Daily Market Analysis

Market Focus

Global equities slumped in a broad retreat that extended across industries amid lingering concerns that retail trading was creating havoc and as traders mulled an uncertain outlook for deploying coronavirus vaccines. Treasury yields rose.

The S&P 500 Index fell almost 2%, turning negative for the year and posting its biggest weekly decline in three months as day traders’ bids for heavily shorted stocks fueled speculation hedge funds would need to reduce their market exposure. GameStop corp. and AMC Entertainment Holdings Inc. soared in a return of volatility for stocks popular in internet chat room as brokerages said they would start to ease trading restrictions imposed after wild swings this week.

Global stocks also fell the most since late October, partly on the turmoil caused by hordes of day traders hatching stock bets that roiled hedge funds and strained trading platforms. Meanwhile, investors were left to ponder the outlook for the pandemic as Johnson & Johnson said its one-shot vaccine generated strong protection against Covid-19, though it was less effective against the South Africa variant. The European Union escalated the fight over vaccine supplies with an emergency plan to restrict exports.

According to Carsten Brzeski, global head of macro at ING Group, “Extended and stricter lockdowns do not bode well for the economy. Demand from China could also weaken on the back of lockdowns.”

Market Wrap

Main Pairs Movement

EURUSD is trading above 1.2100, reversing losses after the German GDP beat estimates with 0.1% QoQ in Q4. US dollar clings to gains amid a downbeat mood fueled by the Wall Street retail-trader craze. Focus shifts to the US data, Yellen’s speech. Japan’s Tokyo inflation came in at -0.5% YoY, better than anticipated in January. Equities trade in the red in Asia and Europe amid individual investors’ frenzy. USDJPY rallies despite risk aversion, as demand for the greenback prevails. The USDCAD pair came under renewed bearish pressure in the early American session on Friday and touched a fresh two-day low of 1.2749.

The US Dollar Index extends the rejection from weekly highs below the 91.00 mark, shedding ground for the second session in a row on Friday. Crude Oil market indecision has continued on the final trading day of the week; front-month WTI futures have very much stuck to the week’s prior established range of between the $52.00 and low $53.00s.

Technical Analysis:

AUDUSD (4 Hour Chart)

On Friday, the Aussie tumbles to its most immediate support at 0.7634 on the back of the resumption of the demand for greenback with risk aversion sentiment dominating the global markets. The Aussie first began to show signs of losing positive traction in the early American session with the bulls failing to find acceptance above the 0.7700 resistance area. The risk-averse market environment is reflected by the broad-based decline across Wall Street’s main indexes, which in turn, helped DXY to stage a rebound. From a technical perspective, the bearish trend of the pair is supported by the 60-Day SMAVG. The tumbling of AUDUSD has brought down the RSI as the RSI for AUDUSD is now fluctuating around the low 40s, suggesting a bearish bias in investors trading pattern has now been triggered. If the risk aversion sentiment continues, the AUDUSD would be on the back foot and could be forced down to 0.7607 and 0.7568 if the support at 0.7634 is broken below. On the flip side, if the market sentiment is reversed, the Aussie pair would first touch the 0.7696 resistance, followed by 0.7761 and 0.7798.

Resistance: 0.7696, 0.7761, 0.7798

Support: 0.7634, 0.7607, 1.7568

GBPUSD (4 Hour Chart)

The Cable bulls are eyeing the critical resistance level at 1.13745 once again on Friday as the pair has staged a couple attempts to break above the 1.3745 resistance zones during the early America session. Even though the greenback regained some momentum at the time of writing, the GBPUSD seems less affected than most other greenback’s rivals. The strength of GBP is probably supported by the statements released by UK PM Johnson’s spokesman earlier on Friday. The spokesman reiterated on Friday that “we will continue to distribute vaccines fairly across all UK nations”.

Given that the Cable remains supported by the 15-Day SMAVG and that the GBPUSD pair has been rising on the higher lows since the start of 2021, it is reasonable to expect the GBPUSD bulls are waiting for a sign to break through the 1.3475 resistance level. Conversely, if the pair reverses the trend, a few cushions, which can be found at 1.3694, 1.3643, and 1.3606 would provide some essential support for the investors.

Resistance: 1.3745, 1.3767

Support: 1.3694, 1.3643, 1.3606

XAUUSD (4 Hour Chart)

The gold experienced a drastic up-and-downs on Friday, interchanging its daily highs at $1875 to $1847 within an eight-hour span. The broad-based weakness of the greenback earlier today helped boost the XAUUSD, but upon the American session, the risk-averse sentiment immediately kicked off as all three major indexes in the US equity markets today had shown to slump approx. 2% at the time of writing. The change in the market sentiment subsequently increased the demand for the greenback and undermined the early surge of the yellow metal. Technically speaking, the gold is under a slightly bearish trend given that the 60-Day SMAVG has just staged a death-cross against the 20-Day SMAVG. However, because the RSI is now hovering around 50s, it is inferable that the market is trading XAUUSD on a neutral ground. That said, it would not be prudent to place additional short position on the XAUUSD pair before any confirmative signal settles as it seems like the market is now undecisive. On the upside, if the Gold resumes its bullish trend, the bulls will need a break above the $1875 level before they can cap their gains at $1891 price zone. On the downside, if the bears can dive below the $1851 cushion, the next support levels are $1840 and $1824.

