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U.S. stocks climbed Wednesday afternoon, recovering some of their losses after major stock indexes fell, as worries about inflation and global growth added to further volatility in risky assets. The S&P 500, Dow Jones, and Nasdaq rose about 1 % during the session. On Tuesday, the S&P 500 fell 2.8 percent, the biggest drop in seven weeks, with technology shares especially slammed. The Nasdaq Composite Index dropped 4 percent to 12,490.74, its lowest level since December 2020. The S&P 500 is heading for a monthly decline of 7.8%, with only three trading days left in April.

Facebook’s main social network added more users than projected in the first quarter, potentially staving off concerns that the company is losing momentum as a new generation flocked to younger sites like TikTok.

Revenue for the period jumped 6.6% to $27.9 billion and would have been higher if not for the war in Ukraine, the company said. The stock had dropped almost 50% this year as investors became increasingly worried that Meta’s main business and profit engine — advertising in its social media feeds — was losing steam.

Still, many of Meta’s challenges remain. Tik-Tok, owned by China’s Byte Dance Ltd., is providing serious competition for young users’ attention. At the same time, changes to data-collection rules on Apple Inc.’s iPhones have hindered Meta’s ability to serve users’ targeted ads. Last quarter, Meta executives said the privacy changes would reduce the company’s 2022 sales by $10 billion. Advertisers have also been spending less due to issues with supply chains, inflation, and the ongoing war in Ukraine, Meta executives said.

Main Pairs Movement

The U.S. dollar returned to the top of the G10 daily performance chart, meanwhile, the trade-weighted U.S. dollar index (DXY) hit a new 5-year high. The DXY rebounded to 103.00 for the first time since January 2017, peaking near 103.30 before falling back and stabilizing around that figure as U.S. trade closed.

The bank of Japan will announce its latest monetary policy decision and new economic forecasts during the upcoming Asia-Pacific conference, and any dovish sentiment is likely to exacerbate the yen’s latest decline. USD/JPY rallied more than 100 pips, from 127.00 to 128.30.

AUD/USD and USD/CAD were both flat around the 0.7120 and 1.2820 levels respectively, while NZD/USD fell again by 0.3% below 0.6550 and GBP/USD declined again by 0.2% below 1.2550 but support at 1.2500. The pound’s better performance may be due to a series of recently released data on the U.K. economy and government borrowing that has sparked new concerns about the country’s economic outlook and the prospect of tighter Bank of England policy. mIn terms of other underperforming G10 currencies, the EUR/CHF depreciated 0.8% and 0.7% against the dollar.

Technical Analysis

USDJPY (4-Hour Chart)

After two consecutive days of decline, USDJPY regains traction on Wednesday, boosted by a combination of factors, including the Fed- BoJ monetary policy divergence. Technically speaking, USDJPY turns into its bid tone through the mid-European session on Wednesday after hitting a one-week low and the support level at 127.48. The bullish pullback brings USDJPY back to the positive territory, above the ascending trend-line. The upside momentum is expected to keep on if USDJPY is able to finish above the trendline by the end of the day; then, as the RSI has not yet reached the overbought territory, USDJPY has room to extend further north toward 129.40, the next hurdle.

Resistance:  129.40

Support:  127.48, 126.30, 125.34

XAUUSD (4-Hour Chart)

Gold confronts a steeper decline after the breakout of the psychological support of $1900. The precious metal plunges hard as investors seem to weigh an aggressive US tightening cycle over the tension between Russia and Ukraine. From the technical perspective, though XAUUSD was attempting to bounce back toward the $1900 mark, the RSI indicator on the four-hour chart keeps pointing lower within the negative level, suggesting that any recovery attempts are likely to remain shallow. Furthermore, failure to rebound leads XAUUSD to trade further south, contesting the immediate support at $1889. On the flip side, bulls need to climb above $1916 to regain positive traction in the near- term.

Resistance: 1916, 1940, 1950

Support: 1889, 1877, 1828

GBPUSD (4-Hour Chart)

GBPUSD continues to plunge toward the psychological support of 1.2500 as the risk sentiment is providing a boost to the safe-haven US dollar. From the technical aspect, the downside seems to see no limit since last Friday after slipping below the old support of 1.2973. GBPUSD remains deeply bearish as the MACD is heavily located in the negative territory. Now, the support at 1.2500 acts as an important defended line; failure to defend the territory would vigorously strengthen the downside momentum. Further price action eyes on BoE Governor’s speech on Thursday.

