EUR/USD Mid-Session Technical Analysis for April 19, 2021

The Euro surged to its highest level since March 4 on Monday, with Treasury yields near their lowest levels in five weeks, after the U.S. Federal Reserve reiterated its view that any spike in inflation was likely to be temporary.

At 12:22 GMT, the EUR/USD is trading 1.2033, up 0.0051 or +0.43%.

The Euro rose above 1.200 for the first time in over six weeks, touching a high of 1.2048 by midday in London. The European Central Bank meets on Thursday was internal divisions over the pace of bond buying, extended COVID-19 lockdowns and potential delays to the EU recovery fund forming the backdrop, Reuters reported.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out the recently formed main top at 1.1995. A new main bottom was formed at 1.1943. A trade through this level will change the main trend to down.

The short-term range is 1.2243 to 1.1704. The EUR/USD is currently testing its retracement zone at 1.1974 to 1.2037.

The Forex pair is also trading on the strong side of the main retracement zone at 1.1976 to 1.1888. This zone is controlling the near-term direction of the EUR/USD.

Combining these two retracement zones creates a potential support cluster at 1.1976 to 1.1974.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close on Monday is likely to be determined by trader reaction to the Fibonacci level at 1.2037.

Bullish Scenario

A sustained move over 1.2037 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the next minor top at 1.2113. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 1.2037 will signal the presence of sellers. This could trigger a break into the support cluster at 1.1976 – 1.1974. Since the main trend is up, buyers could come in on a test of this area. If 1.1974 fails as support then look for the selling to possibly extend into 1.1888.

For a look at all of today’s economic events, check out our economic calendar.

Oil Price Fundamental Daily Forecast – Renewed Demand Recovery Concerns Weighing on Prices

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging lower on Monday as renewed concerns over rising COVID-19 infections in India and other countries would dampened the on-going demand recovery. However, a weaker U.S. Dollar may be limiting losses. Crude oil is a dollar-denominated commodity that tends to be supported by foreign buyers when the dollar loses value.

At 11:13 GMT, June WTI crude oil is trading $63.08, down $0.11 or -0.17% and June Brent crude oil is at $66.61, down $0.16 or -0.24%.

COVID Cases in India on the Rise

According to reports from Reuters, India reported a record rise in coronavirus infections on Monday which lifted overall cases to just over 15 million, making the country the second-worst affected after the United States, which has reported more than 31 million infections. Meanwhile, deaths from COVID-19 in India also rose to nearly 180,000.

The capital region of Delhi ordered a six-day lockdown on Monday, joining around 13 other states across the country that have decided to impose restrictions, curfews or lockdowns in their cities, Reuters wrote.

“This new wave of measures, while so far likely to be less stringent than what we saw in March 2020, when gasoline and gasoil/diesel demand in the country fell by close to 60%, is nevertheless set to weigh on transportation fuel consumption,” consultancy JBC said.

In other COVID-related news, Hong Kong will suspend flights from India, Pakistan and the Philippines from April 20 due to imported coronavirus infections, authorities said in a statement on Sunday. This will put a further dent in jet fuel demand in the region.

World Health Organization Issues New Warning

The World Health Organization (WHO) warned Friday that the global tally of confirmed cases of the coronavirus-borne illness COVID-19 has almost doubled in the last two months, and is now approaching the highest rate seen since the start of the pandemic. Case numbers are climbing in nearly all regions, including the Americas, with India, Brazil, Poland and Turkey becoming hot spots.

Daily Forecast

Demand concerns are the major story on Monday, but traders are also keeping an eye on talks between the U.S. and Iran amid negotiations toward a new nuclear accord. Traders fear that a new deal between the two countries will mean more Iranian oil will hit the market, raising global supplies.

Traders are also assessing the potential impact of the U.S. sanctions imposed on Russia on the energy trade. Russia is one of the world’s biggest producers of crude and a member of OPEC+.

Finally, on Friday, Baker Hughes released its weekly report that showed the number of active U.S. rigs drilling for oil was up 7 last week at 344. This raises concerns over higher production and more supply.

