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 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 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.
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 Digital asset Broker
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.”
About VT Markets
VT Markets, based in Sydney, Australia, is a subsidiary of VT Markets LLC and leverages more than 10 years of experience and expertise in global financial markets to offer easy and transparent market access and help our clients pursue their financial goals. Founded in 2016, VT Markets has applied for advanced technical support in the retail FX market to provide clients with superior trading experience.
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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U.S. equities markets rebounded over the previous trading day. The Dow Jones Industrial Average rose 0.6% to close at 32120.28. The S&P 500 gained 0.95% to close at 3978.73. The Nasdaq Composite rallied 1.51% to close at 11434.74.
The FOMC released its meeting minutes during the American trading session on the 25th. According to the minutes, the committee reiterated the importance of reigning in soaring inflation and possibly more interest rate hike of the same magnitude as the previous interest rate hike. 50 basis points seem to be the largest jump the FOMC is willing to apply per rate hike, however, the meeting minutes did indicate a possible shift from a “neutral” central bank stance to a more “restrictive” stance to more aggressively shrink the central bank’s balance sheet. Importantly, a 50 basis point interest rate hike is almost certain at this point for the June FOMC meeting.
The benchmark U.S. 10-year treasury yield fell slightly and is currently sitting at 2.743%.
The consumer discretion sector experienced significant gains over the previous trading day. Retail earnings from Nordstrom, Dick’s Sporting Goods, and Best Buy all exceeded analyst estimates. Nordstrom shares popped 14% after it surpassed analyst estimates and rose a full-year outlook. In contrast to last week’s consumer sector earnings, the rise in these three companies indicate a shift in consumer behavior and shows, possibly, still strong demand from consumers.
Main Pairs Movement
The Dollar Index recovered after the FOMC meetings were released. The FOMC’s committed hawkish stance snapped the Dollar Index’s downtrend. The index gained 0.3% over the previous trading day and was able to find support near the 101.768 price level.
EURUSD fell 0.51% over the previous trading day. The stronger U.S. Dollar pushed the Euro lower despite renewed bullish sentiment for the Euro. EURUSD was still able to close above the 1.06 price level.
GBPUSD rose 0.37% to close over the previous trading day. The British Pound was able to gain against the Dollar despite broad-based Dollar strength. Technical analysis suggests Pound bulls remain in control for the short term.
USDCAD traded mostly sideways over the previous trading day. USDCAD ended the day down 0.02%. The Canadian Loonie recovered as global commodities see a gradual rise in demand.
Technical Analysis
EURUSD (4-Hour Chart)
The EUR/USD pair declined on Wednesday, failing to preserve its upside momentum, and retreated from a monthly high above the 1.074 level that touched yesterday amid renewed US dollar strength. The pair were surrounded by bearish momentum for most of the day and dropped to a daily low below the 1.065 level, then rebounded slightly to recover some of its daily losses. The pair is now trading at 1.0683, posting 0.44% losses daily. EUR/USD stays in the negative territory amid a stronger US dollar across the board, as the worsening global economic outlook continued to weigh on market mood and helped the safe-haven greenback to find demand. The market focus now shifts to the FOMC meeting minutes later in the US session, which might provide fresh impetus. For the Euro, the European Central Bank’s Financial Stability Review noted that an abrupt increase in real interest rates could induce house price corrections, which acted as a headwind for the EUR/USD pair.
For the technical aspect, the RSI indicator is 57 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 failed to cross below the moving average after touching it, therefore some upside traction could be expected. In conclusion, we think the market will be slightly bullish as the pair might face some technical correction before testing the 1.0622 support. The rising RSI also reflects bull signals.
Resistance: 1.0736, 1.0816, 1.0921
Support: 1.0622, 1.0549, 1.0464
GBPUSD (4-Hour Chart)
The pair GBP/USD edged higher on Wednesday, ending its intra-day slide and regaining upside traction amid improving market sentiment ahead of FOMC Meeting Minutes. The pair remained under pressure below the 1.2550 mark and dropped to a daily low near 1.2485 in the European session, but then started to see fresh buying to erase all of its daily losses. At the time of writing, the cable stays in positive territory with a 0.12% gain for the day. The FOMC will release the minutes of its May policy meeting later in the US session, which is expected to outline the Fed’s much more hawkish stance that significant further monetary tightening. Market participants will also look for clues about the possibility of a 75 bps rate hike in June. For the British pound, the prospect for further BoE monetary tightening is being reassessed by investors, as the disappointing PMI data from the UK on Tuesday showed a significant loss of momentum in the private sector’s business activity.