Resistance: 1.2600, 1.2674, 1.2700

Support: 1.2500

Economic Data

Wall Street benchmark indices plunged on Tuesday, speeding up April’s sell-off on US equities as market participants weighed a flurry of corporate reports against inflationary pressures and worries over recession risks. S&P 500 closed the day by 2.8% lower, while Dow Jones slid around 800 points, resuming its losing streak after slightly rebounded on Monday. The tech-heavy Nasdaq Composite nosedived nearly 4%, being its third-biggest drop of the year and marking its lowest close since December 2020.

Russia will cut off the gas to Poland and Bulgaria on Wednesday in a major escalation in the standoff between Moscow and Europe over energy supplies and the war in Ukraine.

Moscow is making good on a threat to halt gas flows to countries that refuse President Vladimir Putin’s new demand to pay for the fuel in rubles. The European Union has rejected the move in principle but now payment deadlines are starting to fall due, governments across Europe need to decide whether to accept Putin’s terms or lose crucial supplies — and face the prospect of energy rationing.

European gas prices surged as much as 17% as traders calculated the risk of other European countries being hit next.

“This is a turning point that has been accelerated by Russia today,” said Piotr Naimski, Poland’s top official for strategic energy infrastructure. The threat of cutoffs has been looming for weeks, but there was an indication last week that the EU was suggesting a potential way out of the standoff. The move against bloc members Poland and Bulgaria probably makes some kind of compromise less likely. It also removes from the EU’s toolkit the option of sanctioning Russian gas.

The focus now turns to other European capitals, particularly Germany, which is heavily dependent on Russian gas. There was no immediate reaction from Berlin.

Main Pairs Movement

Forex trading continues to be dominated by risk-off funds. Recently, China’s blockade risk, the ongoing Russia-Ukraine war, deteriorating global growth prospects and aggressive monetary tightening by many major central banks have all weighed on market sentiment.

USD/JPY started to pull back from last week’s high above 129.00 to around 127.00 and EUR/JPY hit 135.00 in two weeks. Meanwhile, GBP/JPY extended its three-day decline from last week’s highs above 168.00 to nearly 5.0%. The US Dollar Index (DXY) hit a new high at 102.30, driven by declines in the Euro and the British Pound, the two worst performers among the major G10 currencies.

The other major G10 currencies such as AUD, NZD, and CAD all outperformed GBP, each falling around 0.6% against the USD on the day, with losses cushioned by higher energy prices due to geopolitical tensions.  AUD/USD pair dropped to an intraday low around 0.7130 and NZD/USD fell under 0.66, back to the 11-week low area.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY edges lower for the second successive day, dropping to a weekly low on Tuesday. The risk-off mood seems to benefit the JPY and favor bearish traders for USDJPY at the moment; however, the divergent monetary policies between the Fed and the BOJ should limit losses. From the technical perspective, the near-term outlook of USDJPY looks bearish, given the overnight breakthrough and an ascending trend line. At the same time, the RSI has not yet reached the oversold territory. Hence, some follow-through selling would set a stage for an extension of the corrective pullback. On the flip side, the level at 127.41 now acts as an immediate resistance ahead of the ascending trend- line and the 60 Simple Moving Average now also acts as a pivotal point for short-term traders.

Resistance:  129.40

Support:  127.41, 126.30, 125.34

USDCAD (4-Hour Chart)

USDCAD rallies from the daily swing low, and shoots above the 1.2800 regions. The US dollar continues to benefit from the bet for a more aggressive monetary policy by the Federal Reserve, boosting the US dollar to the highest level since 2020. Technically speaking, Monday’s downfall was seen as a fresh trigger for bullish traders. The outlook retains its upside momentum following the retreat from the pivotal support near 1.2700. At the time of writing, the acceptance level above the current hurdle at 1.2800 would give USDCAD another support prospect for a further appreciating move; however, the upside momentum might see limitation as the RSI has nearly reached the overbought territory, suggesting a technical correction.