Resistance: 1875, 1891, 1906

Support: 1851, 1840, 1824

Economic Data

Click here to view today’s important economic data.

Daily Market Analysis

Market Focus

U.S. equities mounted a comeback from their worst loss since October as moves to limit retail traders’ speculation in some companies opened the door for hedge funds to load up on stocks they had been ditching.

The S&P 500 Index rose 1% after trading platforms restricted activity in stocks whipsawed by internet chatter, from GameStop Corp. to AMC Entertainment Holdings Inc. and American Airlines Group Inc. Hedge funds that had shorted the stocks were burned in recent days, forcing them to reduce holdings in shares they loved in order to cut risk.

That dynamic reversed Thursday, and a Goldman Sachs basket of stocks favored by hedge funds jumped the most since early November, halting a five-day slide. An index of the most-shorted shares tumbled more than 7%, the most since June. GameStop whipsawed, rising as much as 39% in early trading before plunging as much as 68%. It closed down 44%. AMC sank 57%, American was up 9.3% and Tootsie Roll Industries lost 9.5%.

The trading restrictions sparked outrage on the WallStreetBets forum where day traders have convened to drive the manic rallies that burned hedge funds across Wall Street. Washington took notice of what some have called inequitable rules, with Democratic and Republican lawmakers criticizing restrictions imposed on retail investors.

All 11 industry groups in the S&P 500 traded higher, with sentiment also boosted by solid corporate earnings from the likes of Mastercard Inc. and Comcast Corp. and a surprise drop in jobless claims.

Stocks have seen volatile trading after a prolonged rally that spurred talk of possible asset bubbles and predictions of a pullback given a raging pandemic and patchy rollout of vaccines. The turmoil created by internet chat rooms has stoked fears of broader consequences for Wall Street, particularly hedge funds, but that fear seemed to fade on Thursday.

The Stoxx Europe 600 Index edged higher. Earnings beats from STMicroelectronics NV and Diageo Plc were accompanied by a miss from Swatch Group AG and a revenue drop at EasyJet Plc.

The benchmark 10-year Treasury yield rose after touching the lowest level since Jan. 5. Bitcoin climbed past $32,000.

Market Wrap

Main Pairs Movement

The dollar fell against all of its Group-of-10 peers except the yen as risk sentiment improved, with U.S. equities rallying after their worst rout since October.

A gauge of the dollar traded near session lows after rising to a five-week high earlier. The Norwegian krone and New Zealand dollar were the best performers against the greenback

Equity markets rose following moves to curb trading on a few stocks that had swung wildly on retail demand, which allowed hedge funds to load up on names they had ditched. Better-than-expected earnings results and solid economic data, including the first increase in new-home sales since July, also supported risk sentiment.

AUD/USD rebounds from a decline of almost 1%, rising 0.4%; NZD/USD up 0.4% after losing as much as 0.8%; GBP/USD climbs 0.4% to 1.3742, near session highs of 1.3746.

Technical Analysis:

GBPUSD (4 Hour Chart)

The Cable once slipped to lower bound of upward trend channel which at 1.3645 level then pull up to first pivot resistance as we measure previously. Cable climbed as much as 0.37% to 1.3729, near session highs of 1.3746 and it was amongst the top three best performing G10 currencies on the day. Risk appetite took a turn for the better in wake of better-than-expected weekly initial jobless claims data dropping to 847k from 914k, beat expectations of 875k. In terms of domestic U.K. fundamentals, there hasn’t been too much of news stuff today.

From a technical perspective, short and long-term SMAVG indicators are both boosting to higher level while short term indicator is accelerated it upward momentum. Additionally, the RSI indictor located at bullish trend suggestion area at 57 figures which left amount space for further downwind momentum. On up way perspective, 1.3745 level is still a powerful resistance at current stage which curb the bullish movement in recent day. On slid way, just focus on whether it would go down below the lower bound of upward trend channel. We expect that cable is still lacking a decisive way and momentum trigger; therefore, first pivot support and resistance is more comfortable for cable at current stage.

Resistance: 1.3745, 1.3767

Support: 1.3693, 1.3645, 1.3606

EURUSD (4 Hour Chart)

The euro dollar has seen a gradual grind to the upside for the majority of Thursday, with the gains accelerating slightly before the US cash open amid an extension of US dollar weakness. The pair now trades comfortably above the 1.2100 level again and in the 1.2120s, up from lows of the day around 1.2080 set just prior to the EU cash open. Gains on the day have for now been capped at the 1.2140 mark. Like cable, euro creep up amid the better-than-expectation labor market data and risk appetite has improved.

Technically speaking, short and long-term SMAVG indicator were both in negative slope position then it really close to death cross, suggesting a bearish momentum ahead. On the other hands, RSI indicator has turned back its status from yesterday low to 46 around. Therefore, combing suggestions above that first critical support on downside still on 1.21, like yesterday estimate. If market momentum turn positive side, it would please above the 1.213 level and propel further is more likelihood above the second resistance at 1.2165.

Resistance: 1.2131, 1.2165, 1.2182

Support: 1.21, 1.2077, 1.2054

USDJPY (4 Hour Chart)

The yen slid versus the greenback for a second day, sending the USD/JPY to the highest since December. USD/JPY has been unreliable as a safe haven pair since the COVID pandemic began in early 2020. On the other hands, choppy shares market is seemingly driven carry-trade investors redemption yen dollar from selling shares at top probably. USD/JPY up +0.1% at 104.23, after climbing to 104.46, highest since Dec. 10.