For the technical aspect, the RSI indicator is 57 figures as of writing, suggesting that the upside is preserving strength as the RSI keeps heading north. For the Bollinger Bands, the price regained upside traction and crossed above the moving average, indicating that the upside momentum should persist. In conclusion, we think the market will be bullish as the pair is heading to test the 1.2588 resistance. A four-hour close above that level could open the door for an extended rebound toward 1.2631 and the rising RSI also confirms the bullish shift in the near-term outlook.
Resistance: 1.2588, 1.2631, 1.2761
Support: 1.2487, 1.2341, 1.2180
USDCAD (4-Hour Chart)
As the worsening outlook for the global economy continued to weigh on investors’ mood and help the US dollar to demand on Wednesday, the pair USD/CAD gained positive traction for the second straight day and touched a weekly high above the 1.2880 mark. The pair were surrounded by bullish momentum during the first half of the day and reached a daily top in the European session, then retreated to surrender some of its daily gains. USD/CAD is trading at 1.2846 at the time of writing, rising 0.20% daily. Repositioning trades ahead of the FOMC minutes lend some support to the US dollar and pushed USD/CAD higher, as traders will look for clues about the possibility of a 75 bps Fed rate hike in June that might provide trading impetus to the pair. On top of that, the retreating crude oil prices also exerted some bearish pressure on the commodity-linked loonie as WTI continued to move sideways near the $110 per barrel area. Fuel demand in the US is expected to rise as peak driving season is approaching.
For the technical aspect, the RSI indicator is 54 figures as of writing, suggesting that the upside is losing some momentum but remained within positive levels. For the Bollinger Bands, the price regained some bullish strength and rebounded slightly, therefore the upside traction should persist. In conclusion, we think the market will be somewhat bullish as the pair is heading to test the 1.2894 resistance. A break above that resistance could open the road for additional gains.
U.S. equities markets endured another sell-off throughout Tuesday’s trading. The Dow Jones Industrial Average climbed 0.15% to close at 31928.62. The S&P 500 lost 0.81% to close at 3941.48. The Nasdaq Composite slid 2.35% to close at 11264.45. The technology sector and consumer discretionary sector bore most of the blunt.
The technology sector sold off after Snapchat issued a warning of a slowdown in online advertising revenue. Share of the social media giant fell 43% after the company stated that it would miss earnings and revenue targets for the current quarter. Meta platforms and Alphabet were also affected, shares of the respective company dropped 7.6% and 5%.
The benchmark U.S. 10-year Treasury yield continues to fall further and is currently sitting at 2.756%. Fear of recession has driven bond prices higher as market participants rotate into fixed-income securities. Bond prices and yields move in opposite directions. New home sales dropped 16.6% for April.
Main Pairs Movement
The Dollar Index, which measures the U.S. Dollar against a basket of major foreign currencies, continued to fall for the second day. The Dollar Index lost 0.32% throughout yesterday’s trading.
The Euro rose 0.4% against the dollar throughout yesterday’s trading. The Euro continues to be favored as the ECB hints at a possible rate hike as soon as July. The change in monetary policy would see the ECB exit a decade-long negative interest rates environment.
GBPUSD lost 0.46% throughout yesterday’s trading. Britain’s disappointing PMI data send the Sterling falling against the Dollar, but Cable was able to limit its losses amid a broad-based Dollar weakness.
USDCAD rose 0.4% over the previous trading day. The Canadian Loonie fell as oil prices retraced back below the $110 per barrel mark. The Canadian CPI rose to 6.7% for March, exceeding expectations of 6.1%.
Technical Analysis
EURUSD (4-Hour Chart)
The EUR/USD pair advanced on Tuesday, continuing its rally that started on Monday and climbed higher toward a monthly high above the 1.0730 mark amid hawkish ECB commentary. The pair was trading lower and touched daily lows during the Asian session, but then staged an impressive rebound to recover all of its daily losses heading into the US session. The pair is now trading at 1.0733, posting 0.42% gains daily. EUR/USD stays in the positive territory amid renewed US dollar weakness, as the weaker-than-expected US PMI data exerted bearish pressure on the greenback and make it difficult to find demand. The headline US Services PMI came in at 53.5, which is below expectations for a reading of 55.2 and indicated that growth momentum is losing. For the Euro, ECB President Christine Lagarde’s hawkish comments continued to act as a tailwind for EUR/USD, as she said that rates are likely to be positive at end of the third quarter.
