Daily Market Analysis

Market Focus

US equity markets were roughly positive as stocks rose toward another record as traders shifted attention away from inflation and focused on prospects for an economic rebound, resulting in a decline in US Treasury yields and a decline in the US dollar index. Equity market kept up its momentum and continued to surge from March 2020 lows to approx. 85% as the Federal Reserve reassured markets that the fed policy will remain supportive. All told, the Dow Jones Industrial Averages rose about 297.03 points; the Nasdaq climbed 0.5% while the S&P 500 gained 0.8%.

Joe Biden plans to request $715 billion USD for his first pentagon budget, generating concerns over how these funds would be spent. The $715 billion budget is roughly 1.6% higher than the $704 billion enacted for this year. This difference has launched the concern over the real terms adjusted for inflation.

US- China tension continues to edge up after the US Commerce Department added seven more Chinese supercomputing companies to a US economic blacklist citing national security considerations. Companies that are being blacklisted include Tianjin Phytium Information Technology, Shanghai High-Performance Integrated Circuit Design Center, Sunway Microelectronics, the National Supercomputing Center Jinan, the National Supercomputing Center Shenzhen, the National Supercomputing Center Wuxi, and the National Supercomputing Center Zhengzhou. US has complained that those Chinese companies are beholden to China, and at the same time collect sensitive information on the behalf of Chinese military.

Market Wrap

Main Pairs Movement:

WTI continued to trade in the range of $59- $60. In the near- term, as the pandemic has accelerated in some key developed countries and also some countries in Europe, like Germany, the darkening of the near- term oil demand outlook has been reflected in downwards revision.

The British Pound struggled around 1.37 against the US dollar on US dollar strength and covid concerns. The US dollar rebounded from dovish Fed- induced blow. On the UK insight, as the UK will take the next step in tis gradual easing of restrictions, the economic recovery focuses on the response of households to the reopening; as a result, the uncertainty has weakened the British Pound.

USDCAD dropped to daily lows below 1.2540 after a strong Canadian jobs report. The Canadian dollar gained strength as the monthly data published by Canada showed that the unemployment rate in March dropped to its lowest level since the beginning of the pandemic at 7.5%.

Technical Analysis:

EURUSD (Four- Hour Chart)

The euro dollar markethas has retreated from nearly high, trading at 1.1904 level as of writing, amid 10 year Treasuries yields pick up whilst U.S. share market went smoothly. For RSI perspective, indicator set 62 figures which suggest a bullish trend at least for short run, despite correction today. On moving average side, 15 and 60-long indicator remained upward trend that short one was getting flat movement after market whipsaw.

Integrity our perspective and follow our anticipant from yesterday, we expect market will sucessively move neutral or consolidation at currently range. We foresee the consolidation range will be 1.1871 as lower bound and 1.1941 as upper bound which stand for first pivot support and resistance, respectively.

Resistance: 1.1941, 1.198

Support: 1.1871, 1.1796, 1.1705

GBPUSD (Four-Hour Chart)

GBPUSD extends further south toward 1.37090 after breaking below the support level at 1.3749 on the four- hour chart. The pair continues to show bearish tendency as it steadily trades below the midline of the Bollinger Band and the 20 SMA. Furhtermore, the technical indicators, the RSI is above the 30 level outside oversold territory while the MACD still shows a sign of lending the support to bears. GBPUSD is expected to head toward the next support at 1.3670.

Resistance: 1.3749, 1.3797, 1.3836

Support: 1.3670

XAUUSD (Daily Chart)

After clinging on the resistance level of $1746.91, Gold eventually breaks above the obstacle. On the daily chart, a double bottom pattern has been formed, indicating a buy and bullish signal. As the time of writing, former resistance $1746.91 now acts as a strong support pivot, possibly pushing gold toward the next resistance at $1790.23. Moreover, the MACD continunes to lend support to bulls whilst the RSI has not yet reached the overbought territory, giving gold more room to extend further north.

Resistance: 1790.23, 1825.24, 1860.26

Support: 1746.91, 1676.89

Economic Data

Daily Market Analysis

Market Focus

Stocks climbed as Federal Reserve Chairman Jerome Powell said the central bank has the tools to curb any inflation pressures, which are expected to be temporary as the economy reopens.