From a technical perspective, the RSI indicator undermine from the overbought zone to 67 figures which still suggest the bullish trend ahead. Additional, short- and long-term SMAVG is just golden cross that propel market in torrid. On price action, day high reached to last time highest approximately. Therefore, we believe market is awaiting more clues for further upward momentum. Conversely, the first pivot support is eyes on 104.02 which seen to support the current bullish movement, the last crucial support would be 103.56.

Resistance: 104.58, 104.73

Support: 104.02, 103.8, 103.56

Economic Data

Daily Market Analysis

Market Focus

U.S. stocks extended losses in after-hours trading after disappointing earnings from tech giants and amid growing concern that equities have become overvalued. The dollar jumped the most since September and Treasury yields slipped.

Facebook Inc. and Tesla Inc both fell after reporting results, dragging down ETFs that track major stock gauges. The S&P 500 Index recorded its worst rout since October in the cash session, with the gauge down 2.6% after Federal Reserve officials left their main interest rate unchanged without promising any more aid for the economy. The selloff was widespread, sinking all 11 groups in the benchmark stock gauge.

Turmoil continued in pockets of the market where retail traders are becoming a dominant force, with shares of GameStop Corp. and AMC Entertainment Holdings Inc. soaring as investment pros questioned whether there’s any rationale behind the moves.

The Stoxx Europe 600 Index declined the most in five weeks as the European Union and AstraZeneca Plc squabbled over vaccine delivery delays. The euro fell after a European Central Bank official said the markets are underestimating the odds of a rate cut. Officials in the U.K. announced new rules to try to curb the spread of Covid-19 and Germany cut its 2021 economic growth forecast to 3% from 4.4%.

An extended run higher for stocks has reversed this week as investors look to a spate of earnings releases for clues about the health of the corporate world. Federal Reserve Chairman Jerome Powell said at a press conference that the U.S. economy was a long way from full recovery and still short of policy makers’ inflation and job goals.

Elsewhere, Bitcoin fell below $30,000 before paring the decline and precious metals slumped. Asian stocks fell for a second day as investors took a breather following the regional benchmark’s ascent to a record high Monday.

Few Takeaways for Fed Speaks.

Market Wrap

Main Pairs Movement

The dollar rose against all Group-of-10 currencies as equities continued to tumble, and as Federal Reserve Chair Jerome Powell reiterated the central bank’s commitment to accommodative monetary policy, adding the U.S. was a long way from a full recovery. The greenback ticked up following the Fed decision and as Powell spoke in his press conference.

Pace of bond purchases to remain at $120 billion per month, the Fed said in its policy statement. It also added a mention of vaccines, saying the path of the economy will depend in part on the progress of inoculations. U.S. bond price rise, yields fell.

The pound remained lower in New York afternoon trading. Prime Minister Boris Johnson said March 8 was the soonest national Covid-19 restrictions could be eased. Johnson also said he was confident in AstraZeneca’s vaccine supply amid a showdown between the company and the European Union over the timing of inoculation deliveries. GBP/USD falls -0.4%.

EUR/USD is -0.5% to about 1.21; fell to the lowest level since Jan. 18.

Technical Analysis:

GBPUSD (4 Hour Chart)

The Cable once boost to 1.3745, highest level days ago, then retreated to 1.3681 level as of writing. At the meantime, the U.K. house of lords is looking into the BoE’s stimulus-providing bond purchase, including whether the program has undermined perception of the central bank’s independence and how it can be unwound. The central bank was criticized by its internal watchdog for not communication the QE policy well enough, meaning that most of the public doesn’t understand it. Governor Andrew Bailey has promised to improve.

From a technical perspective, indeed, long term SMAVG indicator vigorous is supporting sterling in high-level stair. On the other hands, short-term SMAVG indicator maintain an upward slope, despite fell at the end of day. Additionally, the RSI is whipsawed today lowest at 49 which under neutral area, considering a bearish suggestion. If sterling could find a support in current stage and indicators are turn into positive, it would be expected to stay in long-term ascend channel. On the flip side, if the GBPUSD reverses its recent momentum even breakthrough the channel, the last critical support would be 1.3605.

Resistance: 1.3745, 1.3767

Support: 1.3693, 1.3645, 1.3606

EURUSD (4 Hour Chart)

The euro dollar slumped as much as 0.8% once after a reporting indicating that European Central Bank officials believed markets were largely ruling out more interest-rate cuts, and agreed to emphasize that such stimulus is still a possible alternative. The market is becoming increasingly familiar with attempts from European Central Bank officials to talk down the euro; lately, these have had short-term success as investors look for action rather than just verbal intervention in order to abandon their euro-long exposures.

Technically speaking, short and long-term SMAVG indicator were both turn into negative slope only haven’t death cross yet, suggesting a bearish momentum ahead. On the other hands, RSI indicator has slipped to 38 figure which consider a bearish trend, moreover, it seemingly still has space for upwind momentum as it hasn’t breach over sought area. As price action and derivative market aspect, risk reversals are almost unchanged Wednesday, suggesting it may take more than just a rate-cut threat to see the euro below key support around 1.19. Therefore, if market slide sequentially, the immediately support is psychological level at 1.21, 1.2077 and 1.2054 follow next.