For the technical aspect, the RSI indicator is 75 figures as of writing, suggesting that the pair is facing heavy bullish pressure as the RSI reached the overbought zone. As for the Bollinger Bands, the price continued to move alongside 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 testing the 1.0728 resistance. A four-hour close above that level could lead the pair toward the 1.0800 area.
Resistance: 1.0728, 1.0810, 1.0922
Support: 1.0661, 1.0549, 1.0464
GBPUSD (4-Hour Chart)
The pair GBP/USD declined on Tuesday, losing its recent upside strength, and tumbled back below the 1.2500 mark after the release of downbeat UK PMI data. The pair were flirting with the 1.2560~1.2590 area during the Asian session, then started to see heavy selling and retreated to a daily low below the 1.2480 level in the European session. At the time of writing, the cable stays in negative territory with a 0.33% loss for the day. The US Services PMI data in May missed the market expectation of 57.3 by a wide margin, suggesting that the business activity is starting to lose momentum. But the broad US dollar weakness failed to lend support to the GBP/USD pair today. For the British pound, the weaker UK PMI data released earlier in the session have dampened the prospect of further BoE monetary tightening and added fears about a possible recession this year. Therefore, the cable came under selling pressure today as a dismal PMI report signals a slowing in the rate of economic growth.
For the technical aspect, the RSI indicator is 58 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 regained bullish strength and crossed above the moving average, indicating that the upside traction should persist. In conclusion, we think the market will be bullish as long as the 1.2487 support line holds. A sustainable strength above that level will favor the bulls and the rising RSI also reflects bull signals.
Resistance: 1.2587, 1.2631, 1.2761
Support: 1.2487, 1.2341, 1.2180
USDCAD (4-Hour Chart)
As the Canadian dollar remained one of the worst performers during the US session on Tuesday, the pair USD/CAD regained its upside strength and reached a six-day high above the 1.2860 mark. The pair stayed quiet during the Asian session in the 1.279~1.281 area, then attracted fresh buying and extended its intra-day gains toward the 1.2870 level in the early US session. USD/CAD is trading at 1.2844 at the time of writing, rising 0.59% daily. The weaker-than-expected US PMI data weighed on the US dollar today but failed to drag the USD/CAD pair lower amid the falling loonie. On top of that, the sliding crude oil prices also exerted bearish pressure on the commodity-linked loonie as WTI dropped back toward the $109 per barrel area. Oil traders will remain focused on geopolitics headlines as the EU’s proposed ban on Russian oil looks increasingly unlikely.
For the technical aspect, the RSI indicator is 54 figures as of writing, suggesting that the upside is losing some momentum but remained within positive levels. For the Bollinger Bands, the price crossed above the moving average and moved toward the upper band, therefore the upside traction should persist. In conclusion, we think the market will be bullish as the pair is testing the 1.2847 resistance. A break above that resistance could be seen as a confirmation of the bullish trend in the near-term outlook.
U.S. equity markets rallied on the first trading day of the week. The Dow Jones Industrial Average rose 1.98% to close at 31880.24. The S&P 500 gained 1.86% to close at 3973.75. The Nasdaq composite climbed 1.59% to close at 11535.27. U.S. equities found momentum after witnessing one of its worst weeks in years, but it remains to be seen if this is a short-term rebound or a sustained positive run. The Macroeconomic environment does suggest, however, that there is still room for equities to fall. Inflation and interest rates still pose large challenges for corporations and the near-term economic outlook; furthermore, geopolitical tensions between Russia and Ukraine are still unresolved while energy and commodity prices still run at extremely elevated prices.
The benchmark U.S. 10-year Treasury yield currently sits at 2.844%.
The financial sector enjoyed a modest boost on Monday’s trading. JP Morgan, which rose 6.2%, said that it expects to reach key return targets sooner than expected. Citi, Wells Fargo, and Bank of America also rose more than 5% as bond yields recover.
President Joe Biden also sent positive notes that helped improve market sentiment. President Joe Biden announced that he is considering removing some of the tariffs imposed on Chinese imports that were placed by the previous administration.
