U.S. equities markets attempted to rebound from Wednesday’s sluggish performance but failed to do so during Thursday’s trading session. The Dow Jones Industrial Average fell another 0.75% to close at 31253.13. The S&P500 lost 0.58% to close at 3900.79. The Nasdaq Composite slid 0.26% to close at 11388.5. Market participants poured into U.S. equities at the start of the trading session, but equities could not preserve momentum and began to fall towards the end of the trading session.

U.S. equity markets are set to experience more volatility during the last trading day of the week as option expiration day occurs. According to the CBOE’s calculations, around $1.9 trillion worth of derivatives is set to expire on the 20th– $ 460 billion of single stock derivatives and $855 billion of S&P 500 linked contracts. Options trading volume has reached an all-time high as market participants engage in risk hedging and speculation. The expiring S&P 500 options show a high concentration around the 4000 strikes.

U.S. weekly jobless claims rose to 218,000, compared to 197,000 in the previous report,  marking a four-month high and a potential slow down of the labor market shortage. It is also important to note that while jobless claims have been increasing, continuing claims on the other hand are trending lower—indicating that hiring in the labor market is still active and workers are still experiencing a relatively easy process of switching between jobs. 

Main Pairs Movement

The Dollar index dropped 1% over the previous trading day. Recent weak corporate earnings results from the U.S. and a higher than projected jobless claims figure both helped extend a Dollar correction since last week.

EURUSD rose 1.15% over the previous trading day. Broad-based Dollar weakness buoyed the Euro against the Dollar. EURUSD has recovered close to 2% since dropping to its multi-year low on May 12^th.

GBPUSD rose 1.04% over the previous trading day. The Dollar selloff reversed the large drop in Cable on the 19^th. Bearish sentiment, however, still surrounds Cable as U.K.’s economic outlook continues to look gloomy.

USDCAD dropped 0.49% over the previous trading day. In addition to the broad-based Greenback selloff, the Canadian Loonie continues to rise as global commodity prices climb.

Technical Analysis

EURUSD (4-Hour Chart)

The EUR/USD pair advanced on Thursday, preserving its bullish momentum and extending its rally toward the 1.058 level amid a heavy selloff witnessed in the US dollar. The pair touched a daily low below the 1.047 level heading into the European session but then staged an impressive rebound to recover all of its daily gains. The pair is now trading at 1.0579, posting 1.12% gain on a daily basis. EUR/USD stays in the positive territory amid renewed US dollar weakness, as the falling US Treasury bond yields and disappointing US macro releases both weighed heavily on the greenback. Markets now also seem to have fully priced in at least a 50 bps rate hike move over the next two FOMC meetings. For the Euro, the minutes of the ECB’s Monetary Policy Meeting showed that policymakers are concerned about inflation, reinforcing the speculation that ECB could raise rates at some point in the summer if conditions warrant it.

For the technical aspect, the RSI indicator is 65 figures as of writing, suggesting that the pair is facing heavy bullish momentum as the RSI keeps heading north. As for the Bollinger Bands, the price rose from the moving average and reached the upper band, therefore a continuation of the upside trend can be expected for the pair. In conclusion, we think the market will be bullish as the pair is testing the 1.0555 resistance. A four-hour close above that level will favor the bulls.

Resistance:  1.0555, 1.0622, 1.0728

Support: 1.0461, 1.0359

GBPUSD (4-Hour Chart)

The pair GBP/USD surged on Thursday, gaining upside traction, and climbed to its strongest level in two weeks near 1.251 area amid a weaker US dollar across the board. The pair started to see heavy buying after touching a daily low below the 1.235 level, then extended its daily gains and climbed towards the 1.250 area in the early US trading session. At the time of writing, the cable stays in positive territory with a 1.33% gain for the day. The broad-based US dollar weakness is mainly due to weaker-than-expected US macroeconomic data releases and falling US bond yields, as the headline Manufacturing Activity Index fell to 2.6 in May and well below the market’s expectations for a reading of 16.0. Moreover, the Initial Weekly Jobless Claims also rose to 218K. For the British pound, the BoE tightening discussion will remain a key driver as Tuesday’s upbeat UK labor market report and higher UK Inflation data have revived some bets on BoE tightening.

For the technical aspect, the RSI indicator is 65 figures as of writing, suggesting that the upside is more favored as the RSI is reaching the overbought zone. For the Bollinger Bands, the price regained upside strength and rose from the moving average, indicating that the positive traction should persist. In conclusion, we think the market will be bullish as the pair is testing the 1.2489 resistance. GBP/USD could target 1.2631 if 1.2489 is confirmed as support and the rising RSI also reflects bull signals.

