD/CAD is trading at 1.2746 at the time of writing, losing 0.19% daily. The speculations that the Fed could pause or slow down the rate hike cycle later this year were reaffirmed as the US PCE data indicated that inflationary pressures in the US might be easing. On top of that, the retreating crude oil prices failed to lift the USD/CAD pair higher as WTI has stabilized just below monthly highs near the $113 per barrel area. But the expectations for strong US fuel demand as peak driving season approaches might limit the losses for the black gold.
For the technical aspect, the RSI indicator is 37 figures as of writing, suggesting that the downside is more favored as the RSI stays below the mid-line. For the Bollinger Bands, the price continued to move alongside the lower band, therefore the downside traction should persist. In conclusion, we think the market will be bearish as the pair has already broken below the previous support at 1.2763. If the pair falls below the next support at 1.2725 and starts using it as resistance, further losses can be expected.
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U.S. equities markets rallied on Wednesday’s trading. The Dow Jones Industrial Average rose 1.61% to close at 32637.19. The S&P 500 climbed 1.99% to close at 4057.84. The Nasdaq composite gained 2.68% to close at 11740.65. Wednesday’s rebound could be a short-term recovery after equities saw heavy selling over the past month. Global macro-economic factors remain weak, thus market participants should still be aware of downside risks and enhance risk management.
The consumer discretionary sector built on Tuesday’s momentum and gained the most out of all sectors in the S&P 500 index. Macy’s raised its 2022 profit outlook, while retail giant William Sonoma beat earnings estimates—Macy’s soared 19.3%, and William Sonoma shot up 13%. Dollar Tree, a major discount retailer in the U.S., also enjoyed a 21.9% boost in share price after the company announced earnings that were better than estimated.
The benchmark U.S. 10-year Treasury yield continued to fall and is currently sitting at 2.752%.
Elon Musk increased his commitment to the purchase of Twitter. Twitter’s share price surged 6.3% after Musk announced that he will increase his takeover bid to $33.5 billion; however, Musk is still on a mission to rid Twitter of “bot users” and will not commit until a full vet of Twitter’s user base.
Main Pairs Movement
The Dollar Index sold off on Wednesday’s trading. Market participants rotated out of the money market into equity markets as risk sentiment improved on Wednesday. The Dollar Index currently sits at around 101.717, which is a near-term support level for the index.
EURUSD rose 0.43% throughout yesterday’s trading. The Euro rose against the Dollar amidst broad-based Dollar weakness. The weak U.S. GDP report also allowed Euro bulls to push the shared currency higher.
GBPUSD rose 0.16% throughout yesterday’s trading. The British Pound has gained back substantial ground against the Dollar over this month. Recently announced FOMC minutes, however, show the Fed is ready to hike rates at least by 100 basis points throughout the next two meetings.
USDCAD fell 0.34% throughout yesterday’s trading. Commodities, specifical oil, surged once again as the WTI offshore rose above $114 per barrel, thus favoring the commodity-linked Canadian Loonie.
Technical Analysis
EURUSD (4-Hour Chart)
The EUR/USD pair advanced on Thursday, ending its slide that started yesterday and recovered toward the 1.072 area amid the risk-on market sentiment. The pair dropped to a daily low below 1.067 level in the late Asian session, but then regained upside momentum and recovered all of its daily losses. The pair is now trading at 1.0718, posting a 0.40% gain daily. EUR/USD stays in the positive territory amid a weaker US dollar across the board, as the generally positive tone around the equity markets and downbeat US data both undermined the safe-haven greenback. The US GDP report showed that the US economy contracted by a 1.5% annualized pace during the first quarter of 2022, adding to the concerns about the worsening global economic outlook. For the Euro, the expectations that the European Central Bank could raise rates at some point in the summer keep acting as a tailwind for the pair, as the rising eurozone inflation is pressing the ECB to announce quantitative restrictions.
For the technical aspect, the RSI indicator is 63 figures as of writing, suggesting that the upside is more favored as the RSI stays above the mid-line. As for the Bollinger Bands, the price rose from the moving average and climbed toward the upper band, 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. Further gains could be expected if the pair break above that level.