Main Pairs Movement
The Dollar Index fell sharply throughout Monday’s trading. The DXY ended the day 0.91% down. A short-term equity rally saw market participants rotating out of currencies and favoring other asset classes.
EURUSD rose 1.22% throughout yesterday’s trading. Broad-based dollar weakness combined with a slightly hawkish tone of ECB president Lagarde buoyed the Euro against the Dollar.
GBPUSD rose 0.77% throughout yesterday’s trading. The lack of demand for the U.S. Greenback boosted the British Pound against the Dollar. The cable has broken through a key resistance level at 1.25.
USDCAD fell 0.55% throughout yesterday’s trading. This pair has retraced more than 2% since it reached its peak on the 12th of May. Recovering commodity prices, specifically crude oil prices, have helped the Canadian Loonie rise against the U.S. Greenback.
Technical Analysis
EURUSD (4-Hour Chart)
The EUR/USD pair surged on Monday, extending its rebound and climbed to multi-week highs above the 1.068 level amid ECB President Lagarde’s hawkish comments. The pair were surrounded by bullish momentum for most of the day, then started to see heavy buying and touched a daily high in the European session. The pair is now trading at 1.0563, posting 0.97% gains daily. EUR/USD stays in the positive territory amid renewed US dollar weakness, as the risk-on market mood weighed on the safe-haven greenback and pushed EUR/USD higher. Investors now turn optimistic as China prepares to reopen at the beginning of June after a two-month lockdown, which might boost the global economy. For the Euro, ECB President Christine Lagarde said that the central bank is likely to be in a position to exit negative rates by the end of Q3, which would allow a rate hike to take place in July.
For the technical aspect, the RSI indicator is 74 figures as of writing, suggesting that the pair might witness some near-term correction before climbing higher as the RSI reached the overbought zone. As for the Bollinger Bands, the price continued to move alongside the upper band, therefore the upside traction should persist. In conclusion, we think the market will be bullish as the pair already broke above the previous resistance at 1.0614.
The pair GBP/USD advanced on Monday, extending its recent gains, and reached its highest level in more than two weeks above 1.2590 level amid the wave of US dollar weakness. The pair preserved its upside traction and built on last week’s impressive gains during the Asian session, then reached a daily top in the European session. At the time of writing, the cable stays in positive territory with a 0.68% gain for the day. The easing concerns about China’s lockdown have exerted bearish pressure on the US dollar, dragging the safe-haven greenback to a fresh monthly low and lending strong support to GBP/USD pair. Investors will look for clues about the possibility of a 75 bps rate hike in June as the markets seem to have fully priced in at least a 50 bps Fed rate hike over the next two policy meetings. For the British pound, last week’s UK labor market and inflation data supported the case for further tightening from the BoE, which acted as a tailwind for the cable.
For the technical aspect, the RSI indicator is 68 figures as of writing, suggesting that the pair might face some near-term downside correction as the RSI lost its upside strength. For the Bollinger Bands, the price failed to move out of the upper band and started to retreat, indicating that some downside traction could be expected. In conclusion, we think the market will be bearish as the pair failed to test the 1.2631 resistance. The pair could make a technical correction before rising higher as the RSI indicator is sitting near 70.
As the US dollar came under renewed selling pressure on Monday amid the positive shift witnessed in risk sentiment at the start of the week, the pair USD/CAD extended its slide that started last Friday and struggled near a two-week low below the 1.2800 mark. The pair were surrounded by bearish momentum throughout the entire day, then remained under pressure to refresh its daily low below the 1.278 level in the early US trading session. USD/CAD is trading at 1.2795 at the time of writing, losing 0.35% daily. The hopes that loosening COVID-19 lockdowns in China could boost the global economy has driven flows away from the safe-haven US dollar and undermined the USD/CAD pair. On top of that, the retreating crude oil prices failed to lend support to the commodity-linked loonie as WTI remained within recent ranges near $110 per barrel area. Oil traders will remain focused on the Covid-19 lockdown situation in China, which might provide fresh impetus for black gold.
For the technical aspect, the RSI indicator is 40 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 crossed below the moving average and dropped towards the lower band, therefore the downside traction should persist. In conclusion, we think the market will be bearish as the pair is testing the 1.2788 support. A four-hour close below that level could open the door for additional losses and lead the pair towards the next support level at 1.2725.