Resistance: 1.2489, 1.2631, 1.2762

Support: 1.2372, 1.2270, 1.2180

USDCAD (4-Hour Chart)

As the Canadian dollar drew support from strong domestic consumer inflation reports and the US dollar remained under bearish pressures, the pair USD/CAD was surrounded by downside momentum and dropped back towards the 1.2800 area. The pair attracted heavy selling during the Asian session, then preserved its downside traction and refreshed its daily low below the 1.2790 level in the early US session. USD/CAD is trading at 1.2803 at the time of writing, losing 0.70% daily. The retreating US Treasury bond yields are acting as a headwind for the US dollar and exerting downward pressure on the USD/CAD pair. On top of that, the surging crude oil prices also provided strong support to the commodity-linked loonie as WTI has recovered back to $110 per barrel area. The easing lockdown restrictions in China and ongoing oil supply concerns have both underpinned the global demand for crude oil.

For the technical aspect, the RSI indicator is 39 figures as of writing, suggesting that downside is more favored as the RSI stays below the mid-line. For the Bollinger Bands, the price resumed its decline and crossed below the moving average, therefore the downside traction should persist. In conclusion, we think the market will be bearish as long as the 1.2890 resistance line holds. On the downside, a four-hour close below the 1.2762 support could open the door for additional losses.

Resistance: 1.2890, 1.2966, 1.3046

Support: 1.2762, 1.2725, 1.2684

Economic Data

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U.S. equities markets fell sharply over the previous trading day. The Dow Jones Industrial Average lost 3.57% to close at 31490.07. The S&P500 dropped 4.04% to close at 3923.68. The Nasdaq composite plummeted 4.73% to close at 11418.16. The Dow Jones’ 3.57% drop marked its biggest loss since 2020 as market participants sold off equities over fears of inflation and slowed growth as the earnings season continue.

Four major U.S. retailers announced Q1 earnings reports this week. While Home Depot was able to beat earnings estimates and raise forward guidance, the others fail to deliver such a positive tone. Walmart and Target both reported a hit to their profits as supply chain issues eat into Q1 profits; furthermore, comments from these two companies paint a sluggish economic outlook. Macy’s, Nordstrom, and Gap are set to release Q1 earnings later in the month. Market participants should pay close attention to these reports as they could reveal key consumer spending information.

On the economic docket, the U.S. is due to release initial jobless claims as well as the Philadelphia Fed Manufacturing Index for May during today’s American trading session. On the 20th the U.K. will release its monthly retail sales figures for April.

Main Pairs Movement

The U.S. Greenback showed broad-based strength over the previous trading day. The Dollar Index snapped its three-day losing streak and gained 0.58% by market close. With Walmart and Target missing earnings estimates, market participants continue to be uncertain about the inflation peak and continue to anticipate further rate hikes by the Fed. Today’s scheduled U.S. initial jobless claims report will paint a better picture of U.S. labor markets.

EURUSD lost 0.8% over the previous trading day. The large-scale sell-off of U.S. equities sparked a flight to safety among market participants, thus buoying the U.S. Dollar. The Fed’s hawkish stance continues to favor the Greenback over the Euro.

The cable dropped 1.22% over the previous trading day. Britain’s CPI figure came in at a 40-year high of 9%, and food and energy prices contributed most to the jump in prices. Previous bearish economic remarks by the BoE and soaring U.K. inflation disfavored the Sterling.

USDCAD climbed 0.6% over the previous trading day. Strengthened Dollar and risk-averse sentiment helped the Dollar snap its three-day losing streak against the Canadian Loonie.

Technical Analysis

EURUSD (4-Hour Chart)

The EUR/USD pair declined on Wednesday, pulling back from weekly highs as the risk-averse market environment underpinned the dollar and helped it stay resilient against its rivals. The pair remained under bearish pressure during the first half of the day, then refreshed its daily low below the 1.0500 mark in the early US session. The pair is now trading at 1.0496, posting 0.47% losses daily. EUR/USD stays in the negative territory amid renewed US dollar strength, as Fed Chair Jerome Powell’s hawkish comments on Tuesday lend support to the greenback. He said that he will back interest rate increases until prices start falling back toward a healthy level. For the Euro, firmer speculation that the ECB could raise rates at some point in the summer should limit the losses for EUR/USD pair. On the economic data side, Eurozone’s Inflation rose 7.4% in April and disappointed the market’s expectations of 7.5%.