The pair GBP/USD edged higher on Thursday, regaining bullish traction, and rebounded slightly from the 1.255 area amid the improving market mood. The pair gather bullish momentum and touched a daily high during the European session, but then lost its strength and surrendered most of its intra-day gains. At the time of writing, the cable rebounds back slightly and stays in positive territory with a 0.02% gain for the day. The minutes of the FOMC’s May policy meeting failed to provide standout hawkish surprises, as market participants now expect that the Fed could pause or slow down the rate hike cycle once rates have reached the neutral level later in the year. For the British pound, reports showed that the UK Chancellor of the Exchequer Rishi Sunak could be about to announce a fiscal stimulus plan for UK consumers and low-income households, which has lent some support to the cable.
For the technical aspect, the RSI indicator is 59 figures as of writing, suggesting that the buyers retain control of the pair’s action as the RSI stays above the mid-line. For the Bollinger Bands, the price regained upside traction and climbed toward the upper band, indicating that the upside momentum should persist. In conclusion, we think the market will be bullish as the pair is heading to test the 1.2605 resistance. On the downside, a four-hour close below the 1.2487 support could favor the sellers and cause the pair to drop toward 1.2430.
As the risk-on market mood and the strong rally in the equity markets drove flows away from the US dollar on Thursday, the pair USD/CAD extended its slide and refreshed daily lows below the 1.2780 mark. The pair reached a daily top above the 1.2845 level in the late Asian session, but then failed to preserve its upside traction and retreated toward the 1.2780 area heading into the US session. USD/CAD is trading at 1.2785 at the time of writing, losing 0.24% daily. The speculations that the Fed could pause or slow down the rate hike cycle later this year exerted some bearish pressure on the greenback, as the Fed could reassess the need for further tightening once rates have reached the neutral level. On top of that, the surging crude oil prices also provided strong support to the commodity-linked loonie as WTI rose to a weekly high near $114 per barrel area. The black gold was underpinned by the expectations for rising oil demand in the US as the peak driving season approaches.
For the technical aspect, the RSI indicator is 41 figures as of writing, suggesting that the downside is more favored as the RSI stays below the mid-line. For the Bollinger Bands, the price remained under pressure and crossed below the moving average, therefore the downside traction should persist. In conclusion, we think the market will be bearish as the pair is heading to test the 1.2767 support. A break below that support will lead to further losses and technical readings also favor a bearish continuation.
26 May 2022, Singapore City, Singapore –VT Markets, the international multi-asset broker with global footprints in over 160 countries, is participating in the iFX EXPO International on 7 – 9 June at Limassol, Cyprus as part of its commitment to expanding global markets.
iFX Expo International is the largest Global B2B Fintech Conference in the world that connects high-level finance iFX Expo International is the largest Global B2B Fintech Conference in the world that connects high-level finance experts and thought leaders in finance, financial services and fintech industry. This three-day event is the place for global Fintech collaborations, bringing together prominent representatives from technology and service providers, digital assets, blockchain, retail and institutional brokers, payments, banks and liquidity providers, affiliates and IBs, regulation and compliance.
Due to a series of unprecedented geopolitical events, economic turbulence has become the norm over the past two Due to a series of unprecedented geopolitical events, economic turbulence has become the norm over the past two years and the trading industry has had to learn to adapt. VT Markets will contribute to the discussion on the big ideas, important trends and explore how technological, social, governmental changes, regulation and compliance are shaping the future of the Fintech industry.
AWARDS
At this event, VT Markets is proud to be nominated for six categories of Ultimate Fintech Awards 2022:
• Best Affiliate Program
• Best Global Broker
• Best ECN/STP Broker
• Best Copy Trading Broker
• Fastest Growing Broker
• Best Cryptocurrency Broker
These nominations recognise VT Markets’ continuous efforts in establishing its international branding as the innovative These nominations recognise VT Markets’ continuous efforts in establishing its international branding as the innovative market leader in the trading industry. VT Markets will showcase its attractive affiliates and IB partnership programmes, CRM, API support and comprehensive institutional solutions to its global partners and client base at this event.
Yiangos Georgiou, Director of Business Development, comments:
“As part of our global expansion strategy, VT Markets is solidifying our presence in Europe, LATAM, MENA, GCC and Southeast Asia regions. We recognise that the success of our partners in attracting and retaining new clients is crucial to our expansion strategies in the European markets. Our affiliates and IB partners attract high volumes of client traffic from countries all over the world to bring in sustainable businesses by working in accordance with their region’s regulations. VT Markets focuses on providing innovative trading products and service offerings that leverage the latest technology to serve our international clients and partners. We are committed to developing our international branding, delivering impeccable client service and continuing our growth momentum globally.”
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