U.S. equity markets traded without significant movement on Friday. The Dow Jones Industrial Average gained 0.03% to close at 31261.9. The S&P 500 gained 0.01% to close at 3901.36. The Nasdaq Composite lost 0.3% to close at 11354.62. Devaluation of equities continues as market participants assess soaring inflation. Growth and technology sectors continue to bear most of the blunt, although the consumer discretionary sector endured huge selloffs this week amid missed earnings estimates, slowed consumption, and lowered forward guidance.
The benchmark U.S. 10-year Treasury yield closed at 2.788% on Friday.
On this week’s economic docket, BoE’s governor Bailey is set to speak on the 23rd, Fed Chair Jerome Powell and ECB’s president Lagarde and both set to speak on the 24th, and the FOMC’s meeting minutes will be released on the 25th. The interest rate decision of the Newzeland Central bank will be released on the 24th. Germany’s GDP will be released on the 25th. U.S. Q1 GDP and initial jobless claims will be released on the 26th.
Main Pairs Movement:
The Dollar Index rose 0.15% over the last trading day of the week. Over the week, the Greenback lost around 1.3% against a basket of major foreign currencies.
The Euro fared worse against the Greenback on Friday, despite a broad market weakness of the Dollar. Low consumer confidence and soaring energy price continue to put downward pressure on the Eurozone’s economy and its currency.
GBPUSD rose 0.2% throughout last Friday’s trading. The Sterling rose around 2% against the Dollar after bottoming out at around the 1.22 price region. The cable will see tremendous volatility as the week progresses with policy statements from both the BoE and the Fed.
USDCAD rose 0.1% throughout last Friday’s trading. The Greenback has fallen around 0.69% against the Canadian Loonie over the week starting from the 16th. Rising commodity prices have allowed the Loonie to gain ground against the Greenback. Canadian core retail sales figures for March will be released on the 26th.
Technical Analysis
EURUSD (4-Hour Chart)
The EUR/USD pair edged lower on Friday, failing to extend its one-week rally, and fluctuated in a narrow range below 1.0600 in the absence of high-tier data releases. The pair attracted some buying and touched a daily high above 1.059 level, then regained downside momentum and refreshed its daily low in the US trading session. The pair is now trading at 1.0562, posting a 0.18% loss daily. EUR/USD stays in the negative territory amid renewed US dollar strength, as the risk-on flow led to a modest recovery in the US Treasury bond yields and provided some support to the greenback. The hawkish Fed and high inflation might keep acting as a tailwind for the dollar. For the Euro, the Eurozone Consumer Confidence Index rose to -21.1 in May, which showed that EU consumers struggle amid surging energy-driven inflation and a slowing economy. But the fact that ECB policymakers continue to signal possible rate hikes in July could limit the losses for the pair.
For the technical aspect, the RSI indicator is 60 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 resumed its decline and fell from the upper band, therefore some downside momentum can be expected for the pair. In conclusion, we think the market will be bearish as long as the 1.0594 resistance line holds. On the downside, sellers could start booking their profits with a four-hour close below 1.0507 support.
Resistance: 1.0594, 1.0622, 1.0728
Support: 1.057, 1.0464, 1.0355
GBPUSD (4-Hour Chart)
The pair GBP/USD consolidates its weekly gains on Friday, sticking to modest gains and extending its weekly recovery amid better-than-expected UK macro data. The pair was trading lower during the Asian session, then started to witness fresh buying and recover all of its intra-day losses heading into the US session. At the time of writing, the cable stays in positive territory with a 0.01% gain for the day. Despite the US dollar seeming to be suffering from profit-taking and sparking fears about the state of the US economy during the first half of the day, the expectations for a more aggressive policy tightening by the Fed helped limit the losses for the greenback and kept a lid on any meaningful upside for the GBP/USD pair. For the British pound, the upbeat UK Retail Sales data has provided some support to the cable, which rose by 1.4% every month in April and came in much better than the market’s expectation.
For the technical aspect, the RSI indicator is 59 figures as of writing, suggesting that the pair is facing some downside momentum as the RSI keeps heading south. For the Bollinger Bands, the price continued to remain under pressure and dropped towards the moving average, indicating that the negative traction should persist. In conclusion, we think the market will be bearish as the pair failed to break above the 1.2499 resistance. Only a violation of this support could be seen as a significant bullish development.