Resistance: 1.2131, 1.2165, 1.2182

Support: 1.21, 1.2077, 1.2054

XAUUSD (4 Hour Chart)

Gold market has tamped down to day-low amid the greenback ticked up once few days high, even 10 years Treasuries yield slid. It seems like pair is having quite difficult for upward momentum. the pair is testing consolidation range between 1859.2 and 1842.8.

From a technical perspective, the RSI indicator ebbed to 43 which suggest the bearish trend ahead. Additional, short- and long-term SMAVG is moving to divergence way as short-term one is slightly pick up. On price action, the “M shape” pattern is built and currently at the right shoulder. Therefore, we expect that market seems to try to direct a way for it position. On slip side, the urgent first pivot level is required on 1842.8 level as current stage, 1824 is considered the last critical support level. On contrast, up way is resisted by 1859 as first level.

Resistance: 1859, 1875, 1891

Support: 1849, 1842, 1824

Economic Data

Daily Market Analysis

Market Focus

US stocks ended an up-and-down session slightly lower, weighed down by worries over virus variants and hurdles to a fresh aid package. Futures on the Nasdaq 100 Index jumped afterhours following a strong earnings report from Microsoft Corp. The S&P 500 dropped just over 0.1% on an uneventful day at the index level. Below the surface, sentiment continued to be driven in large part by the retail trading set. GameStop Corp. rallied another 92%, while Pitney Bowes Inc. jumped more than 80% after a comparison to the video-game retailer. Small caps were among the worst performers as traders turned away from bets on an end to Covid lockdowns.

While retail traders continued to pile into stocks with heavy short interest among hedge funds, a host of momentum stocks and fund darlings turned lower. Peloton Inc. lost 6%, Square Inc. fell 3.5% and Roku Inc. slid more than 5%.

Big tech stabilized in the aftermarket hours, with Microsoft Corp. surging 6% after sales topped projections. Amazon.com Inc., Apple Inc., and Facebook Inc. all advanced at least 0.5%.

Global stocks are mostly threading water near record highs as US corporate earnings season gears up this week, with traders also keeping an eye on developments related to the pandemic and its spread. Vaccine coverage won’t reach a point that would stop transmission of the virus in the foreseeable future, the World Health Organization said.

Market Wrap

Main Pairs Movement

The broad-based selling pressure surrounding the greenback in the early American session caused the USDJPY pair to slide to a daily low of 103.56. Nevertheless, the pair didn’t have a difficult time staging a rebound and was last seen posting small daily losses at 103.67. The weak USD helped Aussie surge towards the current 0.7450 region. Cautious persist ahead of the US Federal Reserve’s decision. Australian Q4 inflation in focus. USDCAD has slid back from European morning session highs in the 1.2780s to test the 1.2700 level again, as the loonie benefits from weakness in safe-haven currencies (including the US dollar) amid a broad recovery in risk appetite since the start of European session.

It’s been another mixed day for crude oil markets as traders weigh up conflicting narratives. WTI managed to recover back to the north of the $53.00 level at one point, seemingly in line with a recovery in broader risk appetite that also saw stocks rising and the US dollar falling but has fallen back to the $52.50s in recent trade. The inability of USD bulls to push further north of recent tops in the 91.00 region in past sessions prompted sellers to return to the markets and shifted the attention to the potential continuation of the downtrend.

Technical Analysis:

GBPUSD (4 Hour Chart)

The Cable rises above 1.37 and has been trading comfortably around 1.3725 as both market mood improves in anticipation of US stimulus and UK jobs figures beat the market expectation. Although the Cable pair was under pressure during the early European session, bottoming around the lows of 1.36, the broad-based greenback weakness inevitably boosted the GBPUSD’s price. One of the main reasons that improved the GBPUSD was the positive turn in the market sentiment. Because Moderna announced that it would soon begin to investigate a booster vaccine shot and that the Pfizer is also reported to be looking into a booster dose, investors’ confidence strengthened and the demand for USD wore off. From a technical perspective, the recent rally of Cable is supported by the 15-Day SMAVG and the MACD histogram. Additionally, the RSI is fluctuating around the low 60s, which indicates that there is still room for the GBPUSD to advance further. If the GBPUSD can find acceptance above 1.3745, the next resistance would be found at 1.3767, a price level last seen at Apr 2018. On the flip side, if the GBPUSD reverses its recent momentum, the most immediate cushion can be found at 1.3693, 1.3645, and 1.3606.

Resistance: 1.3745, 1.3767

Support: 1.3693, 1.3645, 1.3606

EURUSD (4 Hour Chart)

Just like the Cable, the EURUSD has reversed significantly from the pair’s early lows at 1.2100 lows and is now trading near 1.2165 resistance level. While the US Consumer Confidence data for January is released today (the actual result beats the forecasted number (89.30 to 89.00), the markets largely ignored the data. The main driver for the risk appetite is the positive shift in the tone of the news covering the Covid-19 front. Technically speaking, the bullish momentum of EURUSD is supported by the 15-Day SMAVG. However, given that the RSI is now hovering around the 50s threshold, the prior trading bias for the pair has receded. On top of that, since a pin bar had formed prior to the current tick, it is inferable to say that if the EURUSD fails to penetrate the 1.2165 resistance, a decline in the EURUSD price is quite likely. Therefore, it would not be prudent to place any long positions before a confirmative rally is staged. From the upside, the next resistance can be seen at 1.2165, 1.2182, and 1.2207. Conversely, the support levels for the pair are found at 1.2116, 1.2077, and 1.2054.