The S&P 500 notched a fresh record amid slow trading. Volume on U.S. exchanges remained under 10 billion shares, hitting another low for the year. The Nasdaq 100 outperformed major equity benchmarks as giants such as Apple Inc. and Tesla Inc. rallied. Energy producers and banks retreated. Treasuries rose, while the dollar fell.

One day after the Fed’s March minutes struck a dovish tone for the path of monetary policy, Powell said the central bank would react if inflation expectations started “moving persistently and materially” above levels officials are comfortable with. He also noted that disparate efforts to vaccinate people globally is a risk to progress for the economic rebound, which remains “uneven and incomplete.”

Meanwhile, Fed Bank of St. Louis President James Bullard said it’s too soon for central bankers to discuss tapering asset purchases as long as the pandemic continues. Data Thursday showed applications for U.S. state unemployment insurance unexpectedly rose for a second week, underscoring the choppy nature of the labor-market recovery.

Market Wrap

Main Pairs Movement:

The dollar retreated with U.S. Treasury yields as Federal Reserve Chairman Jerome Powell said that inflation is not expected to surge out of control and the central bank would take steps to curb it, if necessary. The yen touched the highest level in two weeks on the back of falling yields.

Among G-10 currency peers, the Swedish krona and franc topped counterparts, while the Norwegian krone lagged all. USD/JPY -0.6% to 109.25; fell as much as 0.8%, the most since November; yen earlier hit a session high of 109.90. USD/JPY volatilities are lower across tenors. AUD/USD +0.5% to 0.7649; climbed as much as 0.6% to 0.7660.

Technical Analysis:

EURUSD (Four- Hour Chart)

The euro dollar once hit nearly two-week peak at 1.1925 then tweak down slighty, trading at 1.1913 as of writing. For Moving Average perspective, euro creep up alongside the 15-long SMAs since golden cross days ago whilst 60-long SMAs indicator pick up accelerately. For RSI side, indicator approach to 72.8 figures which suggest a over bought sentiment at current stage.

We expect that recently soared up has enacted a short squeeze which wipe out the short position momentum. Therefore, we believe market will toward to netural or consolidation movement in short term. On up way, we see first resistance at 1.194 if market move consolidation. Subsequently, pivotal resistance will at 1.199 if market beef up further which is entrenched by shoulder level of head pattern in early this year

Resistance: 1.1941, 1.19

Support: 1.1877, 1.1796, 1.1705

GBPUSD (Four-Hour Chart)

At the time of writing, sterling is trading at 1.3734 after it weathered a whipsaw movement intraday. At the meantime, the greenback traded near it lowest in two weeks versus major peers which accord with 10 year Treasuries yield tamp down. On RSI side, indicator shows 37 figure which suggest a bearish outlook at least for short run. Other than this, we see 15-long SMAs has death cross 60-long SMAs.

Therefore, we expect the market will extend it bearish momentum as integrate the suggestion from inidcators. On slid side, first support will be 1.3718 as in spade price cluster in that level, 1.3678 following as last lowest point.

Resistance: 1.377, 1.3848

Support: 1.3718, 1.3678

XAUUSD (Four-hour Chart)

Gold has hand over the fist to breakthrough a tiny range consolidation to higher stage against yesterday slightly movement, trading at 1756.77 level which breached one month high. On RSI side, indicator has reached 73 figure as of writing, suggesting a over bought sentiment. On the other hand, 15 and 60-long SMAs indicator are both retaining the ascending trend after golden cross days ago.

Currently, we expect the gold market will high probability cool off the edge up movement in short term as it relatively have a too strong momentum. However, for long term perspective, it still have a prosperity on long side as it stand above the resistance of “W shape” pattern. On slid side, the critical support level at 1754 around need to be defended which stand for a shoulder level of “W shape” pattern.

Resistance: 1759.7

Support: 1754.5, 1737.7, 1678.85

Economic Data

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Daily Market Analysis

Market Focus

Stocks markets were a little green after the Fed Reserve refrained from signaling any changes to its bond- buying program, causing the dollar index advance. All told, the Dow Jones Industrial Averages climbed about 0.05%; the S&P 500 rose 0.15% while the Nasdaq crawled 0.28%. The credit markets are pondering over whether if yields are going up because the economic is reopening and massive real growth is expected or if yields are going up because of inflation. If it is the former one, the stock markets will not be bothered; however, if it is the latter one, there will be a problem for the economy, according to Jim Bianco, president of Bianco Research.