Resistance: 1.2499, 1.2631, 1.2761
Support: 1.2341, 1.2270, 1.2180
USDCAD (4-Hour Chart)
As the US dollar is recovering some ground on Friday amid risk aversion, the pair USD/CAD ended its slide to two-weeks lows and recovered towards the 1.2850 area. The pair were surrounded by bearish momentum and dropped to a daily low below 1.2780 level during the European session, but then regained upside traction to erase all of its daily losses. USD/CAD is trading at 1.2843 at the time of writing, rising 0.16% daily. The recovering US dollar continued to act as a tailwind for the USD/CAD pair, as the market mood started to turn sour in the US trading session. On top of that, the retreating crude oil prices also attracted some selling for the commodity-linked loonie as WTI has stabilized back towards the $109 per barrel area. Analysts expect an agreement regarding the proposed EU ban on Russian oil imports could be reached at an EU council summit at the end of this month, despite there hasn’t been much to update until now.
For the technical aspect, the RSI indicator is 49 figures as of writing, suggesting that there is no obvious trend now as the RSI lacks direction. For the Bollinger Bands, the price regained upside momentum and crossed above the moving average, therefore the upside traction should persist. In conclusion, we think the market will be bullish as the pair might re-test the 1.2890 resistance. A four-hour close above that resistance could open the door for additional profits and confirm the bullish bias.
U.S. equities markets attempted to rebound from Wednesday’s sluggish performance but failed to do so during Thursday’s trading session. The Dow Jones Industrial Average fell another 0.75% to close at 31253.13. The S&P500 lost 0.58% to close at 3900.79. The Nasdaq Composite slid 0.26% to close at 11388.5. Market participants poured into U.S. equities at the start of the trading session, but equities could not preserve momentum and began to fall towards the end of the trading session.
U.S. equity markets are set to experience more volatility during the last trading day of the week as option expiration day occurs. According to the CBOE’s calculations, around $1.9 trillion worth of derivatives is set to expire on the 20th– $ 460 billion of single stock derivatives and $855 billion of S&P 500 linked contracts. Options trading volume has reached an all-time high as market participants engage in risk hedging and speculation. The expiring S&P 500 options show a high concentration around the 4000 strikes.
U.S. weekly jobless claims rose to 218,000, compared to 197,000 in the previous report, marking a four-month high and a potential slow down of the labor market shortage. It is also important to note that while jobless claims have been increasing, continuing claims on the other hand are trending lower—indicating that hiring in the labor market is still active and workers are still experiencing a relatively easy process of switching between jobs.
Main Pairs Movement
The Dollar index dropped 1% over the previous trading day. Recent weak corporate earnings results from the U.S. and a higher than projected jobless claims figure both helped extend a Dollar correction since last week.
EURUSD rose 1.15% over the previous trading day. Broad-based Dollar weakness buoyed the Euro against the Dollar. EURUSD has recovered close to 2% since dropping to its multi-year low on May 12th.
GBPUSD rose 1.04% over the previous trading day. The Dollar selloff reversed the large drop in Cable on the 19th. Bearish sentiment, however, still surrounds Cable as U.K.’s economic outlook continues to look gloomy.
USDCAD dropped 0.49% over the previous trading day. In addition to the broad-based Greenback selloff, the Canadian Loonie continues to rise as global commodity prices climb.
Technical Analysis
EURUSD (4-Hour Chart)
The EUR/USD pair advanced on Thursday, preserving its bullish momentum and extending its rally toward the 1.058 level amid a heavy selloff witnessed in the US dollar. The pair touched a daily low below the 1.047 level heading into the European session but then staged an impressive rebound to recover all of its daily gains. The pair is now trading at 1.0579, posting 1.12% gain on a daily basis. EUR/USD stays in the positive territory amid renewed US dollar weakness, as the falling US Treasury bond yields and disappointing US macro releases both weighed heavily on the greenback. Markets now also seem to have fully priced in at least a 50 bps rate hike move over the next two FOMC meetings. For the Euro, the minutes of the ECB’s Monetary Policy Meeting showed that policymakers are concerned about inflation, reinforcing the speculation that ECB could raise rates at some point in the summer if conditions warrant it.
For the technical aspect, the RSI indicator is 65 figures as of writing, suggesting that the pair is facing heavy bullish momentum as the RSI keeps heading north. As for the Bollinger Bands, the price rose from the moving average and reached the upper band, therefore a continuation of the upside trend can be expected for the pair. In conclusion, we think the market will be bullish as the pair is testing the 1.0555 resistance. A four-hour close above that level will favor the bulls.