For a look at all of today’s economic events, check out our economic calendar.

Price of Gold Fundamental Daily Forecast – May Be Poised to Breakout Over $1788.50 if Yields Drop Further

Gold futures are trading at their highest level since February 25 and threatening to break out over a major retracement level at $1788.50 shortly before the New York opening on Monday. After seeing early selling pressure at the start of the week, the precious metal stabilized then surged to the upside in an attempt to reestablish the fresh uptrend.

At 10:43 GMT, June Comex Gold is trading $1787.20, up $7.00 or +0.39%.

Today’s rally is being fueled by a dip in U.S. Treasury yields and a plunge in the U.S. Dollar against a basket of major currencies. Additionally, now that the technical double-bottom has been confirmed, we’re starting to see more speculative interest from trend and momentum traders. The overall bullish theme, however, is being driven by investors buying into the idea that the Fed will maintain an accommodative monetary policy for a long time and that any spike in economic growth, especially inflation, will be “transitory”.

In other news, speculators cut their bullish positions in COMEX gold and raised them in silver contracts in the week to April 13, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

Treasury Yields Start the Week Lower as Retreat Continues

U.S. Treasury yields ebbed lower on Monday morning, continuing to fall from recent highs. The yield on the benchmark 10-year Treasury note fell to 1.564% at 08:15 GMT. The yield on the 30-year Treasury bond dipped to 2.253%, CNBC reported.

The drop in Treasury yields drove the U.S. Dollar Index into its lowest level since March 3 as the heavy selling pressure threatened to trigger an acceleration to the downside. A weaker U.S. Dollar tends to drive up foreign demand for dollar-denominated gold.

Daily Forecast

With Treasury yields and the U.S. Dollar seemingly positioned to accelerate to the downside, gold sits in a similar position, but poised to breakout above the $1788.50 resistance level with the next target price $1817.60.

The direction of prices the rest of the session on Monday should be determined by trader reaction to $1788.50.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Forex Technical Analysis – Sustained Move Over .7728 Could Trigger Surge into .7770 – .7826

The Australian Dollar is trading nearly flat on Monday after clawing back earlier losses. The weakness after the opening was fueled by follow-through selling after Friday’s weak close. The price action the last two sessions is basically mirroring the movement in U.S. Treasury yields and the U.S. Dollar as both try to stabilize following steep drops the past two weeks.

At 06:06 GMT, the AUD/USD is trading .7734, unchanged.

The Aussie surged and the trend changed to up last week when the country reported strong labor market results.

Data from the Australian Bureau of Statistics (ABS) showed 70,700 net new jobs were created in March, double forecasts of a 35,000 gain. Unemployment dropped to 5.6%, from 5.8% in February, marking a remarkable recovery from the top of 7.5% hit last July when coronavirus lockdowns tipped the economy into recession.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7761 will signal a resumption of the uptrend. A trade through .7586 will change the main trend to down.

The main range is .8007 to .7532. Its retracement zone at .7770 to .7826 is resistance. This area is also controlling the near-term direction of the AUD/USD.

The short-term range is .7849 to .7532. The AUD/USD is currently testing its retracement zone at .7690 to .7728 with buyers trying to establish a new higher support base.

The minor range is .7532 to .7761. Its 50% level or pivot at .7646 is potential support.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at .7728.

Bullish Scenario

A sustained move over .7728 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into .7761 to .7770. The latter is a potential trigger point for an acceleration into the main Fibonacci level at .7826.

Bearish Scenario

A sustained move under .7728 will signal the presence of sellers. The first downside target is a 50% level at .7690. Since the main trend is up, buyers are likely to come in on a test of this level.

If .7690 fails as support then look for the selling to possibly extend into the minor 50% level at .7646.

For a look at all of today’s economic events, check out our economic calendar.

NZD/USD Forex Technical Analysis – Strengthens Over .7145, Weakens Under .7106

The New Zealand Dollar is inching lower early Monday, following through to the downside after Friday’s weak close. A stagnant U.S. Treasury market, the lack of fresh economic data and profit-taking are likely behind today selling pressure. Some traders also feel that last week’s surge to the upside was a little overextended given that the U.S. economy is in a position to outperform the New Zealand economy at least over the near-term.