Key takeaways from the FOMC:

Treasury Secretary Janet Yellen unveiled a detailed pitch for Joe Biden’s new corporate tax code, planning to recoup $2 trillion in overseas profits. Yellen stated that a new tax code would be fairer to all Americans, removing incentives for companies to shift investments and profits abroad, and at the same time raising more money for critical needs at home. All told, the extra tax takes of about $2.5 trillion over 15 years would pay for Joe Biden’s eight- year infrastructure, green investments, and social program spending.

Asian stocks markets were mixed as Thailand and Hong Kong led declines while most other equity benchmarks advanced. Thailand SET index plunged the most amid a domestic surge in coronavirus infections. Restaurant and hotel shares led the decline as the Prime Minister mentioned that a tougher restriction would be imposed in an effort to fight the virus.

Market Wrap

Main Pairs Movement:

GBPUSD has slipped below 1.38, extending further south as US yields resume their gains. The pair fell more than 0.6% amid doubts about Boris Johnson’s plan to reopen the country. Moreover, despite of having upbeat data, GBPUSD seems to depend heavily on movements in US bond yields, resulting in a negative move in the pair today. On the other hand, optimism from the Fed Reserve poses a risk to GBPUSD’s gains.

Gold declines after the FOMC, provided no tailwinds for the metal. The Fed Reserve saw it taking some time before conditions would be met for scaling back massive monthly asset purchases. At the same time, investors continued fleeing from gold- backed exchange traded fund, showing a bearish sign. Gold has been under the downside pressure this year amid the increasing optimism over the post- pandemic economic recovery worldwide.

The US dollar index got lifted as the Fed Reserve have shown no rush to taper assets purchases; the Fed remained optimistic on the economic impact from fiscal stimulus and vaccinations. With these, the US 10-year yield rose about 1.4%, strengthening the US dollar index.

USDCAD climbed around 0.4% as the US dollar put options worth $750 million against the Canadian dollar at 1.26 strike price, which will expire on the 9^th of April.   

Technical Analysis:

GBPUSD (Four- Hour Chart)

The British Pound trades near daily low around 1.3737 against the US dollar as the time of writing. The bearish trend is mostly confirmed as GBPUSD has extended its slump below its simple moving averages. Moreover, the support level at 1.3749 has been broken, giving the pair more room to accelerate the bearish momentum. Furthermore, the technical indicators, the MACD maintains its downward strength, lending support to bears, whilst the RSI has not yet fully reached the oversold readings. As of now, the next target for GBPUSD is expected to be heading toward 1.3670, the next immediate support.

Resistance: 1.3749, 1.3798, 1.3838

Support: 1.3670

USDJPY (Daily Chart)

USDJPY continues to trade in the price range of 109.70- 110.97. The pair is in the stage of determing which side to go as it is currently testing the critical support level at 109.70, where the 20 SMA and the ascending trend cross. On the upside, if USDJPY fails to break though the support level, then it will bounce back to the bullish channel, suggesting a continuous positive move. To the downside, if USDJPY successfully breaks through the support, it is expected to accelerate the downside pressure toward the next support at 108.99; moreover, a near overbought RSI also lends support to bears. That being said, the pair needs to break below 109.70 to confirm another leg south.

Resistance: 110.97

Support: 109.70, 108.99, 107.77, 106.78

XAUUSD (Daily Chart)

Gold trades in a relatively tight range today on the day of FOMC, trading at $1740 as the time of writing. Gold once again clinges on the immediate resistance at $1746.91. In the near- term, bullish momentum is expected to happen, helping gold break through the resistance level as it is the 7^th time that gold retests the level. To the upside, the MACD indicator currently lends support to bulls whilst the RSI is still outside of the overbought region, giving gold a room to trade higher. Above $1746.91 and futher above the 50 SMA, gold will see a near- term base established for a deeper recovery to $1790.23, a fresh cap.