Resistance: 1.2800, 1.2900

Support: 1.2700, 1.2587, 1.2461

GBPUSD (4-Hour Chart)

GBPUSD slumps further south below 1.2700 on Tuesday following the escalating fears over supply-chain issues ramping up global inflation with the lockdown in China. From the technical perspective, GBPUSD has met fresh selling pressure, breaking through the psychological support at 1.2700. At the moment, GBPUSD trades near the 1.2600 level, the lowest level since July 2020. Despite the RSI indicator on the four-hour chart suggesting a potential recovery, the bearish momentum seems to continue taking control. At the moment, GBPUSD needs to clear the static resistance that seems to have formed at 1.2674 in order to take its recover.

Resistance: 1.2674, 1.2700, 1.2800, 1.2730

Support: 1.2600

Economic Data

U.S. equities advanced on Monday, reversing earlier losses in the day amid worries about an escalating COVID outbreak in China added to jitters over U.S. economic growth, not to mention the surging inflation and Fed policy tightening. S&P 500 went up 0.6% to reach 4,296.12. Dow Jones climbed more than 200 points, or 0.7%, to close the day at 34,049.46, and Nasdaq Composite rallied 1.3% to close just above 13,000. U.S. stocks bucked the trend of global equity markets, with the major stock indices in Europe and Asia declining significantly on Monday.

Well-known billionaire Elon Musk agreed to buy Twitter Inc. for $44 billion, using one of the biggest leveraged buyout deals in history to take private a 16-year-old social networking platform that has become a hub of public discourse and a flashpoint in the debate over online free speech.

Investors will receive $54.20 for each Twitter share they own, the company said in a statement Monday. The price is 38% more than the stock’s close on April 1, the last business day before Musk disclosed a significant stake in the company, sparking a share rally.

Musk, one of Twitter’s most-watched users with more than 83 million followers, began amassing a stake of about 9% in January. By March, he had ramped up his criticism of Twitter, alleging that the company’s algorithms are biased and feeds cluttered with automated junk posts. He also suggested Twitter’s user growth was inflated by bots. After rejecting an invitation to join the company’s board, on April 14 he offered to take Twitter private, saying he’d make the platform a bastion of free speech and dropping other hints about the changes he’d make as an owner.

The ideas verged from the practical — say, letting users edit tweets and combating the spread of bots — to the peculiar, such as a proposal to turn the company’s San Francisco headquarters into a homeless shelter.

Main Pairs Movement

Despite an impressive recovery of the US equities, the sentiments in the forex markets on Mo remained risk-off, with traders citing China lockdown concerns as the major driver. Amid a sharp pullback in global bond yields, as traders reassessed global growth prospects amid the rising risk of a wider shutdown of the world’s second-largest economy, the rate-sensitive safe-haven yen was the best performing G10 currency.

USD/JPY now trades around the 127.50 area, more than 1.5% below last week’s multi-decade highs above 129.00. The safe-haven US dollar also benefited as a result of risk-off flows and was the second-best performing major G10 currency, with the Dollar Index (DXY) hitting fresh highs in March 2020 in the upper 101.00s.

On the other hand, GBP/USD at one point plummeted under 1.2700 for the first time since September 2020 and was last seen down 0.7% in the 1.2740s, while EUR/USD dropped a similar percentage just above 1.0700 and also at fresh multi-month lows. Any Euro relief in wake of French President Emmanuel Macron’s re-election was no longer last.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY witnessed some selling pressure on Monday despite the downside still lacking bearish conviction. The Japanese Yen seems to benefit from the prevalent risk-off mood, driving some safe-haven flow. Technically speaking, on the four-hour chart, USDJPY remains upside as it stays above the bullish trendline. At the time of writing, bulls are trying to defend their ascending trendline and the support level at 127.41 from the intraday decline. As the RSI reading is still far from oversold, a convincing breakthrough of the trendline should pave the way for deeper losses and bring USDJPY toward further south 126.30. On the flip side, if the dollar succeeds to defend the trendline and the support level at 127.41, then it might be able to attract some fresh buying interests.