For the technical aspect, the RSI indicator is 55 figures as of writing, suggesting that the pair is facing some downside momentum as the RSI started to move south. As for the Bollinger Bands, the price fell from the upper band and dropped towards the moving average, therefore downside movements can be expected for the pair. In conclusion, we think the market will be bearish as the pair is heading to test the 1.04858 support. Further losses could be expected if the pair extends its slide below that support.

Resistance:  1.0555, 1.0622, 1.0728

Support: 1.0485, 1.0359

GBPUSD (4-Hour Chart)

The pair GBP/USD tumbled on Tuesday, struggling to capitalize on its recent strong rebound and attracted aggressive selling after the UK CPI report. The pair lost its upside tractions and dropped to a daily low below the 1.2380 level in the early European session, then rebounded slightly to recover some of its daily losses. At the time of writing, the cable stays in positive territory with a 0.84% loss for the day. The rising US Treasury bond yields and risk-off market mood continued to help the US dollar to fine demand, as Fed Chair Jerome Powell’s hawkish comments reaffirmed the expectations for a more aggressive policy tightening by the US central bank. For the British pound, the UK Consumer Prices Index (CPI) rose to 9% in April, which missed the market’s estimates of 9.1%. The downbeat CPI data have fueled the fears of stagflation and exerted bearish pressures on the GBP/USD pair.

For the technical aspect, the RSI indicator is 53 figures as of writing, suggesting that the risk remains skewed to the downside as the RSI keeps heading south. For the Bollinger Bands, the price resumed its decline and dropped towards the moving average, indicating that the downside traction should persist. In conclusion, we think the market will be bearish as the pair is heading to test the 1.2373 support. Technical indicators have lost their bullish strength and further losses could be expected on a break below that support.

Resistance: 1.2489, 1.2631, 1.2761

Support: 1.2373, 1.2270, 1.2180

USDCAD (4-Hour Chart)

As the downbeat market sentiment underpinned the US dollar and the hotter-than-expected Canadian CPI report failed to push the loonie higher on Wednesday, the pair USD/CAD edged higher and rebounded back towards the 1.285 area. The pair attracted some buying during the Asian session, then preserved its upside momentum and refreshed its daily top in the early US session. USD/CAD is trading at 1.2837 at the time of writing, rising 0.22% daily. The fears about aggressive Fed tightening this year amid Fed Chair Jerome Powell’s hawkish remarks on Tuesday continued to act as a tailwind for the safe-haven greenback. On top of that, the retreating crude oil prices also weighed heavily on the commodity-linked loonie as WTI has dipped back towards the $110 per barrel area. The downturn in macro risk sentiment has undermined the black gold despite further updates showing an easing of lockdown restrictions in Shanghai.

For the technical aspect, the RSI indicator is 39 figures as of writing, suggesting that the downside is more favored as the RSI stays below the mid-line. For the Bollinger Bands, the price failed to cross above the moving average, therefore the downside traction should persist. In conclusion, we think the market will be slightly bearish as the pair is heading to test the 1.2785 support. Sustained weakness below the aforementioned support would make the pair vulnerable to slide towards the next support, around the 1.2725 regions.

Resistance: 1.2902, 1.2966, 1.3046

Support: 1.2785, 1.2725, 1.2687

Economic Data

U.S. stocks rose on Tuesday, helped by a rebound in technology firms, as all three indexes recovered from last week’s heavy selling amid fears about rising inflation and a slowing economy.

The S&P 500 gained 2 %, while the Dow Jones Industrial Average gained 400 points. The tech-heavy Nasdaq Composite Index surged 2.8 % as technology stocks rebounded from Monday’s decline. The S&P 500 had lost six weeks in a row, its longest losing streak in over a decade, and the Dow Jones Industrial Average had lost seven weeks in a row, its greatest one-week drop since 2001.

Walmart Inc. fell to its lowest level in nearly 35 years after lowering its full-year profit forecast owing to inflationary pressures, particularly in food and fuel.

Wall Street’s confidence in Walmart’s capacity to absorb increasing expenses for merchandise, transportation, and labor was shaken by the deteriorating forecast. As a result of growing prices, consumer morale has fallen to its lowest level in a decade, highlighting the pressure on US consumers. Walmart and peers already were facing tough comparisons to early 2021, when federal stimulus payments bolstered household spending during the coronavirus pandemic.

Walmart’s (WMT) stock dropped 11.38 % to $131.39 after the retailer reported a huge loss. During intraday trade, the retailer dropped as much as 11.75%, marking its worst day since 1980. During the 1987 stock market meltdown, Walmart’s shares dropped 11.68 %.