Resistance: 1.0555, 1.0622, 1.0728
Support: 1.0461, 1.0359
GBPUSD (4-Hour Chart)
The pair GBP/USD surged on Thursday, gaining upside traction, and climbed to its strongest level in two weeks near 1.251 area amid a weaker US dollar across the board. The pair started to see heavy buying after touching a daily low below the 1.235 level, then extended its daily gains and climbed towards the 1.250 area in the early US trading session. At the time of writing, the cable stays in positive territory with a 1.33% gain for the day. The broad-based US dollar weakness is mainly due to weaker-than-expected US macroeconomic data releases and falling US bond yields, as the headline Manufacturing Activity Index fell to 2.6 in May and well below the market’s expectations for a reading of 16.0. Moreover, the Initial Weekly Jobless Claims also rose to 218K. For the British pound, the BoE tightening discussion will remain a key driver as Tuesday’s upbeat UK labor market report and higher UK Inflation data have revived some bets on BoE tightening.
For the technical aspect, the RSI indicator is 65 figures as of writing, suggesting that the upside is more favored as the RSI is reaching the overbought zone. For the Bollinger Bands, the price regained upside strength and rose from the moving average, indicating that the positive traction should persist. In conclusion, we think the market will be bullish as the pair is testing the 1.2489 resistance. GBP/USD could target 1.2631 if 1.2489 is confirmed as support and the rising RSI also reflects bull signals.
Resistance: 1.2489, 1.2631, 1.2762
Support: 1.2372, 1.2270, 1.2180
USDCAD (4-Hour Chart)
As the Canadian dollar drew support from strong domestic consumer inflation reports and the US dollar remained under bearish pressures, the pair USD/CAD was surrounded by downside momentum and dropped back towards the 1.2800 area. The pair attracted heavy selling during the Asian session, then preserved its downside traction and refreshed its daily low below the 1.2790 level in the early US session. USD/CAD is trading at 1.2803 at the time of writing, losing 0.70% daily. The retreating US Treasury bond yields are acting as a headwind for the US dollar and exerting downward pressure on the USD/CAD pair. On top of that, the surging crude oil prices also provided strong support to the commodity-linked loonie as WTI has recovered back to $110per barrel area. The easing lockdown restrictions in China and ongoing oil supply concerns have both underpinned the global demand for crude oil.
For the technical aspect, the RSI indicator is 39 figures as of writing, suggesting that downside is more favored as the RSI stays below the mid-line. For the Bollinger Bands, the price resumed its decline and crossed below the moving average, therefore the downside traction should persist. In conclusion, we think the market will be bearish as long as the 1.2890 resistance line holds. On the downside, a four-hour close below the 1.2762 support could open the door for additional losses.
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U.S. equities markets fell sharply over the previous trading day. The Dow Jones Industrial Average lost 3.57% to close at 31490.07. The S&P500 dropped 4.04% to close at 3923.68. The Nasdaq composite plummeted 4.73% to close at 11418.16. The Dow Jones’ 3.57% drop marked its biggest loss since 2020 as market participants sold off equities over fears of inflation and slowed growth as the earnings season continue.
Four major U.S. retailers announced Q1 earnings reports this week. While Home Depot was able to beat earnings estimates and raise forward guidance, the others fail to deliver such a positive tone. Walmart and Target both reported a hit to their profits as supply chain issues eat into Q1 profits; furthermore, comments from these two companies paint a sluggish economic outlook. Macy’s, Nordstrom, and Gap are set to release Q1 earnings later in the month. Market participants should pay close attention to these reports as they could reveal key consumer spending information.
On the economic docket, the U.S. is due to release initial jobless claims as well as the Philadelphia Fed Manufacturing Index for May during today’s American trading session. On the 20th the U.K. will release its monthly retail sales figures for April.
Main Pairs Movement
The U.S. Greenback showed broad-based strength over the previous trading day. The Dollar Index snapped its three-day losing streak and gained 0.58% by market close. With Walmart and Target missing earnings estimates, market participants continue to be uncertain about the inflation peak and continue to anticipate further rate hikes by the Fed. Today’s scheduled U.S. initial jobless claims report will paint a better picture of U.S. labor markets.
EURUSD lost 0.8% over the previous trading day. The large-scale sell-off of U.S. equities sparked a flight to safety among market participants, thus buoying the U.S. Dollar. The Fed’s hawkish stance continues to favor the Greenback over the Euro.