Resistance:  129.40

Support:  127.41, 126.30, 125.34

AUDUSD (4-Hour Chart)

The Australian dollar underperforms amid China’s lockdown from its “zero- Covid” policy. The underperformance of the Aussie drags AUDUSD to the lowest since late February. From the technical perspective,  the outlook of AUDUSD stays bearish, turning more downside, as the pair has traded further south below the descending trendline. At the moment, the downside looks limited before breaking the next support at 0.7093 as the RSI indicator has reached the oversold territory, suggesting any attempted recovery move. However, AUDUSD might need to climb above 0.7277 in order to gain some follow-through buying as beyond the 0.7277 resistance might be able to neglect the negative bias in the near- term.

Resistance: 0.7170, 0.7227, 0.7372

Support: 0.7093

GBPUSD (4-Hour Chart)

GBPUSD crashes through 1.2750, heading toward 1.2700, the psychological support. From the technical aspect, the outlook of GBPUSD stays intensely bearish of the fact it falls below the major psychological support at 1.3000 last week. At the moment, there are no major support levels between 1.2700 and 1.2500 aside from the September 2020 low of 1.2674. The downside of GBPUSD might show some slowdown as it is trading in oversold territory. The market mood, however, needs to turn neutral before GBP sellers decide to book their profits.

Resistance: 1.2800, 1.2730, 1.3002, 1.3077, 1.3143

Support: 1.2700, 1.2674

Economic Data

U.S. stocks plummeted Friday afternoon to close out another week in the red as investors weighed a bevy of corporate earnings and braced for more aggressive monetary tightening by the Federal Reserve in coming months. S&P 500 plunged 2.8%, marking its second-worst day of the year, while Dow Jones wiped out 980 points in its worst day since October 2020. Nasdaq Composite tumbled 2.6% as well. The losses follow remarks from Fed Chair Jerome Powell at an IMF panel Thursday signaling a 50-basis point rate increase was “on the table” for May when the U.S. central bank holds its next policy-setting meeting. The Fed chair also reiterated that policymakers were committed to “front-end loading” inflation-fighting efforts.

The victory of Emmanuel Macron in France’s presidential election should be a relief for investors worried that a Marine Le Pen win would roil European markets. The euro, French bonds, and shares from the nation’s banks are among the assets that should benefit from Macron’s win for a second term, according to money managers. The euro rose as much as 0.6% against the dollar in early Asia trading, before trimming its advance to about 0.2% as of 7:48 a.m. in Hong Kong.

The risk of a victory by far-right nationalist and eurosceptic Le Pen had been keeping investors on edge, with some predicting European assets could suffer a selloff comparable to the euro crisis or Brexit.

“European investors are partying after the French exit polls: a potential black Monday is definitely averted,” said Fabio Caldato, a partner at Olympia Wealth Management.

Macron won 58.55% of the votes in Sunday’s runoff compared with 41.45% for Le Pen, according to the French Interior Ministry website. The nationalist leader conceded defeat in a speech to her supporters in Paris.

Main Pairs Movement

The US Dollar’s (via the DXY Index) strong run continued through the third week of April, adding another +0.62%. The DXY Index has been positive in 12 of the 16 weeks thus far in 2022, good for a +5.69% YTD. The Euro pair, which spent most of the first four days of the week in positive territory, ended up down by -0.11%. Cable dropped by -1.71%, its worst weekly performance since June 2021. USD/JPY added +1.69%, their seventh consecutive weekly gain.

The narrative behind the US Dollar’s ascent has remained consistent for much of this year: the Federal Reserve is on the verge of a series of significant rate hikes – just look at some of the recent comments by FOMC members – while other major central banks are not. Widening interest rate differentials are propping up the US Dollar, plain and simple.

Commodity-linked currencies also plummeted significantly amid the easing crude oil prices and the broader greenback strength. Aussie dropped the most, down 1.73% Friday. Kiwi slid by 1.46%, and Loonie surged by 1.05%. Gold closed Friday at 1,932.35, down around $20 per troy ounce during the intraday trades. Crude oils gave back all their Thursday’s gains, with WTI trades at $100.40, and Brent at $104.40.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY posts back-to-back gains heading toward 129 at the time of writing despite falling US Treasury yields and a risk-off market mood. During the US Fed Minutes, Powell added that the US Fed would not count on the supply side healing to help inflation, implying that the Fed is going to focus on the demand side. From the technical perspective, the intraday bias of USDJPY remains aggressively bullish as it continues to trade well above the bullish trendline. At the same time, the pair seems to trade along with the 20 Simple Moving Average, behaving as a support pivot. The RSI indicator steadily hovers within the positive levels, some follow-through buying interests are expected to boost USDJPY toward the next hurdle at 129.4043.