At 05:33 GMT, the NZD/USD is trading .7143, down 0.0003 or -0.04%.

Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up last week when the NZD/USD blasted through .7070. A trade through .7180 will signal a resumption of the uptrend, while a move through .6997 will change the main trend to down.

The main range is .7465 to .6943. Its retracement zone at .7204 to .7266 is the primary upside target and potential resistance. This area is also controlling the near-term direction of the NZD/USD.

The short-term range is .7270 to .6943. The NZD/USD is currently trading inside its retracement zone at .7106 to .7145.

The minor range is .6943 to .7180. Its 50% level at .7061 is a potential downside target and support price.

The major support zone comes in at .7027 to .6924.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Monday is likely to be determined by trader reaction to .7145.

Bearish Scenario

A sustained move under .7145 will indicate the presence of sellers. This could trigger a break into .7106. Since the main trend is up, buyers could come in on a test of this level. If it fails to hold then look for the selling to possibly extend into the next 50% level at .7061.

Bullish Scenario

A sustained move over .7145 will signal the presence of buyers. If this move creates enough upside momentum then look for the buying to possibly extend into the main top at .7180.

Taking out .7180 will reaffirm the uptrend with .7204 to .7266 the next likely target zone.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Forex Technical Analysis – Trade Through 108.407 Changes Main Trend to Down with 108.230 Next Target

The Dollar/Yen is trading lower early Monday after failing to confirm the previous session’s closing price reversal bottom. The move has put the Forex pair within striking distance of a change in trend.

Lower Treasury yields and the lack of fresh economic news is behind today’s early weakness. The price action also suggests that investors believe the Fed’s assessment of the economy in that any surge in inflation is likely to be “transitory” and therefore, rates are going to remain at historically low levels.

At 05:01 GMT, the USD/JPY is trading 108.662, down 0.131 or -0.12%.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum is trending lower. A trade through 108.407 will change the main trend to down.

A move through 110.966 will signal a resumption of the uptrend. This is highly unlikely, but since the Forex pair is down 13 sessions from this main top, traders should start watching for a closing price reversal bottom. We saw one on Friday, but the move wasn’t convincing enough to attract any buyers.

The minor trend is down. This is controlling the momentum. A trade through 109.961 will change the minor trend to up.

The main range is 111.715 to 102.593. The USD/JPY is hovering just above its retracement zone at 108.230 to 107.154. Since this is a potential support area, watch for buyers to show up on a test of this zone.

The short-term range is 108.407 to 110.966. Its retracement zone at 109.385 to 109.687 is a potential upside target and resistance area.

Daily Swing Chart Technical Forecast

The direction of the USD/JPY on Monday is likely to be determined by trader reaction to 108.966.

Bearish Scenario

A sustained move under 108.966 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the main bottom at 108.407.

Taking out the main bottom will change the main trend to down, setting up a possible extension of the selling into the main Fibonacci level at 108.230. Look for buyers on the first test. If this level fails as support then look for the start of a break toward the main 50% level at 107.154.

Bullish Scenario

A sustained move over 108.966 will signal the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into the short-term retracement zone at 109.385 to 109.687.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Forex Technical Analysis – Could Be Setting Up for Pullback into 1.1888 or Lower

The Euro is edging lower early Monday as investors prepare for Thursday’s European Central Bank interest rate and monetary policy announcements and Friday’s important Euro Zone PMI reports. Later today, investors will get the opportunity to react to the latest Euro Zone Current Account and German Buba Monthly reports.

At 04:35 GMT, the EUR/USD is trading 1.1958, down 0.0024 or -0.20%.

According to the Financial Times, “When ECB policymakers meet on Thursday, they will be painfully aware that the Eurozone economy is still being held back by lockdowns to tackle rising coronavirus infections while the U.S., China and the U.K. are reopening and rebounding faster.”