Resistance: $1746.91, $1790.23, $1825.24

Support: $1676.89

Economic Data

Daily Market Analysis

Market Focus

Stocks dropped in the slowest trading day of 2021 after a rally that drove the equity market to all-time highs. Treasuries climbed.

Volume on U.S. exchanges slipped below 10 billion shares for the first time this year. Tech companies led losses in the S&P 500 on Tuesday, offsetting gains in retailers. The Dow Jones Industrial Average and the Nasdaq 100 also retreated. Stocks tied to the Archegos Capital Management blowup ended the session higher as investors brushed news that Credit Suisse Group AG unloaded more than $2 billion of the shares in the latest block trades stemming from the liquidation of Bill Hwang’s fund.

Trading has slowed in recent days as investors grappling with wild rotations awaited the start of the earnings season. Traders bought stocks in record amounts in the first quarter of 2021 as a combination of generous stimulus and bets on an economic recovery drove $372 billion into global equity funds, according to Bank of America Corp. strategists. The data confirm the bullish market sentiment that has pushed shares to fresh highs, with optimism over vaccination efforts outweighing concern that higher bond yields can interfere with the rally.

On the economic front, data showed U.S. job openings rose to a two-year high in February, led by gains in some of the industries hardest hit during the pandemic. The International Monetary Fund upgraded its global growth forecast for the second time in three months, while warning about a divergence between advanced and lesser-developed nations.so far.

Market Wrap

Main Pairs Movement:

The dollar dropped with Treasury yields as traders pared back on expectations for Federal Reserve rate hikes seen after a solid U.S. jobs report last week. The euro touched a two-week high, while the franc and yen were among top performers in the Group-of-10 category as traders continued to unwind short positions held on the currencies in the first quarter.

EUR/USD +0.4% to 1.1865; touched highest since March 23. The euro volatility skew shifts to depict less bearish sentiment for the currency.

USD/JPY -0.3% at 109.85 amid fund and stop-loss sales; gamma from 110 strikes may slow drop.

Technical Analysis:

EURUSD (4 Hour Chart)

EURUSD extended it nearly bullish momentum to intraday high, trading at 1.1877 level. Apparently, euro got a significant correction from down side then toward to previously shoulder level of “M shape” pattern at 1.1877. On RSI side, indicator has breached into over bought area that close at 74 figure as of writing, suggesting a high posiblity of cool down movement against nearly market sentiment. On the other hand, 15-long SMAs has golden cross 60-SMAs base on 4-hour interval. Therefore, we expect euro dollar is still north ways space in recently short term. However, we believe 1.1877 level is a first vital resistance for whether will it extend pickup movement. If breakthrough the first resistance, next price level could eye on 1.1990. On the south way, 1.1790 is deemed the first defended level, 1.1705 following.

Resistance: 1.1877, 1.199

Support: 1.1792, 1.1705

USDJPY (4 Hour Chart)

Japan yen has successive second negative way as a it tamp down from head pattern like highlight retangle, trading at 109.73 while market close. Currently, weakness market move is driving 15-long SMAs to decending trend whilst 60-long SMAs remain strongly upward trend. For RSI perspective, indicator close at 33 figure as of writing, suggesting a bearish movement for short term. In the lights of the bleak suggestion from two indicator, we expect yen would continue toward to south territory. Therefore, first upon resistance set on 110 around, 110.35 and 110.85 behind, respectively.

Resistance: 110, 110.35, 110.85

Support: 109.45, 109.25, 108.37

XAUUSD (4 Hour Chart)

Gold has formly stood over the consolidation and toward to right shoulder of “W shape” pattern which is trading at 1743 as of writing. For RSI perspective, indicator held 69 figures, suggesting a bullish ahead. On the other hand, 15-long SMAs has golden cross over 60-long SMAs that both of them are turning to asceding trend. Therefore, we expect gold still have a pickup space pursuant RSI indicator which not approach the over bought area yet. Meanwhile, strong momentum of price average indicator shows vigorously signal. However, we foresee there have an one-month-long resistance on 1754.53. Once break the powerful resistance, we believe market will toward to higher stage.