Resistance:  129.40

Support:  127.41, 126.18, 125.18

AUDUSD (4-Hour Chart)

AUDUSD witnessed heavy selling pressure for the second consecutive day on Friday, tumbling to its lowest level since March. From the technical aspect, the bearish outlook is reinforced by the fact that AUDUSD has breached the descending wedge, setting the stage for a further depreciating move toward the next support at 0.7227. The oversold RSI reading seems to not be able to stop the current selling pressure. AUDUSD might need to climb above 0.7372 to regain and attract more buying interest.

Resistance: 0.7372, 0.7432, 0.7471, 0.7536

Support: 0.7277

GBPUSD (4-Hour Chart)

GBPUSD plunges to 18- month-old fresh lows around 1.2820 amid weak UK data and the US Fed’s continuously hawkish comments. Technically speaking, the outlook of GBPUSD on the four-hour chart remains heavily bearish following Friday’s sharp plummet, further breaking the bearish wedge. The RSI indicator fell well below the oversold territory on the four-hour chart; even though the oversold condition might suggest that GBPUSD could stage a pullback correction, buyers are likely to stay on the sidelines until GBPUSD climbs back above 1.3002. On the downside, the next target aims for psychological support at 1.2800, followed by 1.2730, the support level from October 2020.

Resistance: 1.3002, 1.3077, 1.3143

Support: 1.2800, 1.2730

Economic Data

U.S. stocks fell Thursday as investors continued to monitor a steady stream of corporate earnings results against a backdrop of elevated inflation and further Fed policy tightening. S&P 500 dropped and erased earlier gains. Dow Jones also turned lower. Nasdaq fell more than 2% and extended Wednesday’s losses when the tech-heavy index was weighed down by a slide in shares of Netflix. Meanwhile, Tesla’s (TSLA) shares rose after the electric vehicle-maker handily exceeded expectations in its fiscal first-quarter results.

After weeks of questions over whether Elon Musk is truly serious about acquiring Twitter Inc., his takeover bid got a lot more real on Thursday. The Tesla Inc. mogul lined up about $25.5 billion in debt financing from Morgan Stanley and other financial institutions, according to a regulatory filing, as well as pledging to contribute an additional $21 billion of his own money through equity financing.

Though details are still scarce on how the billionaire will fund his share of the bid, it was a show-me-the-money moment that signaled Musk isn’t just trolling Twitter with his takeover interest. The move capped a whirlwind 17 days since Musk announced he had acquired a stake of more than 9% in Twitter — becoming its largest shareholder — before turning down a board seat and launching a hostile bid for the company.

Through it all, it’s been hard to tell whether Musk would follow through on his offer. Musk is a prolific tweeter — posting a mix of memes, questions, and barbs — and has vowed to turn Twitter into a bastion for free speech. But a previous claim that he had secured funding to take Tesla private, an episode that drew a lawsuit from the U.S. Securities and Exchange Commission, has cast a shadow over his Twitter bid.

Main Pairs Movement

Risk-off trading conditions, triggered in part by a rise in the US yields amid hawkish Fed rhetoric and saw the safe-haven US dollar outperform, especially against commodity-linked currencies like the Australian, and New Zealand, with respective losses of 1.0% and 1.1%. The US Dollar Index (DXY) reversed an earlier dip below the 100.00 level to rally back into the 100.60s, where it trades with on-the-day gains of about 0.3%.

Fed Chair Jerome Powell, as expected, signaled that 50 bps rate hikes at upcoming meetings were likely and the usually more dovish leaning FOMC member Mary Daly even mentioned the possibility of a 75 bps move. The rate-sensitive euro and sterling plummeted right after Powell’s talks, and USD/CAD rallied from under 1.2500 to the 1.2600 mark, as stronger oil prices failed to offer the loonie respite.