Main Pairs Movement

The dollar was slightly lower across the board as it extended the bearish correction that began on Monday. Optimistic U.S. data helped improve market sentiment, with global indices closing higher. Nonetheless, the potential concerns remain the same. Following Russia’s invasion of Ukraine, tensions between Europe and Russia have remained high. Ukraine has withdrawn from the negotiations, according to Russian Deputy Foreign Minister Andrei Rudenko.

The EUR/USD pair increased to 1.0555. GBP/USD hit 1.2498 and finished the day nearby, with the pound underpinned by a stronger-than-expected UK jobs report. The AUD/USD pair trades above the 0.7000 thresholds, while the USD/CAD extended its slump and trades at 1.2800.
Despite softening gold and oil prices, the stronger performance of equities supported commodity-linked currencies. WTI is now trading at $109 per barrel, while gold has closed at $1,816 per troy ounce.

The USD/JPY pair ended the day little changed at 129.35, while USD/CHF dipped to 0.9938. US Treasury yields increased slightly, with the 10-year note flirting at 3%.

Technical Analysis

EURUSD (4-Hour Chart)

The EUR/USD pair advanced on Tuesday, regaining upside tractions and extending its rebound towards the 1.055 area amid an improved market mood. The pair were flirting with the 1.043~1.045 area in the Asian session, then started to witness upside momentum and touched a daily high above the 1.055 level during the European session. The pair is now trading at 1.0538, posting a 1.03% gain daily. EUR/USD stays in the positive territory amid a weaker US dollar across the board, as the dollar comes under bearish pressure after the overbought condition is seen in the last couple of sessions. On the economic data side, the US Core Retail Sales rose 0.6% MoM in April, which was higher than the 0.4% expected. Klaas Knot, a member of the Governing Council of the European Central Bank, made hawkish remarks in which he stated that the bank should not rule out a 50 basis point rate hike if the data proves it.

For the technical aspect, the RSI indicator is 64 figures as of writing, suggesting that the upside is more favored as the RSI stays above the mid-line. As for the Bollinger Bands, the price moved out of the upper band so a strong bullish trend can be expected. In conclusion, we think the market will be bullish as the pair is heading to test the 1.0568 resistance. Further gains could be expected if the pair extends its advance beyond the aforementioned resistance in the 1.0570 regions.

Resistance: 1.0568, 1.0622, 1.0730
Support: 1.0359

GBPUSD (4-Hour Chart)

The pair GBP/USD surged on Tuesday, witnessing heavy buying, and rose towards the 1.2480 area amid a strong UK labor market report released earlier in the session. The pair stayed quiet in the 1.232~1.235 area during the Asian session, then gathered bullish momentum and climbed to its highest level in more than ten days above 1.249 in the European session. At the time of writing, the cable stays in positive territory with a 1.32% gain for the day. The reports revealing that there are no new coronavirus cases had been reported in Shanghai supported the market sentiment and lifted the cable higher. For the British pound, the data from the UK showed that the Unemployment Rate fell to its lowest since 1974 at 3.7% in the first three months of this year and wages were also up 7.0% YoY in March, which eased some concerns about the vulnerability of consumers.

For the technical aspect, the RSI indicator is 72 figures as of writing, suggesting that the pair is in the overbought zone now, a trend reversal is possible in the near term. For the Bollinger Bands, the price started to fall after touching the upper band, therefore some downside movements could be expected for the pair. In conclusion, we think the market will be slightly bearish as the RSI indicator on the four-hour chart advanced beyond 70, suggesting that the pair might need to make a downward correction before extending its rally.

Resistance: 1.2631, 1.2761

Support: 1.2390, 1.2270, 1.2180

USDCAD (4-Hour Chart)

As the US dollar dropped sharply across the board amid risk appetite on Tuesday, the pair USD/CAD edged lower for the third successive day and remains depressed around the 1.282 area. The pair attracted some selling and touched a daily low below 1.281 level in the European session, then regained upside momentum to recover some of its daily losses. USD/CAD is trading at 1.2827 at the time of writing, losing 0.15% daily. The ongoing US dollar profit-taking exerted bearish pressure on the USD/CAD pair amid a goodish recovery in the equity markets today. On top of that, the rising crude oil prices also underpinned the commodity-linked loonie as WTI rallied into the $115 per barrel area. The easing fears about the lockdown in China and the EU’s embargo on Russian oil imports have both acted as a tailwind for the black gold.

For the technical aspect, the RSI indicator is 35 figures as of writing, suggesting that the pair is facing bearish pressure as the RSI approaches the oversold zone. For the Bollinger Bands, the price failed to stage a rebound and moved alongside the lower band, therefore a continuation of downside traction can be expected. In conclusion, we think the market will be bearish as the pair is heading to re-test the 1.2808 support. A four-hour close below that support could open the door for additional losses toward 1.2750.