Christine Lagarde, ECB president, last week compared the Eurozone with a patient walking out of intensive care with the support of two crutches.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up last week when buyers took out a pair of swing tops at 1.1989 and 1.1990, however, there wasn’t much of a follow-through on the move with the common currency stopping at 1.1995. A trade through this level will signal a resumption of the uptrend. Meanwhile, the main trend will change to down on a move through the nearest main bottom at 1.1704.

The short-term range is 1.2243 to 1.1704. Its retracement zone at 1.1974 to 1.2037 is resistance. This zone stopped the rally last week at 1.1995.

The main range is 1.1603 to 1.2349. The EUR/USD is currently trading inside its retracement zone at 1.1976 to 1.1888. This area is controlling the near-term direction of the Forex pair.

The minor range is 1.1704 to 1.1995. Its retracement zone at 1.1849 to 1.1815 is another potential downside target area.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Monday is likely to be determined by trader reaction to the 50% level at 1.1976.

Bearish Scenario

A sustained move under 1.1976 will indicate the presence of sellers. If this move is able to generate enough downside momentum then look for the selling to possibly extend into the Fibonacci level at 1.1888, followed by the retracement zone at 1.1849 to 1.1815. Since the main trend is up, buyers are likely to come in on a test of this area.

Bullish Scenario

A sustained move over 1.1976 will signal the presence of buyers. Taking out 1.1995 will reaffirm the uptrend. This could trigger a surge into 1.2037. This level is a potential trigger point for an acceleration to the upside.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Dollar Index (DX) Futures Technical Analysis – Weakens Under 91.555, Strengthens Over 91.870

The U.S. Dollar is trading slightly better against a basket of major currencies early Monday. However, the greenback is still holding very close to a one-month low hit last week. Furthermore, Treasury yields, the main driver of the dollar, are hovering just above their lowest levels in five weeks.

Continuing to keep a lid on yields and the greenback is the dovish Federal Reserve monetary policy. Even with U.S. Consumer Inflation and Retail Sales coming in well-above expectations, and weekly initial claims hitting a level not seen since last year, Federal Reserve officials reiterated last week its view that any spike in inflation was likely to be temporary.

At 04:12 GMT, June U.S. Dollar Index futures are trading 91.660, up 0.116 or +0.13%.

Last week’s steep sell-off marked the second straight weekly loss for the dollar index and indicated that investors have accepted the Fed’s conclusion that the expected surge in inflation is likely to be transitory.

Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on March 31.

A trade through 91.290 will change the main trend to down, while a move through 93.470 will signal a resumption of the uptrend. Due to the prolonged move down in price and time, the market is susceptible to a closing price reversal bottom. If confirmed, this could trigger a 2 to 3 day counter-momentum rally.

The minor trend is also down. A trade through 91.810 will change the minor trend to up. This will also shift momentum to the upside.

The short-term range is 89.655 to 93.470. The index is currently testing its retracement zone at 91.555 to 91.100.

The main range is 94.590 to 89.155. Its retracement zone at 91.870 to 92.510 is potential resistance. This zone is also controlling the near-term direction of the index.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index on Monday is likely to be determined by trader reaction to the short-term 50% level at 91.555.

Bullish Scenario

A sustained move over 91.555 will indicate the presence of buyers. The first upside target is 91.810, followed closely by 91.870. Sellers could come in on the first test of this level, but taking it out could trigger an acceleration into 92.365 to 92.510.

Bearish Scenario

A sustained move under 91.555 will signal the presence of sellers. Taking out 91.470 could trigger a break into the main bottom at 91.290, followed closely by the Fibonacci level at 91.100. This is a potential trigger point for an acceleration to the downside with 90.620 the next target.

For a look at all of today’s economic events, check out our economic calendar.

Look Out: Inflation Impact on Earnings, Peloton Treadmills, Cryptocurrency Bubble Concerns to Drive Volatility

Corporate earnings will be the major focus in the week ahead, with investors especially zeroed-in on the impact of rising costs on margins. Investors will be looking for evidence that inflationary pressures are already having a negative influence on corporate profit margins.

CNBC is reporting that from Coca-Cola and IBM to Johnson & Johnson and Netflix, investors will hear from a broad swatch of corporate America. So far, with one week in, companies are beating earnings estimates by a wide margin of more than 84%, according to Refinitiv.