Resistance: 1.2165, 1.2182, 1.2207

Support: 1.2116, 1.2077, 1.2054

XAUUSD (4 Hour Chart)

Although the greenback was on the back foot ever since the early US session, the XAUUSD pair seems irresponsive to the change in the market sentiment and has been trading in a tight range for the second straight day. It seems like the pair is having quite a difficult time to make a decisive move in either direction, at the time of writing, the pair is still struggling to make a move between $1859 and $1849. From a technical perspective, the RSI is bouncing around the 50s, suggesting that there is yet to have a trading bias developing at the moment. However, knowing that the 20-Day SMAVG is now hovering above the 60-Day SMAVG, a slightly bullish trend for the XAUUSD can be expected. If the Gold manages to break above the $1859 resistance, the following resistance levels are $1875 and $1891. Conversely, if the XAUUSD dives deeper, the upcoming supports are $1849, $1842, and $1824.

Resistance: 1859, 1875, 1891

Support: 1849, 1842, 1824

Economic Data

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Daily Market Analysis

Market Focus

US stocks slipped from records as investors grew anxious that the virus will hamper growth for longer than expected and Democrats may struggle to get a nearly $2 trillion spending bill through Congress. The S&P500 Index fell for the first time in four days, with losses widening on reports that the new virus strain may be deadlier. It rose 1.9% in the week. Oil’s slump dragged energy companies lower, while Intel Corp. dropped after its new boss recommitted to chipmaking, a move opposed by some investors. Yields on Treasuries edged lower, and crude oil slid below $53 a barrel.

Overseas markets struggled after economic data in Europe missed estimates. IHS Markit data showing a pickup in US manufacturing did little to boost sentiment. Senate Republicans continued to come out against Joe Biden’s aid package, threatening the legislation’s passage in the sharply divided body.

According to Scott Ladner, the chief investment officer at Horizon Investments, “The virus numbers are not good right now obviously around the world, especially in the US and in Europe, and we’re also getting a little bit more question about how much of the stimulus is actually feasible and what’s the timeline. Those two things are putting just a damper on the enthusiasm that has existed since November.”

The week’s global equity rally, spurred by expectations of economic support and the rollout of vaccines, paused as traders weigh still-troubling Covid-19 trends. Biden, who is pushing for $1.9 trillion in additional spending, unveiled a strategy to combat the virus while warning the pandemic will worsen before it improves. Restrictions intensified from Germany and the UK to Hong Kong, and the European Central Bank cautioned that the euro area is headed for a double-dip recession. The UK’s new more contagious strain of coronavirus may be linked to higher mortality, Prime Minister Boris Johnson has said.

Market Wrap

Main Pairs Movement

EURUSD has retreated from the highs near 1.22 as markets remain cautious ahead of President Biden’s speech on the economy. Earlier, EURUSD advanced in response to upbeat eurozone PMIs. The USDJPY pair is struggling to penetrate the 5-day Simple Moving Average hurdle for the second straight day. A break above the SMA hurdle would expose the upper end of the failing channel represented by trendlines connecting Jan. 11 and Jan. 19 highs and Jan. 13 and Jan. 21 lows. The AUDUSD pair continued to lose ground through the mid-European session and dropped to tow-day lows, around the 0.7700 round figure mark in the last hour.

The greenback finds it difficult to leave behind the recent weakness and now navigates without a clear direction in the vicinity of the 90.00 mark when tracked by the DXY. WTI crude oil prices are on the back foot on the final trading day of the week; prices dropped as low as the $51.50 mark in the early part of European trade, hitting their lowest levels in two weeks.

Technical Analysis:

USDCAD (4 Hour Chart)

The Loonie continues its 2-consecutive day win and is now trading above 1.27 level on the last day of the week. Despite the strong retail sales numbers for November and amid the soft crude oil prices and other risk assets and expectations that December retail sales will be much weaker, CAD remains an underperforming currency today. From a technical perspective, the Loonie bulls would definitely see some contention when attempting to top the 1.2745 resistance as that price level not only is a price zone that has acted as support and resistance levels multiple times previously, but also resembles a price zone that is on the upside of a long-term declining trend. Nevertheless, given that the RSI has yet to reach the 70 overbought threshold (currently fluctuates around the low 60s), there seems to be room for the bulls to further extend their rally. From the current levels, the most upcoming resistance at 1.2744 is likely to provide some fresh selloff pressure when reached. On the flip side, the 1.2653 level now seems to be the most immediate cushion for any sudden decline of the Loonie.

Resistance: 1.2746, 1.2770, 1.2794

Support: 1.2653, 1.2631, 1.2605

GBPUSD (4 Hour Chart)

The disappointing UK Retail Sales number and January’s preliminary PMIs both missed the forecasted estimation (forecasted UK Retail Sales: 0.8%, forecasted PMI: 50.7; actual UK Retail Sales: 0.4%, actual PMI: 40.6), which in turn, put the Cable on the back foot during the early European Session. Although the Cable has bottomed once again at weekly low near 1.3636 earlier, the pair still managed to climb back up near 1.3680 at the time of writing. Technically speaking, the 15-Day SMAVG is still supporting the bullish trend of GBPUSD. But, given that the GBPUSD has once again failed to find acceptance above the 1.3745 resistance level during the Asian session, it is reasonable to say that without a confirmative fundamental news or fresh demand to put the Cable above 1.3745, it would not be prudent to place additional long position at the current trading levels. The RSI is now indicating a neutral trading pattern.