Resistance: 1.2902, 1.2966, 1.3046

Support: 1.2808, 1.2725, 1.2687

Economic Data

Investors were concerned that the Fed’s aggressive stance on inflation could force the economy into recession, so equities finished higher Friday, recouping some of the week’s more dramatic losses. All major indices ended the day in the green.

The Dow Jones Industrial Average (DJI) closed at 32,196.66, up 1.5 percent. The S&P 500 index rose 2.4 percent to 4,023.89, reaching bear market territory. The index, on the other hand, had its highest single-day performance since March 4. The top performers were Non-Essential Consumer Discretionary, Energy, and Technology.

The Nasdaq’s 3.8% increase to 11,805 was the largest one-day increase since November 2020. The VIX fell to 28.87 points. The ratio of stocks increasing to stocks falling on the New York Stock Exchange was 3.73:1. The NASDAQ’s 2.91:1 ratio benefited from rising equities. Friday’s volume of 13,32 billion shares was greater than the 20-day average of 13,17 billion shares.

Elon Musk fueled rumors that he may seek to renegotiate his acquisition of Twitter Inc. by stating that a purchase at a lesser price would not be “impossible.”

At the closing of trading in New York, Twitter shares plunged 8.2 percent. The stock has been declining on rumors that Musk may abandon the $43 billion deal. Musk’s questioning of Twitter’s publicly provided data on the number of spam and fraudulent accounts on its social media service has heightened this issue over the past week.

Musk emphasized this point further on Monday at a Miami tech conference, saying that at least 20 percent of Twitter accounts are phony. This was the low end of his estimate for the number of bots on the network, and he wondered rhetorically if it could reach 90 percent, according to a Twitter user’s live video of his remarks. At a recent conference, Musk stated, “I’ve been told that there is currently no method to determine the number of bots.”

Main Pairs Movement

Early in the week, the dollar strengthened, while most of its competitors closed the day with slight losses. European indices were neutral at the closing, while Wall Street managed to get gain. Because of the ongoing tensions with Russia, the bullish potential is restricted. The European Commission revised its projection for negative growth during the Ukraine crisis, with inflation growing higher this year and continuing above the ECB target until 2023 after EU ministers failed to agree on an embargo on Russian oil imports.

Furthermore, Bank of England Governor Andrew Bailey expressed dissatisfaction with the inflation prognosis, claiming that energy and tradable goods were responsible for more than 80% of the UK’s inflation overshoot. Saunders, a Bank of England member, warned that the UK’s exit from the European Union could aggravate inflation.

Due to the continued tensions with Russia, the EUR/USD closed around 1.0430 with limited upward potential. GBP/USD changed hands around 1.2310. AUD/USD traded near 0.6960 with the help of gold, which traded above $1,820 per troy ounce. With crude oil prices surging, USD/CAD fell to 1.2646 and WTI is now trading at $111.30 per barrel.

Technical Analysis

EURUSD (4-Hour Chart)

The EUR/USD pair edged higher on Monday, continuing to rebound slightly from its weakest level since early 2017 near the 1.0350 mark. The pair witnessed some upside momentum and touched a daily high above 1.043 level during the European session, then started to see fresh selling and erased some of its daily gains in the US session. The pair is now trading at 1.0417, posting a 0.08% gain daily. EUR/USD stays in the positive territory amid renewed US dollar weakness, as the softer risk tone and falling US Treasury bond yields both exerted bearish pressures on the safe-haven greenback. On the economic data side, the Empire State Manufacturing Index plunged to -11.6 in May, which marked the largest miss on expectations since April 2020. For the Euro, hawkish comments from ECB’s Villeroy provided support to the EUR/USD, as he expected a decisive policy meeting in June and will carefully monitor developments in the effective exchange rate.

For the technical aspect, the RSI indicator is 45 figures as of writing, suggesting that the pair is in a consolidation phase as the RSI lacks directions. As for the Bollinger Bands, the price is climbing towards the moving average, showing that some upside traction could be expected. In conclusion, we think the market will be slightly bullish as long as the 1.0359 support line holds. A break below that level will favor the bears.