Meanwhile, higher yields in the US (and elsewhere) saw the yen struggle, though albeit perform a little better than its risk-sensitive peers amid safe-haven demand as stocks fell. USD/JPY gained about 0.4% to rally into the 128.30s, with the bulls eyeing a potential retest of earlier multi-decade highs above 129.00 if US yields keep pushing higher and the BoJ keeps reiterating its dovish stance and defending its yield curve control target range.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY attracts some dip-buying buyers near the 20 Simple Moving Averages on Thursday. The US dollar is back to the bullish move following the hawkish comments from the US Fed. Technically speaking, the overnight sharp corrective pullback creates a parabolic rise for the pair, suggesting to attract more buying interest. The outlook of the USDJPY remains aggressive bullish as it continues trading within the ascending trendline and above the moving average. In the meantime, the RSI remains at the positive levels and has not reached the overbought territory, providing USDJPY room to extend further north.

Resistance:  129.4

Support:  127.41, 126.18, 125.18

AUDUSD (4-Hour Chart)

AUDUSD slides heavily toward 0.7370, erasing most of the gain from this week. From the technical perspective, AUDUSD turns downside and heads toward the next support pivot at 0.7372. The double top formation seems to be a convincing pattern for the pair to break below the support for a further near-term depreciating move. Failure to defend 0.7372 would reinforce by the fact that AUDUSD would trade within the bearish triangular wedge, accelerating the downside momentum toward 0.7277. Moreover, the RSI has not yet reached the oversold territory and currently clings within the negative levels, thus AUDUSD still has room to drop further south. 

Resistance: 0.7432, 0.7471, 0.7536

Support: 0.7372, 0.7277

EURUSD (4-Hour Chart)

The eurodollar gained strength against the US dollar earlier today as investors welcomed the hawkish comments from the ECB; however, EURUSD accelerates its slump toward 1.8050, erasing most of the gain in the US trading session. From the technical perspective, EURUSD faces a substantial resistance at 1.0932, failing to break through the level. On the four-hour chart, EURUSD retreats and turns lower after the RSI hits near overbought readings, but still holds within the positive levels. Moreover, the pair is still on the track to attracting buying interest as it stays above the 20 and 50 Simple Moving Averages, temporarily limiting the bearish potential of the pair.

Resistance: 1.0932, 1.1039, 1.1126

Support: 1.0758

Economic Data

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U.S. equities closed mixed Wednesday as investors took in a host of quarterly earnings results and looked ahead to more data. The Dow gained to extend advances from the previous session. The S&P 500, and the tech-heavy Nasdaq Composite underperformed as Netflix (NFLX) shares slumped after the company posted an unexpected decline in quarterly subscriber numbers. The streaming giant posted its worst day since 2004, with the stock down just over 35% by the end of the trading day.

Tesla Inc. reported better-than-expected first-quarter results, underpinned by strong demand for its electric vehicles, with Elon Musk predicting the output will grow at a fast pace for the rest of the year despite supply-chain challenges.

The first major U.S. automaker to report financial results for the first three months, Tesla easily beat estimates with a record profit. It cautioned that production remains constrained by shortages and higher prices for key components, a common refrain for automakers due to global bottlenecks in supplies of parts such as semiconductors.

But CEO Musk said Tesla should be able to make up for any production shortfalls in the first half of the year from pandemic shutdowns at its factory in Shanghai and is on track to expand production to more than 1.5 million vehicles this year. It delivered about 936,000 cars in 2021.

“We may pull a rabbit out of the hat,” Musk said on a conference call Wednesday. “Q3 and Q4 will be substantially higher.”

Main Pairs Movement

The US dollar succumbed to profit-taking on Wednesday as US yields pared back from multi-year highs, burnishing the greenback’s investment appeal somewhat. The US Dollar Index (DXY) slid back 0.6% to the low 100.00s having hit its highest levels since March 2020 above 101.00 on Tuesday, weighed primarily by downside in USD/JPY as the yen received some overdue respite.