Resistance: 1754.53

Support: 1737.7, 1722.76, 1678.85

Economic Data

Daily Position Report

Market Focus

US stocks climbed toward another record high after the economic recovery is being evidenced, thus gaining momentum. The Dow Jones Industrial Average extended

370 points to an all-record high; the S&P 500 climbed 1.4% while the Nasdaq rose 1.6% today. Investors pushed up the value of stocks after economic date highlighted accelerating growth as more Americans are vaccinated. Especially, US service providers has the fastest growth on record in March, boosting investors’ confidence on the economic recovery. In the meanwhile, speculators have shown the sign by pulling back their net short position in Cboe Volatility Index futures for six straight weeks to their lowest.

Treasury Secretary Janet Yellen planned to end Trump’s global retreat, restoring global leadership and credibility with US allies following the unilateralist approach of the Trump era and eyeing on a harmonized corporate tax rate across the world’s major economies. Yellen also criticized the strategy of Donald Trump’s administration, decrying four years when the US isolated itself by retreating from the international order.

UK Boris Johnson put hope on the resume of foreign travel on May 17. UK’s lockdown is being gradually eased, and people are now allowed to meet outside in groups of six. Boris Johnson also confirmed that some stores can open from April 12 as planned. As the vaccine rollouts become more efficient, and free rapid Covid tests become more available, UK is now in the stage of considering whether it should suspend its travel bans.

Tencent and Alibaba remain the benchmark for China tech stocks despite Beijing continues to ramp up regulatory pressure on its tech firms. Chinese State Administration for Market Regulation has fined more than 12 companies on the violation of anti- monopoly rules so far.

Market Wrap

Main Pairs Movement:

Oil futures in New York dropped more than 4.5% today, sending prices to the lowest in more than a week. Oil prices plummeted as growing delays in Europe’s reopening and looming Iranian supply dampened hopes for a decline in global oil inventories. Moreover, investors eyed on the meeting in Vienna on Tuesday to discuss potentially resurrecting the agreement, a possible path toward removing sanctions on the Middle Eastern country’s oil exports.

Lonnie closed lower below 1.2550 even though oil prices dropped. The broad- based decline of the US dollar weighs on USD/CAD. With the US dollar facing a renewed selling pressure, however, the pair edged lower.

The British Pound reached three- week highs above 1.3900 against the US dollar. Pound self- strength coupled a weaker US dollar. As the UK is in a good shape in the battle against the Covid, GBPUSD sharped up today.

The second largest cryptocurrency, Ethereum, has been acting strong recently on the news that Visa would be using the ETH network to settle cryptocurrency transaction, trading around $2117 as the time of writing. With ETH’s recent move, ETH finally breaks away from the tendency to track the price movements of Bitcoin. ETH is no longer playing second fiddle to Bitcoin.

Technical Analysis:

EURUSD (Daily Chart)

EURUSD witnesses some postive move today, trading at 1.1809. The near- term picture is bullish, with scope for another leg higher. The pair is expected to climb toward 1.1855 where the horizontal line for the previous double tops formation. The bullish momentum in the near- term is supported by the RSI of 43, which is outside of the oversold condition, giving it more room to extend further north. In a bigger picture, EURUSD remains bearish as it continues to fall within the descending channel and trades below the 50 and 100 SMAs. On the upside, above 1.1855 minor resistance will turn bias back to the upside for 1.1945 resistance.

Resistance: 1.1855, 1.1945, 1.12349

Support: 1.1695, 1.1492, 1.1290

GBPUSD (Four Hour Chart)

GBPUSD keeps up its bullish momentum, reaching three- week highs above 1.3900. On the four hour chart, the pair has surpassed the 100 SMA, heading to the next immediate resistance at 1.3926. However, the RSI indicator is currently within the overbought area, suggesting a pull back before continues GBPUSD’s bullish move. From the technical aspect, the pair is expected to trade in the range of 1.3877- 1.3926 during the time of an adjustment. After the RSI becomes less, the pair is expected to trade higher as the MACD remains positive.