This three-month period is the first to be compared to year earlier profits that were affected by the pandemic. Profit growth for the S&P 500 is a stunning 30.2% for the quarter so far, based on actual reports and estimates. That makes it the best three-month period since the third quarter of 2010, according to FactSet.

In other news, the U.S. Consumer Product Safety Commission (CPSC) on Saturday warned consumers about the dangers of Peloton’s treadmill Tread+ after reports of multiple incidents of small children and a pet being injured beneath the machines.

The price of bitcoin tumbled over the weekend and was down as much as 19.5% from record highs posted by the popular cryptocurrency in the past week. The move comes after new concerns of a bubble in the cryptocurrency market.

US Regulators Warn Consumers on Dangers of Peloton’s Treadmill

Peloton shares could take a major hit on Monday after a warning from a key government safety agency.

“CPSC staff believes the Peloton Tread+ poses serious risks to children for abrasions, fractures, and death,” the safety regulator said in a statement, adding that consumers with children should stop using the product immediately.

Peloton in a response to the regulator’s statement said it was “troubled by the CPSC’s unilateral press release about the Peloton Tread+ because it is inaccurate and misleading.”

The company said there was no reason to stop using the Tread+, but children under 16 should not use the treadmill.

The regulator said it was aware of 39 incidents including one death and was investigating all known incidents related to the Peloton Tread+.

Bitcoin Tumbles from Recent High as Cryptocurrencies Take Weekend Hit

The price of Bitcoin dropped as low as $52,148.98 on Sunday morning, days after reaching an all-time high above $64,800. Ether and Dogecoin also saw their prices drop, following a week in which investors worried that the cryptocurrency market was in a bubble.

An unverified report on Twitter claimed that the U.S. Treasury Department could be looking to crack down on financial institutions for money laundering using cryptocurrency.

Coinbase shares could drop on the news since it could mean the cryptocurrency market could face tougher U.S. regulation. Last week, it became the largest cryptocurrency company to go public.

For a look at all of today’s economic events, check out our economic calendar.

Gold Price Futures (GC) Technical Analysis – Sellers Defending $1788.50 Long-Term 50% Level

Gold futures are edging lower on Monday after an early session attempt to take out Friday’s high was met with selling pressure. Treasury yields are dipping lower early in the session, but the U.S. Dollar is trading higher against a basket of currencies, suggesting we could be seeing early signs of a risk off trading session.

At 01:30 GMT, June Comex gold futures are trading $1776.60, down $3.60 or -0.20%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1784.70 will signal a resumption of the uptrend. The main trend will change to down on a move through $1723.20.

On the upside, the major resistance is the long-term 50% level at $1788.50.

On the downside, the support is a series of 50% levels at $1767.60, $1754.00, $1746.90 and $1731.00. The major support is the long-term 61.8% level at $1711.90.

Daily Swing Chart Technical Forecast

The direction of the June Comex gold futures contract on Monday is likely to be determined by trader reaction to the long-term 50% level at $1788.50.

Bearish Scenario

A sustained move under $1788.50 will indicate the presence of sellers. The first downside target is the 50% level at $1767.60. Since the main trend is up, buyers are likely to come in on the first test of $1767.50. If it fails then look for the selling to possibly extend into a minor 50% level at $1754.00. Once again, buyers could step in to stop the price slide.

Bullish Scenario

A sustained move over $1788.50 will signal the presence of buyers. This move could trigger an acceleration to the upside with $1817.60 the next likely upside target price.

Side Notes

For bigger picture traders, the retracement zone at $1788.50 to $1711.90 represents 50% to 61.8%, respectively, of last year’s trading range. So overtaking $1788.50 could become a big deal if the buying volume increases on the move. Fundamentally, it’s going to need help from lower yields and a weaker U.S. Dollar. I don’t think gold will be able to sustain a rally over $1788.50 without help from those two factors.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Price Update – Strengthens Over $63.47, Weakens Under $62.29

U.S. West Texas Intermediate crude oil futures are inching lower early Monday, following a 6% gain last week. The market is being supported by friendly demand outlooks from IEA and OPEC and a rapidly improving global economy. However, lingering concerns over rising COVID-19 cases may be keeping a lid on prices, suggesting the weakness is being fueled by profit-taking.