USD/JPY dropped just over 0.8% on the day to back under the 128.00 level, more than 1.2% below intra-day multi-decade highs at 129.40 hits earlier in the session. But at current levels near 127.75, the pair still trades over 1.0% higher on the week and over 5.0% higher on the month, with little sign of a more meaningful yen rebound unless the BoJ signals some sort of policy stance shift.

The euro and sterling gained some ground against the US dollar counterpart on Wednesday, with decent Eurozone Industrial Production figures and hawkish ECB chatter about a potential July hike boosting the euro. However, the main driver of EUR/USD’s 0.6% recovery to the 1.0850 area and GBP/USD’s 0.5% rebound to above 1.3050 were probably the broad dollar weakness.

The commodity-linked currencies were notable outperformers on Wednesday. AUD/USD jumped about 1.0% to near 0.7450, NZD/USD gained about 1.0% to reclaim 0.6800 and test its 50-Day Moving Average at 0.6813, and USD/CAD dropped to two-week lows under 1.2500.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY heads south after surging toward 129.00 earlier today; the more- than 2.5% drop in the US 10- year yield seems to be weighing on USDJPY on Wednesday. Technically speaking, USDJPY remains bullish on the four-hour chart despite the sharp decline on Wednesday. The 100% Fib. The Retracement level at 129.4 looks to be a static resistance as the pair confronts a technical correction after hitting the resistance. At the time of writing, USDJPY is heading toward the immediate support at 127.41; failure to defend the level will make USDJPY turn downside in the near- term due to falling below the 20 SMA. To the upside, as long as the pair can stay above the ascending trendline, the outlook of USDJPY would remain bullish.

Resistance:  129.4

Support:  127.41, 126.18, 125.18

AUDUSD (4-Hour Chart)

AUDUSD recovers to strong intraday gains around 0.7430, just a few pips below the weekly high. From the technical perspective, the outlook of AUDUSD turns positive on the four-hour chart following the breakout of the descending triangular trendline. In the meantime, the breakthrough of the resistance level at 0.7432 brings the pair to near-weekly highs. The acceptance above the next immediate hurdle at 0.7471 will re-confirm AUD’s bullish tone; at the same time, trading above the level would possibly attract some follow-through buying. As the RSI indicator has not yet reached the overbought territory, there are rooms for AUDUSD to trade further north while the MACD has turned positive today.

Resistance: 0.7471, 0.7536

Support: 0.7432, 0.7372

EURUSD (4-Hour Chart)

EURUSD regains traction, climbing above 1.0850 as the US dollar weakens against its rival currencies following the more- than 2.5% decline in the US 10- year yield. From the technical perspective, EURUSD heads positively for a second consecutive day but is still far from turning bullish overall. However, as the pair has finally traded above its 20 and 50 SMAs, EURUSD turns upside in the near- term. The pair is expected to head toward the next immediate hurdle at 1.0932 as the RSI indicator has not reached the overbought territory and is currently located within the positive level, giving EURUSD room to extend further north.

Resistance: 1.0932, 1.1039, 1.1126

Support: 1.0758

Economic Data

US equities climbed Tuesday, recouping some of the week’s losses as investors sifted through a barrage of quarterly reports for signs of how corporate America fared against the backdrop of Eastern Europe’s war and mounting inflationary pressures. The S&P 500 increased by 1.6 percent to its highest level in a month, while the Dow Jones Industrial Average closed 500 points higher. The Nasdaq Composite, which is heavily weighted toward technology, extended gains to 2.2 percent after finishing at a one-month low on Monday, along with the S&P 500.

Netflix Inc. has hit a brick wall following a decade of spectacular growth that rocked Hollywood to its core.

According to a statement released Tuesday, the streaming service lost 200,000 users in the first quarter, the first time since 2011. Additionally, Netflix anticipates losing another 2 million users in the current second quarter, putting the business on track to have its worst year as a public company.

Investors, analysts, and Hollywood executives had anticipated Netflix would announce a slow start to the year, but Wall Street expected the company to add 2.5 million members. The shares, which had already fallen more than 40% this year, fell as much as 24% to $265.11 in after-hours trading.

Netflix management cited four possible explanations, including the widespread usage of password sharing and increased competition. The corporation claims that 100 million households utilize its service without paying for it, in addition to its 221.6 million paying customers. The corporation is experimenting with different methods of registering such viewers.