Resistance: 1.3701, 1.3745

Support: 1.3645, 1.3606, 1.3554

XAUUSD (4 Hour Chart)

The price of XAUUSD dropped to $1837 but then climbed back up to around $1855 at the time of writing. The early retreat of the yellow metal is attributed to a modest pickup in the USD demand as President Joe Biden’s stimulus plan ran into some opposition from the Republicans. But with a tweezer top forming, we can expect that the gold traders have encountered a market-turning point. If the gold can penetrate the $1859 resistance level, the next upside target is around $1875, followed by $1891. Conversely, a decline in the XAUUSD pricing would first bring the pair down to $1842, then $1827. From a technical perspective, the 15-Day SMAVG is supporting a bullish XAUUSD, however, given that RSI is now hovering around 50, a roller-coaster type of day in XAUUSD trading seems like it would close the week without any apparent trading bias. In the upcoming week, XAUUSD traders would continue to monitor closely whether the new US administration would settle for quick wins of smaller stimulus package or try to pass a big bill.

Resistance: 1859, 1875, 1891

Support: 1842, 1827, 1804

Economic Data

Click here to view today’s important economic data.

Daily Market Analysis

Market Focus

U.S. stocks eked out a gain to close at a record with tech shares lifting the major indexes on anticipation that more fiscal spending will revive economic growth and bolster corporate earnings. The dollar weakened. The S&P 500 Index rose a bit more than one point, while the Nasdaq indexes rose at least 0.5%. Risk appetite has gotten a boost from President Joe Biden’s push for nearly $2 trillion in additional spending and plans to jumpstart a federal response to the pandemic. Benchmark Treasury yields remained higher after initial jobless claims posted a small decline.

U.S. equities remained at records with stretched valuations as earnings continue to roll in. Intel Corp. reported fourth-quarter revenue that topped expectations. Investors continue to bet on another stimulus package from Biden as the president ramps up the federal response to the pandemic. European Central Bank President Christine Lagarde warned the virus continues to pose a serious risk after policy makers voted to keep pumping unprecedented amounts of stimulus into the economy.

Meanwhile, fresh tensions surfaced between U.S. companies and Beijing. China’s three biggest telecommunications firms said they requested a review of the New York Stock Exchange’s decision to delist their shares. Separately, Twitter Inc. locked the official account of the Chinese embassy to the U.S., citing a violation of its “dehumanization” policy.

Market Wrap

Main Pairs Movement

The Canadian dollar set a two-year high, and then faded, after Bank of Canada Governor Tiff Macklem said the nation’s economy is flush enough with stimulus to survive the current downturn and doesn’t need additional help from monetary policy. The euro held gains amid news that the European Central Bank was seeking new gauges to inform its stimulus debate.

The loonie later pared gains and was among the worst performers among Group-of-10 after hitting its highest level since April 2018. It surrendered some gains after Macklem said a weaker dollar may mean looser Canadian monetary policy. USD/CAD is almost flat at 1.2628; fell as much as 0.4% to 1.2590, the lowest since April 2018.

ECB announced on Thursday that it may not spend the full 1.85 trillion euros available, but can also recalibrate the program, if need. President Christine Lagarde said growth risks are to the downside but less pronounced. She also stressed the need for more fiscal policy and said they should be expansive, targeted, and temporary.

A gauge of the greenback trimmed losses though remained broadly lower; the gauge is poised for a fourth session of declines, its longest streak since mid-December.

Technical Analysis:

EURUSD (4 Hour Chart)

On Thursday, euro dollar implied volatilities atypically stayed firm and the curve steepened immediately following the European Central Bank’s announcement that it left policy largely unchanged. Usually, implied volatilities often decline after an event-risk passes. EUR/USD is up 0.5%; reached 1.2173 as Italian and German bond prices extended declines in the wake of the ECB.

From technical perspective, euro not fully support by long-term SMAVG indicator as it remain downward trend while short-term propel upward. Moreover, MACD indicator is go over positive threshold. RSI indictor also shows an optimistic upward momentum as it close 62 gird, suggesting a bullish trend for short term at least. Therefore, we expect first crucial resistance is at current stage on 1.216 as price action suggesting, 1.2205 following.

Resistance: 1.216, 1.2206

Support: 1.2115, 1.2077, 1.2054

GBPUSD (4 Hour Chart)

Sterling rose earlier on Thursday to 1.3745, peak level since April 2018, then back slightly while market close. Sterling is finding a psychological support on 1.37 while its breakthrough a critical resistance as price action suggestion. The binge upward momentum amid risk appetite and a weaker greenback. Benign economic data from the U.S. did not spur greenback.

From a technical perspective, sterling’s recent rise is supported by short and long term SMAVG and MACD, both indicators are touted to higher level, moreover, golden cross pronounced the bullish trend suggestion. Additionally, as the RSI has constantly forayed to forward to torrid condition which close at 65.7 around, it seemingly still a way to gain another upward momentum before 70 figures. All of all, the first priority is kept lid on go beneath 1.37 support level for bullish aspect, then it’s a lot of upward space for sterling.