At 01:04 GMT, June WTI crude oil futures are trading $62.83, down $0.36 or -0.57%.

Daily June WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through $66.15 will change the main trend to up. A move through $57.29 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. The minor trend will change to down on a trade through $57.68. A new minor top has formed at $63.94. A trade through this price will reaffirm the minor trend.

The short-term range is $67.29 to $57.29. The market is currently testing its retracement zone at $62.29 to $63.47. Sellers are trying to form a potentially bearish secondary lower top. Buyers are trying to drive the market higher.

The minor range is $57.29 to $63.94. Its 50% level at $60.61 is a potential support price.

The main range is $67.29 to $51.04. Its retracement zone at $59.17 to $57.25 is potential support. It’s also controlling the near-term direction of the market.

Daily Swing Chart Technical Forecast

The direction of the June WTI crude oil market on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at $63.47.

Bearish Scenario

A sustained move under $63.47 will indicate the presence of sellers. The first potential downside target is the short-term 50% level at $62.29.

Buyers could come in on the first test of $62.29, but if it fails then look for the selling to possibly extend into the minor 50% level at $60.61.

Bullish Scenario

A sustained move over $63.47 will signal the presence of buyers. The first upside target is the minor top at $63.94. Overtaking this level could trigger the start of a drive into $66.15, followed by $67.20.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Fundamental Daily Forecast – Technical Reversal Could Be Signaling Weakening Selling Pressure

The Dollar/Yen finished higher on Friday after the Forex pair touched its lowest level since March 24 early in the session. The move produced a technical closing price reversal bottom that could be the first sign that the buying is greater than the selling at current price levels.

On Friday, the USD/JPY settled at 108.793, up 0.030 or +0.03%.

The price action was driven by a rebound in U.S. Treasury yields that helped the U.S. Dollar stabilize after a second consecutive week of losses.

U.S. Treasury yields bounced back on Friday after the 10-year rate slipped to 1.53% in the previous session. Near the end of the session, the yield on the benchmark 10-year Treasury note rose to 1.587%. Earlier in the month, the 10-year Treasury yield recently topped 1.70%.

US Economic News

U.S. housing starts surged 19.4% to a seasonally adjusted annual rate of 1.739 million units last month, the highest level since June 2006. Economists polled by Reuters had forecast starts would rise to a rate of 1.613 million units in March.

Permits for future home building rose 2.7% to a rate of 1.766 million units last month, recouping only a fraction of February’s 8.8% plunge. They jumped 30.2% compared to March 2020.

Inflation concerns were on consumers’ minds early this month. A separate report from the University of Michigan on Friday showed its preliminary consumer sentiment index rose to 86.5 from a final reading of 84.9 in March. Economists had forecast the index would rise to 89.6.

Finally, the survey’s one-year inflation expectation jumped to 3.7%, the highest level in nearly a decade, from 3.1% in March. Its five-year inflation outlook was unchanged at 2.7%.

Japan Economic News

In Japan, Preliminary Machine Tool Orders came in at 65.0%, up from 36.7%. Core Machinery Orders, however, fell 8.5%, missing the 2.4% forecast and coming in below the previously reported -4.5%.

Japan’s core machinery orders unexpectedly fell 8.5% in February from the previous month, posting a second straight month of declines, government data showed last week.

The fall in core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, compared with a forecast of 2.8% growth in a Reuters poll of economists, the Cabinet Office data showed.

On a year-on-year basis, core orders, which exclude those for ships and electric utilities, declined 7.1% in February, versus a 2.3% gain expected by economists.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD and NZD/USD Fundamental Daily Forecast – Stable Greenback Caps Aussie, Kiwi

The Australian and New Zealand Dollars broke out of a tight range to hit three-week highs last week as their U.S. counterpart extended its broad retreat and upbeat data suggested the Australian economy had grown strongly last quarter. The Kiwi just went along for the ride as a dovish central bank and business survey pointed toward a weak economy. On Friday, both currencies suffered small losses as traders squared positions ahead of the weekend.