“Our relatively high home penetration – when combined with the vast number of families that share accounts – combined with competition is causing headwinds for revenue growth,” management noted in a letter to shareholders.

Main Pairs Movement

The Japanese yen was hammered on Tuesday as rising global bond yields increased pressure on G10/Japan interest rate differentials, reducing the attractiveness of the low-yielding safe-haven currency as an investment. Needless to say, the yen was the worst-performing major G10 currency, with USD/JPY soaring about 1.4 percent to its highest level since early 2002 in the upper 128.00s.

EUR/USD and GBP/USD both traded roughly flat near 1.0800 and 1.3000, respectively, despite the return of normal European flows following Monday’s Easter holiday closures. On Tuesday, relevant fundamental data, as well as updates on the Russia-Ukrainian war, were scarce, resulting in lethargic trading conditions.

Finally, the antipodes remained rather calm. The Australian dollar is a minor G10 outperformer following Tuesday’s slightly hawkish RBA minutes release, in which the bank underlined elevated projected inflationary pressures and suggested an early rate hike. The AUD/USD pair recovered roughly 0.4 percent to the 0.7375 regions, having rallied off the 0.7340s 50-Day Moving Average. Meanwhile, NZD/USD traded flat at around 0.6730, remaining near to the more than one-month lows reached on Monday at just around 0.6700.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY surges toward 128.80 on Fed-BOJ divergence, following the US Fed, which is more aggressive and hawkish while the BOJ is positive on a weak Japanese Yen. From the technical perspective, the outlook of USDJPY is certainly positive and bullish as it continues to trade aggressively above the ascending trendline. Despite the RSI indicator being way overbought, the fundamental point of view outweighs the technical indicator. On the flip side, USDJPY needs to decline below 125.74 in order to calm the current bullish momentum; any meaningful declines might attract some sellers for a technical correction.

Resistance:  128.91

Support:  126.95, 125.74, 124.750

XAUUSD (4-Hour Chart)

Gold is down on Tuesday, trading at around $1,955 after hitting nearly $2,000 per ounce on Monday. The demand for gold declines as the greenback is on the back of hawkish comments from the US Fed, saying that the possibility of a 75 bps interest rate hike. From the technical perspective, in the four-hour chart, chances are on the downside as the price has dropped below the bullish trendline and the midline of the Bollinger band. In the meantime, the RSI indicator has not yet reached the oversold territory, currently at 36 readings, meaning that the deportation of bulls is possible. A bearish continuation could be expected on a break below the support at $1,950.

Resistance: 1975. 2001

Support: 1950, 1916

EURUSD (4-Hour Chart)

EURUSD clings to a small recovery near 1.0800 on Tuesday after reaching near multi-month lows. Technically speaking, the outlook of the EURUSD remains on a bearish path; in the four-hour chart, despite turning positive intraday, EURUSD is still far below the bearish moving averages. At the same time, the RSI indicator remains within negative levels while the MACD continues to hover around the negative territory, suggesting that EURUSD remains pressured. In order to regain traction in the near- term, EURUSD at least needs to climb above the 20 SMA, then aims for the next hurdle at 1.0932. Otherwise, today’s positive move could be viewed as a technical correction.

Resistance: 1.0932, 1.1039, 1.1126

Support: 1.0758

Economic Data

Dear Client,

To provide a more favorable trading environment to our clients, VT Markets will modify the trading settings of these Indices at the following time:

1. The leverage of ES35 and SA40 will be 200:1.
2. The trading time of FRA40 will be 01:00 – 24:00 (GMT+3)
3.The trading time of China50 will be 01:00 – 03:55,04:00 – 11:55,12:00 – 24:00 (GMT+3).

The modifications will be put into effect from 2022/04/25.

Note: The above data is for reference only. The actual execution date may be changed. Please refer to the MT4/MT5 software for details.

Friendly reminders:
1. All specifications of Indices remain the same except leverage and trading time.
2. Open positions of Indices can be kept after the modifications.
3. Margin levels might be affected by the modifications.
Please ensure sufficient funds in your trading account to keep holding your open positions.

If you’d like more information, please don’t hesitate to contact [email protected].