Resistance:  1.0485, 1.0568, 1.0622

Support: 1.0359

GBPUSD (4-Hour Chart)

The pair GBP/USD edged higher on Monday, stabilizing in the 1.2250 area, and went into a consolidation phase ahead of a busy week of US/UK economic events. The pair was trading flat for most of the day and dropped to a daily low in the early European session, then regained some upside traction to recover most of its daily losses. At the time of writing, the cable stays in positive territory with a 0.07% gain for the day. The unexpected decline in the US Empire Manufacturing Index undermined the US dollar, as the disappointing data has resulted in heightened calls that the US might be going into a recession. For the British pound, the prospects that the UK economy could go into recession this year and worsening UK economic outlook might keep acting as a headwind for the GBP/USD.

For the technical aspect, the RSI indicator is 52 figures as of writing, suggesting that the upside is more favored as the RSI keeps heading north. For the Bollinger Bands, the price crossed above the moving average and rose towards the upper band, therefore the upside momentum should persist. In conclusion, we think the market will be bullish as the pair is heading to test the 1.2290 resistance level. A four-hour close above that resistance could be taken as a bullish development and open the door for additional profits toward 1.2390.

Resistance: 1.2290, 1.2390, 1.2631

Support: 1.2180

USDCAD (4-Hour Chart)

As the sliding US bond yields weighed on the US dollar on Monday, the pair USD/CAD declined towards the 1.287 mark and extended its slide that started last week. The pair was trading higher and touched a daily top above the 1.297 level during the Asian session, then started to see heavy selling to surrender all of its intra-day losses. USD/CAD is trading at 1.2871 at the time of writing, losing 0.31% daily. The US dollar lost its upside traction due to a weaker tone surrounding the US Treasury bond yields, which also exerted bearish pressure on the USD/CAD pair. On top of that, the surging crude oil prices also underpinned the commodity-linked loonie as WTI extended its rally towards the $114.00 per barrel area. The Foreign Ministers from both Germany and Austria said that they expect the EU to agree on a deal on the proposed embargo of Russian oil imports later this week.

For the technical aspect, the RSI indicator is 39 figures as of writing, suggesting that the downside is more favored as the RSI stays below the mid-line. For the Bollinger Bands, the price remained under pressure and dropped to the lower band, therefore a continuation of downside traction can be expected. In conclusion, we think the market will be bearish as the pair is testing the 1.2902 support. The falling RSI also reflects bear signals, but a recovery above 1.2966 should change the outlook to bullish.

Resistance: 1.2966, 1.3046

Support: 1.2902, 1.2725

Economic Data

U.S. equity markets rebounded on the last trading day of the week. The Dow Jones Industrial Average rose 1.47% to close at 32196.66. The S&P 500 climbed 2.39% to close at 4023.89. The Nasdaq composite rallied 3.82% to close at 11805. After a week of sell-off, equities are set to recover in the week ahead as “dip buyers” return to the market. The benchmark U.S. 10 year treasury yield has cooled off and is now trading at 2.928%

Cathie Wood’s ARK Innovation ETF popped 11.82% amid a broad technology sector rally. The technology-focused ETF has dropped more than 50% since the beginning of the year and has wiped out most of its gains since 2020. NU Holdings Inc, the cryptocurrency bank, popped 20.5% after the broader cryptocurrency market recovered from the TerraUSD meltdown.

On this week’s economic docket, the UK is set to announce retail sales figures for the month of April on the 17th and CPI data on the 18th. The ECB will announce monetary policy meeting minutes on the 19th and the U.S. will announce initial jobless claims figures on the same day.

Main Pairs Movement

The Dollar Index retreated 0.27% on the last trading day of the week. As the U.S. 10-year treasury yield cooled off so did the U.S. Greenback. With the FOMC meeting scheduled for June 15th, market participants are cherishing a brief period of ease over interest rate fluctuations.

The EURUSD pair rose 0.3% over the course of Friday’s trading. Broad-based weakness of the U.S. Greenback allowed the EURUSD pair to finally find support around the 1.03767 price region.

Cable bounced 0.51% over the course of Friday’s trading. The weaker U.S. Greenback on Friday helped buoy the Pound against the Dollar, despite the U.K.’s gloomy GDP report.

The U.S. Dollar dropped 1.12% against the Canadian Loonie during last Friday’s trading. Commodity prices are again on the rise, thus helping the commodity-linked Canadian currency.

Technical Analysis

EURUSD (4-Hour Chart)

The EUR/USD pair edged lower on Friday, extending its slide and dropping to its weakest level since early 2017 near the 1.0350 level. The pair rebounded slightly towards the 1.042 area during the first half of the day, then started to see fresh selling and surrendered all of its daily gains in the US session. The pair is now trading at 1.0364, posting a 0.05% loss on a daily basis. EUR/USD stays in the negative territory amid renewed US dollar strength, as the rising US Treasury bond yields and the prospects for a more aggressive policy tightening by the Fed have both provided support to the greenback. On the economic data side, the Michigan Consumer Sentiment in May came at 59.1, which fell short of market expectations. For the Euro, the fact that the European Central Bank officials will likely announce a rate hike in July might limit the losses for EUR/USD.