On Friday, the AUD/USD settled at .7734, down 0.0017 or -0.22% and the NZD/USD finished at .7146, down 0.0025 or -0.35%.

US Economic News

The Aussie and Kiwi were pressured on Friday as U.S. Treasury yields rebounded after the 10-year rate slipped to 1.53% in the previous session. The move helped stabilize the U.S. Dollar, which had been down most of the week.

The yield on the benchmark 10-year Treasury note rose to 1.587%. The yield on the 30-year Treasury bond climbed to 2.275%. The 10-year Treasury yield recently dropped 1.7%, while the 30-year government bond rate traded above 2.5%, amid concerns about rising inflation.

Housing starts jumped 19.4% month-over-month in March, according the Commerce Department, while building permits rose 2.7%. The University of Michigan’s consumer sentiment index rose in April to 86.5 from 84.9 a month prior.

On Thursday, data from the Commerce Department showed U.S. retail sales jumped 9.8% in March. This was well above the Dow Jones estimate of 6.1% growth. Meanwhile, the Labor Department reported that there were 576,000 new jobless claims filed for the week ended April 10. This was the lowest number of new weekly unemployment insurance claims since March 2020 and well below the 710,000 forecast by economists.

New Zealand Economic News

The Business NZ Purchasing Managers’ Index (PMI) came in at 63.6, up 9.4 points from February, and the highest monthly result since the survey began in 2002.

BusinessNZ’s executive director for manufacturing Catherine Beard said, “The two major sub-index values of Production (66.8) and New Orders (72.5) were the main drivers of the March result, with the latter experiencing its first post 70-point value. This does not indicate a swift shift in demand over a relatively short time, which may indicate a move towards previously shelved projects and business ventures that have now been given the green light.”

“Given the strong March result, the proportion of those outlining positive comments increased significantly from 46% in February to almost 58% in March. Unsurprisingly, comments were centered towards increased demand both domestically and offshore”.

BNZ Senior Economist Doug Steel said, “More demand is one thing, but meeting it is another. Firms have faced many supply-side challenges. In this regard, it is interesting to see PMI deliveries of raw materials lifted strongly, to 62.8 this month. That coincides with other data showing imports leapt more than 17% above year earlier levels in March following prior weakness”.

For a look at all of today’s economic events, check out our economic calendar.

E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – New Support Moves Up to 13786.00

June E-mini NASDAQ-100 Index futures finished slightly higher on Friday. The index hit a new record high during the session, but it was a struggle with tech behemoths Apple Inc, Amazon.com Inc, Tesla Inc and Microsoft Corp, slipping between 0.2% and 1.5%. In the cash market, the technology-heavy NASDAQ Composite finished less than one percent below its own all-time closing high achieved on February 12.

On Friday, June E-mini NASDAQ-100 Index futures settled at 14029.50, up 15.50 or +0.11%.

The Federal Reserve’s pledge to keep interest rates low despite inflation has also revived demand for richly valued technology stocks, although bond yields edged higher again on Friday after hitting multi-week lows a day earlier.

Daily June E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Friday when buyers took out Thursday’s high at 14034.25.

A trade through 12609.75 will change the main trend to down. This is highly unlikely, but due to the prolonged move up in terms of price and time, the index closed on Friday inside the window of time for a potentially bearish closing price reversal top.

The minor trend is also up. A trade through 13512.50 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is 13512.50 to 14059.50. Its 50% level at 13786.00 is the nearest support.

The main range is 12609.75 to 14059.50. If the minor trend changes to down then look for the selling to possibly extend into its retracement zone at 13334.50 to 13165.50.

Short-Term Outlook

The uptrend is very strong and it’s going to take some time to change the main trend to down. However, a higher-high, lower-close will be the first sign of selling pressure. The formation of a closing price reversal top chart pattern will give investors an early warning to start trimming long positions.