Resistance: 1.3926, 1.4005

Support: 1.3877, 1.3838, 1.3798, 1.3749

XAUUSD (Daily Chart)

Gold has been choppy today, stucking within a $1720- $1730 price range for the most of the day. After trading in positive territory for two consecutive day, gold turns bearish, currently trading at $1726. To the downside, the resistance at 1746.91(Fib. Retracement 23.6%) seems to act as a cap for gold buyers; a sustained move under $1746.91 indicate the presence of sellers. If gold fails to challenge $17746.91 again, the possible acceletation to the downside with potential targets below $1676.89 can happen. In the meanwhile, the bullish signal on the MACD indictor is currently weak, implying a possibility of a bullsih- to- bearish trend.

Resistance: 1746.91, 1790.23, 1825.24

Support: 1676.89

Economic Data

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Daily Market Analysis

Market Focus

Technology shares led U.S. stocks higher, regaining favor on the last day of a quarter where they trailed the rest of the major market sectors, with President Joe Biden set to unveil his next stimulus plan.

Apple Inc., Microsoft Corp. and Tesla Inc. pushed the tech-heavy Nasdaq 100 up 1.5%, while the Dow Jones Industrial finished lower with investors favoring growth over value shares again. The benchmark S&P 500 set an intra-day high, retreating from a record closing level in the last moments of trading.

Data for March showed U.S. private employers added the most jobs in six months, adding to evidence that the vaccine drive and business reopening are encouraging hiring. On the other hands, however, market shrugged off the worst-than-expectation data of pending home sales which record 10.6 contraction.

Investors, rattled this week by the meltdown at Bill Hwang’s Archegos Capital Management, are turning their attention to growth and inflation as volatility spurred by the forced sales subsides. While Europe’s struggle with inoculations and the resurgence of the coronavirus have tempered growth expectations, the U.S. vaccine rollout is surpassing targets.

Market Wrap

Main Pairs Movement

Oil fell after an OPEC+ panel meeting ended without an oil policy recommendation. The dollar weakened, but still posted its best quarter in a year. The Bloomberg Commodity Index and developing-nation currencies climbed.

The dollar index retreat from daily peak once approached nearly 6 months high then close at fell 0.12%. Moreover, the dollar declined against most G-10 peers, paring its biggest quarterly advance in a year as President Joe Biden unveiling his 2.25 trillion investment plans.

Loonie is down 0.5% to 1.2574 after falling as much as 0.7%, the hardest since March 11. Haven currencies faltered Wednesday, capping a quarter when rising U.S. Treasury yields created support for the dollar.

Technical Analysis:

EURUSD (4 hour Chart)

Euro dollar has quell nearly upwind movement then turn north way intraday amid weakness dollar as investor are stay tune for President Joe Biden’s infrustruction investment plan, however, market did not keep win while dragged down in nearly market close. On 4-hour chart, we see that euro dollar did not bounced back to our vital resistance point today that given a fragile spot from our perspective. At the mean time, both 15 and 60-long SMAs clinging it downward trend. On the other hands, RSI indicator set at 41 figure that suggest a slightly bearish momemtum for short-term.

Therefore, we do not prospect for pick up way as aforementional. For south way, daily low, 1.17, will go down as a frail but important support as it lack of price cluster below. Since, once euro dollar is going to tamp down further this support level then market could foresee another plummet ahead.

Resistance: 1.1765, 1.18, 1.1835

Support: 1.17

USDJPY (4 hour Chart)

USDJPY continues to perform its bullish momentum, currently trading at 110.73 which once hit 111, the one-year high level. For market side, Japanese yen extend it torrid devalution momentum which become unglglued since this year. We believe that carry trade behavior prompt this rally branza align with unstopable U.S. share market boost.

For technical perspective, 15 and 60-long SMAs have an edge over in pick up way that retain it impetus. On RSI side, indicator slipped from overwhelming over sought area to 69 figure, still suggesting a bullish guidline for short term.

Therefore, combing the terms above, we foresee yen market will still remaining it upward position. But only one concernig spot currently, yen has gained extraordinary reward since this year, so posiblity of keep picking up, we believe it will be a small-probability event.

Resistance: 110.85, 111.00

Support: 110.35, 109.8, 109.45

XAUUSD (Daily Chart)

Gold was rising more than 1% on Wednesday, recovering after posting sharp losses during two continous days, despite a modest rallied in U.S. yield, a correction of the U.S. dollar, month-end flow, and some profit-taking favored the rebound, according to traders. Gold recover further above $1700 to $1707.7 at market close, still under the downward resistance on it head. RSI indicator was recognized 49.7 figures, which still in lightly bearish backdrop. In addition, 15 and 60-long SMAs constantly on exacerbated way.