For the technical aspect, the RSI indicator is 32 figures as of writing, suggesting that the pair is facing heavy bearish pressure and the RSI is reaching the oversold zone. As for the Bollinger Bands, the price failed to preserve upside traction and dropped towards the lower band, showing that the downside trend should persist. In conclusion, we think the market will be bearish as the pair is heading to test the 1.0359 support.

Resistance: 1.0524, 1.0622, 1.0728
Support: 1.0359

GBPUSD (4-Hour Chart)

The pair GBP/USD edged higher on Friday, rebounding slightly from fresh two-year lows near the 1.2160 area but still remained under pressure. The pair touched a daily high around 1.2230 level at the start of the European session, then started to witness bearish momentum and dropped towards the 1.2160 mark. At the time of writing, the cable sees some buying and stays in positive territory with a 0.28% gain for the day. The downbeat Consumer Sentiment data exerted some bearish pressure on the US dollar, but the expectations for aggressive policy tightening by the Fed should limit the downside for the greenback. For the British pound, the disappointing UK GDP report released on Thursday and Brexit jitters both acted as a headwind for the GBP/USD, as concerns about UK economic weakness have escalated and resulted in the relatively dovish outlook for BoE’s tightening.

For the technical aspect, the RSI indicator is 35 figures as of writing, suggesting that the downside is more favored as the RSI is reaching the oversold zone. For the Bollinger Bands, the price regained upside traction and rose towards the moving average, therefore some bullish momentum could be expected for the pair. In conclusion, we think the market will be slightly bullish as long as the 1.2180 support line holds. The rising RSI also reflects bull signals. On the downside, a four-hour close below the 1.2180 level could attract sellers and open the door for additional losses.

Resistance: 1.2373, 1.2631, 1.2761
Support: 1.2180

USDCAD (4-Hour Chart)

As the US dollar witnessed fresh selling after the release of the disappointing US Consumer Sentiment data, the pair USD/CAD declined towards the 1.300 mark and extended its daily losses on Thursday. The pair flirted with the 1.300~1.302 area for most of the day, then tumbled to a daily low below the 1.293 level during the US session. USD/CAD is trading at 1.2928 at the time of writing, losing 0.90% on a daily basis. The goodish recovery in the global risk sentiment and the dismal data exerted bearish pressure on the US dollar, which retreated from a two-decade high near 105 level today and dragged the USD/CAD pair lower. On top of that, the surging crude oil prices underpinned the commodity-linked loonie as WTI WTI rallied for the third straight day into the $110.00 per barrel area. The concerns about the EU/Russia gas trade escalated as Gazprom halted flows to some of its European sub-units.

For the technical aspect, the RSI indicator is 42 figures as of writing, suggesting that the downside is more favored as the RSI stays below the mid-line. For the Bollinger Bands, the price moved out of the lower band so a strong trend continuation can be expected. In conclusion, we think the market will be bearish as the pair is heading to test the 1.2902 support. USD/CAD looks bearish in the short term and the falling RSI also reflects bear signals, but a recovery above 1.3046 should change the outlook to bullish.

Resistance: 1.3046, 1.3113
Support: 1.2902, 1.2725, 1.2544

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U.S. equities markets were mixed yesterday. At the beginning of the American trading session, all three major indices rose but only the Nasdaq composite was able to close higher for the day. The Dow Jones Industrial Average lost 0.33% to close at 31730.3. The S&P 500 lost 0.13% to close at 3930.08. The Nasdaq composite gained 0.06% to close at 11370.96. Fed Chair Jerome Powell’s speech yesterday spooked some market participants as he iterated that a “soft landing” was not guaranteed.

The health care sector led gains in the Nasdaq composite. Allena Pharmaceuticals leaped 70.51% and Salarius Pharmaceuticals jumped 38.75%. Meme stocks, made famous by banded retail traders in the summer of 2021, were on the rise again during yesterday’s trading. GameStop and AMC both saw more than an 8% jump in share prices.

The cryptocurrency market experienced a run as the TerraUSD stable coin plummeted below the 30 cents mark. Bitcoin closed more than 6% below Wednesday’s closing price, while Ethereum lost more than 11%. More importantly, as market participants feared a market-wide meltdown, the world’s largest stablecoin, TetherUSD, also lost its peg to the dollar during the European trading session. TetherUSD was soon able to recover, but the same could not be said about TerraUSD. Bitcoin has lost more than 36% of its value since the beginning of the year.