Resistance: 1.375

Support: 1.37, 1.3625, 1.3541

XAUUSD (4 Hour Chart)

The Gold is now trading around 1870 with a flat move in daily market, nearing its most immediate resistance around 1871, whilst strong U.S. eco data was released. On the other hands, greenback ebbed momentum beef up the yellow metal demand and price coup. At the meantime, market is lacking critical momentum driver for swirl gold market.

For technical aspect, short term SMAVG indictor is golden cross with descend long-term SMAVG indicator, which a bullish trend suggestion yet the fly in the ointment is tamp down long-term indicator. For RSI view, indictor creep up with fluctuate movement to 59 as market close, suggesting a bullish trend ahead. MACD also prop up the bullish guidance as it at positive zone.

If the precious metal can penetrate the $1871 resistance level, the next resistance can be found at $1882, then $1891. On the flip side, the cushions for the pair are $1847, $1839, and $1823.

Resistance: 1871, 1882, 1891

Support: 1847, 1839, 1823

Economic Data

Daily Market Analysis

Market Focus

US stocks rallied to all-time highs as investors grew optimistic that recent federal spending will revive growth and bolster corporate earnings. Treasuries were little changed while the dollar weakened. The Nasdaq 100 Index jumped more than 2% and the SP500 Index posted the best first-day reaction to a newly elected president’s inauguration since Jan. 20 became the official start in 1937. Netflix Inc. surged more than 17% after a jump in subscribers. Chipmaker ASML Holding NV rallied on solid results. Morgan Stanley gained after reporting record full-year results.

Investors looked past a fresh stumble in the rollout of vaccines and elevated infection rates, and eyed the promise of more stimulus and an expanded federal effort to get shots to more Americans quickly under President Joe Biden.

According to Keith Buchanan, a portfolio manager for GLOBALT Investments, “If stimulus happens at the same time that people get vaccinated, the optimism can’t help but build. It’s a fairly safe bet there will be another stimulus package with more direct payments to consumers and individuals and more help for small businesses.”

While investors are counting on more spending to help propel economic growth under Biden, who is planning a flurry of executive orders on his first day, it won’t be all smooth sailing as Janet Yellen encounters early Republican resistance to Biden’s relief plan in her confirmation hearing to become Treasury Secretary.

Market Wrap

Main Pairs Movement

GBPUSD has fallen off the peak of 1.3719, the highest since 2018, amid fresh dollar strength. Optimism about the UK’s vaccine campaign and lower cases boosted sterling earlier. The greenback awaiting Biden’s first moves as President. The pair dropped from pre-release levels close to 1.2700 to nearly as low as the 1.2600 mark, before pairing losses to settle closer to 1.2650. In doing so, the Loonie hit its highest levels in nearly three years versus the US dollar. USDJPY resumed its decline after failing to advance beyond 104.00. Pressure mounts as investors await for Bank of Japan.

Crude Oil markets trade on the front foot on Wednesday, though have largely failed to take advantage of a recent improvement in risk appetite that has seen US stocks surge since the open and the US dollar fall, particularly against commodity FX. DXY met buyers in the 90.30 region earlier on Wednesday and now resumes the upside to the 90.50/55 band.

Technical Analysis:

EURUSD (4 Hour Chart)

After touching the lows around 1.2077 briefly, EURUSD has bounced back to near 1.21 as Biden becomes US President. Given that the EURUSD failed to extend its weekly recovery above the 1.2160 level and that the greenback has slightly bounced back on the Inauguration Day, the bears are attracted back to the market to undermine the prices of EURUSD. Markets are now focusing on how Joe Biden and his administration would address the ongoing trade conflict with China, the nuclear agreement with Iran, stimulus plans, and extra announcements regarding green energy.

Reflecting from the chart, it is inferable that the bulls have met some new contention around both 1.2160 and 1.2116 resistance level. Knowing that the EURUSD is currently trading above 1.21 (a relatively high price range in recent years), it is reasonable to believe that a strengthened USD and global economic prospects would continue to keep the pair on the back foot. On top of that, a bearish trend is also supported by both the 60-Day SMAVG and the MACD histogram. If the decline continues, the first cushion would be found near 1.2077, then 1.2054, followed by 1.1992.

Resistance: 1.2116, 1.2170, 1.2206

Support: 1.2077, 1.2054, 1.1992

AUDUSD (4 Hour Chart)

Even though the Aussie continued to rise and even staged a short-lived surge towards the 0.7761 resistance, the lack of a further USD losses still keeps the pair from penetrating the pair’s most immediate resistance. At the time of writing, the relatively weak greenback and the lifted risk appetite have contributed to the Aussie’s 3 consecutive day gains. The upcoming AUD Employment Change (Dec) is closely monitored, and a number that beats the markets expectation may provide the much-needed boost for the pair to top near the psychological resistance at 0.7798.

From a technical perspective, Aussie’s recent rise is not yet supported by SMAVG and MACD, but both indicators are staging a cross that would soon indicate a bullish trend. Additionally, as the RSI has been consistently rising to the high 50s, it is clear that the traders are placing their bets on the bulls. However, it would be not be prudent to place any long positions until further confirmative news solidify Aussie’s upward momentum.