In the lights of points above, we expect gold market will under pressure as downward resistance and unfavorable indicator guidianc. On the slid side, phycological level at 1700 still a vital first pivot support, if stall, then eye-capture on 1678.85. However, once market go north way, first resistance will be 1722.75 which oodles price cluster place.

Resistance: 1722.75, 1738.32, 1754.53

Support: 1700, 1678.85

Economic Data

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Daily Market Analysis

Market Focus

US stocks declined for a second day as the US Treasury yields hit a 14-month high as investors weighed the consequences of the stimulus check, potentially resulting in higher inflation. The 10-year Treasury yield climbed as vaccine rollouts and expected Joe Biden’s infrastructure spending boosted expectations of a broad economic recovery and rising inflation. The Dow Jones Industrial Average dropped 104.41 points, slipping from a record closing high; S&P 500 slid 0.3% while the Nasdaq dropped 0.57%.

Overview of President Joe Biden’s plan:

Banks roiled by the Archegos Capital fallout might see total losses in the range of 5 million to 10 billion. Markets are trying to find out the final losses to banks exposed to the Archegos implosion. It is hard to estimate the total losses according to JP Morgan due to the nature of the leveraged trading involved.

Market Wrap

Main Pairs Movement

Gold continued to decline, approaching a nine- month low amid the vaccine rollouts and the rise of US bond yields. As the US bond yields rose, weighed on the outlook for growth and inflation, the non- interest- bearing Gold got pushed below $1700 level, currently trading at $1683. Moreover, the fast pace of the global economic recovery has essentially reduced the haven appeal of the metal; at the same time, a selloff in ETFs backed by gold was further eroding the support.

The dollar index hit near the highest level since last year, rising about 0.35% on a daily basis, as the US Treasury yields elevated, and stocks declined over Joe Biden’s fiscal policy. Moreover, adding to the bullish side of the dollar index, the optimistic view about the overall economy from New York Federal Reserve President also lends support the dollar index.

The Canadian dollar declined as a gauge of the US dollar climbed to the highest since last year, boosted by rising yields. The Canadian dollar also fell along with the oil price. Oil price fell along with the broader commodity complex ahead of an OPEC+ meeting. 

Technical Analysis:

EURUSD (Daily Chart)

EURUSD extends its fall, tumbling toward 1.17, the lowest since November. On the daily chart, EURUSD has broken the descending trend, accelerating the downside pressure toward the next support at 1.1695. Moreover, with the RSI currently at 31, still having rooms to extend further south. The pair keeps falling below bearish moving averagesm with the 20 SMA capping advances around 1.1895. On the upside, EURUSD’s bearish momentum might potentially confront a pause or a pullback around the support at 1.1695 as the level is considered as solid and strong, not yet been touched since Octorber.

Resistance: 1.1945, 1.2349

Support: 1.1695, 1.1492, 1.1290

USDJPY (Daily Chart)

USDJPY continues to perform its bullish momentum, currently trading at 110.27. USDJPY prolongs its recent upward trajectory and reaches multi- month highs today. On the daily chart, the pair continues to trade within the ascending channel and outplayingly above the 50 SMA, confirming a fresh bullish momentum toward the next resistance at 111.40. Nonetheless, the bullish momentum might be pause as the RSI on the daily chart is currently overbought, 79; USDJPY buyers might sense some caution before positioning for any further positive move.

Resistance: 111.40, 114.55

Support: 109.45, 107.87, 106.29

XAUUSD (Daily Chart)

Gold adds to the previous day’s losses and witnessed some follow- through selling for the second consecutive day today, trading at 1685.44. With the downside pressure, it appears to form a rounded top, signaling the end of an uptrend and the possible start of a downtrend. It is expected to see gold heading to further south, testing the support level of 1676.89 as the MACD indicator signals potentially a momentum change, bullish- to- bearish. Moreover, the RSI is still outside of the oversold conditions, implying a further falls in the next few trading sessions.

Resistance: 1746.91, 1790.23, 1825.24

Support: 1676.89

Economic Data