Main Pairs Movement

The Dollar index soared 0.72% higher over the previous trading day. The benchmark U.S. 10-year Treasury yield has cooled off and is currently sitting at 2.859%. Dollar demand remains at an all-time high as global economic growth and geopolitical reasons continue to draw market participants to the Greenback.

The Euro fell sharply against the dollar over the previous trading day. EURUSD lost 1.28% as the Dollar showed its strength across the board. Finland’s request to join NATO has risen geopolitical tensions in the EU to new heights.

GBPUSD lost 0.4% over the previous trading day. Broad market Dollar strength dragged Cable into its sixth straight losing day. The British GDP also confirmed market participants’ fears over slowing economic growth.

USDCAD climbed 0.42% over the previous trading day. The Loonie fared worse against the Dollar as market participants fled to the Greenback for safety.

Technical Analysis

EURUSD (4-Hour Chart)

The EUR/USD pair tumbled on Thursday, dropping to 5-year lows around the 1.040 mark amid the resurgence of geopolitical-led risk aversion. The pair remained under bearish pressure for most of the day and started to see heavy selling at the beginning of the European session, then extended its daily losses in the US session. The pair is now trading at 1.0544, posting a 1.06% loss daily. EUR/USD stays in the negative territory amid renewed US dollar strength, as the safe-haven dollar continued to be underpinned by the panic that took over financial markets as quantitative tightening became the new norm among central banks. For the Euro, the escalating tensions between Russia and the EU might keep acting as a headwind for EUR/USD, as EU member nations Finland and Sweden both decided to end strategic military neutrality to join NATO due to security concerns following Russia’s attack on Ukraine.

For the technical aspect, the RSI indicator is 30 figures as of writing, suggesting that the pair is facing heavy bearish momentum as the RSI reached the oversold zone. As for the Bollinger Bands, the price moved out of the lower band so a strong trend continuation can be expected. In conclusion, we think the market will be bearish as the pair already dropped below the previous support at 1.0485. A break below the next support at 1.0392 should open the door for more losses.

Resistance: 1.0568, 1.0622, 1.0730
Support: 1.0485, 1.0392

GBPUSD (4-Hour Chart)

The pair GBP/USD declined on Thursday, continuing to struggle near its lowest level since May 2020 amid softer UK macro data and a stronger US dollar across the board. The pair extended its slide that started yesterday and dropped to daily lows below the 1.218 level, then rebounded slightly to recover some of its daily losses. At the time of writing, the cable stays in negative territory with a 0.44% loss for the day. The expectations for aggressive policy tightening by the Fed continued to underpin the US dollar and dragged the cable lower, as the concerns about a possible recession due to tight global supply chains have escalated. For the British pound, the UK GDP report showed that the British economy expanded by 0.8% during the first quarter of 2022, which fell short of market expectations and exerted additional bearish pressures on the GBP/USD pair.

For the technical aspect, the RSI indicator is 35 figures as of writing, suggesting that the downside is more favored as the RSI is reaching the oversold zone. For the Bollinger Bands, the price keep moving alongside the lower band, indicating that a continuation of the downtrend could be expected. In conclusion, we think the market will be bearish as the pair is now testing the 1.2180 support. The RSI indicator also highlights the increasing bearish pressure and additional losses could be possible if the support line fails to hold.

Resistance: 1.2373, 1.2631, 1.2761
Support: 1.2280

USDCAD (4-Hour Chart)

As the US dollar continued to be lifted higher by recent hot US inflation data and risk-off market mood, the pair USD/CAD extended its rally towards multi-month highs on Thursday. The pair preserved its upside traction and climbed higher during the European session, then touched a daily top near the 1.306 mark in the US session. USD/CAD is trading at 1.3061 at the time of writing, rising 0.52% daily. The US CPI and PPI data hinted that the Fed will likely press ahead with its current aggressive tightening plans, which weighed heavily on global equities and provided support to the greenback. On top of that, the consolidating crude oil prices failed to revive the commodity-linked loonie as WTI went through a choppy day so far, now sitting near the $105 per barrel area.

For the technical aspect, RSI indicator 62 figures as of writing, suggesting that the upside is more favored as the RSI stays above the mid-line. For the Bollinger Bands, the price regained upside traction and rose towards the upper band, therefore the bullish momentum should persist. In conclusion, we think the market will be bullish as the pair is testing the 1.3046 resistance. A sustained strength above that resistance should open the road for short-term profits.

Resistance: 1.3046, 1.3113
Support: 1.2967, 1.2902, 1.2725