Resistance: 0.7761, 0.7798

Support: 0.7705, 0.7663, 0.7634

XAUUSD (4 Hour Chart)

The Gold is now trading around 1870, nearing its most immediate resistance at 1871, amid the risk-on sentiment across the board as US President Joe Biden speaks in the US Inauguration Day. The greenback today has an uneven performance as investors eagerly wait for a catalyst given that the macroeconomic calendar had little to offer so far for this week. According to analysts at TD Securities, the reason why the gold is being pulled upward amid a market-wide risk-on sentiment is that the gold inherent inflation-hedging properties, which can successfully take care of investors’ concerns over rising inflation expectations. However, if the demand volume for the Gold recedes, the counter-inflation nature of the yellow metal could lose its position and value in the market. From a technical perspective, the short-term bullish momentum of the yellow metal is supported by the MACD and RSI reading. If the precious metal can penetrate the $1871 resistance level, the next resistance can be found at $1882, then $1891. On the flip side, the cushions for the pair are $1847, $1839, and $1823.

Resistance: 1871, 1882, 1891

Support: 1847, 1839, 1823

Economic Data

Daily Position Report

Market Focus

U.S. stocks rose, led by gains in tech shares and small caps, with Wall Street parsing the latest earnings ahead of a flood of reports this week.

The S&P 500 Index rebounded from Friday’s selloff after a three-day weekend that brought little by means of fresh macro news. Ten-year Treasury yields climbed back toward 1.1% and the dollar weakened. Crude oil and emerging markets also advanced. Goldman Sachs Group Inc. turned lower even after reporting that profit more than doubled. Bank of America Corp. shares edged higher after its results. General Motors Co. rose to a record after Microsoft Corp. invested in its self-driving car startup. Netflix Inc. reports results after markets close.

Janet Yellen encountered early Republican resistance to President-elect Joe Biden’s $1.9 trillion Covid-19 relief plan in her confirmation hearing to become Treasury secretary. Donald Trump is in the final hours of his term, with Biden to be sworn in at noon Wednesday in Washington.

Hong Kong Stocks at 20-Month High as Record China Cash Floods In. The market moves on Tuesday show that investors are coming back to the reflation trade, betting that the incoming U.S. administration will use its legislative firepower to propel economic growth. Biden’s stimulus package includes measures like a minimum-wage hike and substantial expansion in family and medical leave — programs that have already triggered Republican opposition.

Market Wrap

Main Pairs Movement

The greenback held modest losses for a second session amid light turnover after U.S. Treasury Secretary nominee Janet Yellen noted a preference toward a market-driven approach to American currency policy. The loonie gained ahead of the Bank of Canada’s monetary policy meeting on Wednesday.

The euro gained on improved risk sentiment, as well as corporate and options demand after several billion euros in higher struck options expired. The pound ticked higher after Bank of England Chief Economist Andrew Haldane said the bounce back from Covid may be sharper than the financial crisis. The Canadian dollar gained for the first time in three days.

USD/JPY is +0.2% after climbing as much as 0.4% to 104.09. The yen fell amid cross demand against the euro and Australian dollar, according to multiple Asia-based FX traders.

Technical Analysis:

GBPUSD (4 Hour Chart)

Sterling is edging above 1.36 as market eagerly Treasury Secretary nominee Janet Yellen’s testimony. The U.K. parliament is set to process the Brexit deal as Britain ramps up its vaccination campaign.

For technical aspect, MACD indicator is retreating from negative mire and spiraling the momentum at 0 level. RSI give another strong signal, indicator continues pick-up from neutral level to 55 as of writing, suggesting a positive phenomenon. As price action, sterling been through a “v shape pattern” reverse from last lowest level at 1.3618. For short-term, combing evidence that probably would give it an upward momentum. However, in bigger picture, consolidation range is still trapping sterling price momentum in nearly 2 months. Therefore, we expect 1.37 level remain a powerful resistance at top of consolidation, before that, barricade be eye on 1.3678. On contrast, first pivot of support is shoulder of “v shape pattern” at 1.3618 and 1.3541 is following behind.

Resistance: 1.3678, 1.37

Support: 1.3618, 1.354, 1.3448

USDJPY (4 Hour Chart)

Yen retreated consecutive from 104 and fell to 103.84, the lowest level since the Asian session. It is moving with a bearish bias, still positive for the day but off highs. A decline in U.S. yields and a correction in shares prices weakened the pair.

For technical perspective, RSI indicator remained above 50 then hold at 53 girds, suggesting a bullish trend further. On the other hands, Moving Average indicator give divergently signal for further movement. Short-term indicator ongoing flat momentum, but long-term indicator hold ascending trend that death cross at current stage. Therefore, we expect yen would still lack of price momentum as mixed guidance from indicators. So, according to price action, first resistance would be 104 level, piling by price densely area, the next strong resistance would be 104.25. On slid way, first resistance would be 103.65, confirmative strong price densely area.

Resistance: 104, 104.25

Support: 103.65, 103.54

XAUUSD (4 Hour Chart)

Gold tepid around 1838 as markets looking forward to Biden inauguration and “American Rescue Plan” ahead. In other words, market is really lack of momentum trigger before release any practical contents of rescue plan. On the other hands, 10 years Treasuries yield move slightly then close at 1.09% without any heralded sign.

For technical perspective, short and long-term SMAVG indicator still tamp down, but short one is getting flat at the moment which giving a sputter market guideline. On RSI side, indicator beneath 50 thresholds then close around 47, suggestion a bearish sign. Therefore, combing contrast suggestion from aforementioned technical indicator, we expect gold would haggle at current stage. On slid way, 1823 level be a strong support from longstanding picture.

Resistance: 1844.27, 1856, 1863.44

Support: 1823.4, 1815.08, 1804.15

Economic Data

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