The cable dropped 1.22% over the previous trading day. Britain’s CPI figure came in at a 40-year high of 9%, and food and energy prices contributed most to the jump in prices. Previous bearish economic remarks by the BoE and soaring U.K. inflation disfavored the Sterling.
USDCAD climbed 0.6% over the previous trading day. Strengthened Dollar and risk-averse sentiment helped the Dollar snap its three-day losing streak against the Canadian Loonie.
Technical Analysis
EURUSD (4-Hour Chart)
The EUR/USD pair declined on Wednesday, pulling back from weekly highs as the risk-averse market environment underpinned the dollar and helped it stay resilient against its rivals. The pair remained under bearish pressure during the first half of the day, then refreshed its daily low below the 1.0500 mark in the early US session. The pair is now trading at 1.0496, posting 0.47% losses daily. EUR/USD stays in the negative territory amid renewed US dollar strength, as Fed Chair Jerome Powell’s hawkish comments on Tuesday lend support to the greenback. He said that he will back interest rate increases until prices start falling back toward a healthy level. For the Euro, firmer speculation that the ECB could raise rates at some point in the summer should limit the losses for EUR/USD pair. On the economic data side, Eurozone’s Inflation rose 7.4% in April and disappointed the market’s expectations of 7.5%.
For the technical aspect, the RSI indicator is 55 figures as of writing, suggesting that the pair is facing some downside momentum as the RSI started to move south. As for the Bollinger Bands, the price fell from the upper band and dropped towards the moving average, therefore downside movements can be expected for the pair. In conclusion, we think the market will be bearish as the pair is heading to test the 1.04858 support. Further losses could be expected if the pair extends its slide below that support.
Resistance: 1.0555, 1.0622, 1.0728
Support: 1.0485, 1.0359
GBPUSD (4-Hour Chart)
The pair GBP/USD tumbled on Tuesday, struggling to capitalize on its recent strong rebound and attracted aggressive selling after the UK CPI report. The pair lost its upside tractions and dropped to a daily low below the 1.2380 level in the early European session, then rebounded slightly to recover some of its daily losses. At the time of writing, the cable stays in positive territory with a 0.84% loss for the day. The rising US Treasury bond yields and risk-off market mood continued to help the US dollar to fine demand, as Fed Chair Jerome Powell’s hawkish comments reaffirmed the expectations for a more aggressive policy tightening by the US central bank. For the British pound, the UK Consumer Prices Index (CPI) rose to 9% in April, which missed the market’s estimates of 9.1%. The downbeat CPI data have fueled the fears of stagflation and exerted bearish pressures on the GBP/USD pair.
For the technical aspect, the RSI indicator is 53 figures as of writing, suggesting that the risk remains skewed to the downside as the RSI keeps heading south. For the Bollinger Bands, the price resumed its decline and dropped towards the moving average, indicating that the downside traction should persist. In conclusion, we think the market will be bearish as the pair is heading to test the 1.2373 support. Technical indicators have lost their bullish strength and further losses could be expected on a break below that support.
Resistance: 1.2489, 1.2631, 1.2761
Support: 1.2373, 1.2270, 1.2180
USDCAD (4-Hour Chart)
As the downbeat market sentiment underpinned the US dollar and the hotter-than-expected Canadian CPI report failed to push the loonie higher on Wednesday, the pair USD/CAD edged higher and rebounded back towards the 1.285 area. The pair attracted some buying during the Asian session, then preserved its upside momentum and refreshed its daily top in the early US session. USD/CAD is trading at 1.2837 at the time of writing, rising 0.22% daily. The fears about aggressive Fed tightening this year amid Fed Chair Jerome Powell’s hawkish remarks on Tuesday continued to act as a tailwind for the safe-haven greenback. On top of that, the retreating crude oil prices also weighed heavily on the commodity-linked loonie as WTI has dipped back towards the $110 per barrel area. The downturn in macro risk sentiment has undermined the black gold despite further updates showing an easing of lockdown restrictions in Shanghai.
For the technical aspect, the RSI indicator is 39 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 failed to cross above the moving average, therefore the downside traction should persist. In conclusion, we think the market will be slightly bearish as the pair is heading to test the 1.2785 support. Sustained weakness below the aforementioned support would make the pair vulnerable to slide towards the next support, around the 1.2725 regions.
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