Some aggressive traders will choose to use this chart pattern as a shorting opportunity. This will be much better than trying to pick a top. However, keep in mind that a closing price reversal top does not change the trend. It only indicates the selling is greater than the buying at current price levels.

The daily chart currently indicates that a combination of a closing price reversal top and a sustained move under 13786.00 could trigger the start of a steep break with 13334.50 the minimum objective.

For a look at all of today’s economic events, check out our economic calendar.

Natural Gas Price Fundamental Daily Forecast – Supported by Strong LNG Volumes, Cooler Temps

Natural gas futures moved higher on Friday, cementing a strong weekly gain. The market hits its highest level since March 12 on the back of increased weather-driven demand and strong liquefied natural gas (LNG) volumes. Perhaps putting a lid on the rally was a 2.0 cent drop in Natural Gas Intelligence’s (NGI) Spot Gas National Average.

On Friday, June natural gas settled at $2.754, up $0.024 or +0.88%.

Daily June Natural Gas

LNG Feed Gas Volumes Remain Supportive

NGI reported that LNG feed gas volumes hovered close to 2021 highs and above 11 Bcf on Friday, as export destinations in Asia and Europe continued to buy up U.S. supplies of the super-chilled fuel. Pipeline exports to Mexico also held strong, hanging near 7 Bcf.

Short-Term Weather Outlook

“Overnight, the European model continued to shift significantly cooler, adding 21.3 HDDs over the past 24 hours and extending cooler-than-normal weather through the end of April,” EBW Analytics Group said Friday.

The American model was essentially flat over the same period, EBW noted. It called for cooler temperatures over the coming week but a return to mild spring weather before the end of the month.

US Energy Information Administration Weekly Storage Report

The EIA reported on Thursday that domestic supplies of natural gas rose by 61 billion cubic feet (Bcf) for the week ended April 9. That compares with an average increase of 65 Bcf forecast by analysts polled by S&P Global Platts.

Total stocks now stand at 1.845 trillion cubic feet (Tcf), down 242 Bcf from a year ago but 11 Bcf above the five-year average, the government said.

Daily Forecast

Technically, the main trend changed to up. If the upside momentum continues then look for the move to possibly extend into a key 50% to 61.8% retracement zone.

The February 17 top is $3.082. The March 18 bottom is $2.521. Its retracement zone at $2.802 to $2.868 is the next likely upside target. Sellers could come in on a test of this area.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Currencies Rise after US Benchmark 10-year Treasury Yield Dipped to One-Year Low

A combination of factors helped the Asia-Pacific currencies post strong gains last week, including a drop in U.S. Treasury yields, a weaker U.S. Dollar and solid economic data in the United States, China and Australia.

The U.S. Dollar posted losses against the Japanese Yen, Australian Dollar and New Zealand Dollars amid an extended retreat in Treasury yields as investors increasingly bought into the Federal Reserve’s insistence of keeping an accommodative policy stance for a while longer.

The benchmark 10-year Treasury yield dipped to a one-month low of 1.528% overnight, moving further away from over a one-year of 1.776% reached at the end of last month, even in the face of Thursday’s stronger-than-expected retail sales and employment data.

U.S. retail sales increased 9.8% last month, beating economists’ expectations for a 5.9% rise, while first-time claims for unemployment benefits tumbled last week to the lowest level in more than a year, separate reports showed on Thursday.

Australian Dollar

The Australian Dollar hit a three week high last week as Australia’s Westpac Consumer Sentiment Index climbed 6.2% to 118.8 in April, up from a month earlier. This marked the highest level since August 2010.

Australian employment data also cemented confidence that the economic recovery was in full swing. Data showed job creation again far outstripped expectations in March as unemployment dropped to a one-year low and the total number of employed passed its pre-pandemic peak.

The data from the Australian Bureau of Statistics (ABS) showed 70,700 net new jobs were created in March, double forecasts of a 35,000 gain. Unemployment dropped to 5.6%, from 5.8% in February, marking a remarkable recovery from the top of 7.5% hit last July when coronavirus lockdowns tipped the economy into recession.

Last week, the AUD/USD settled at .7734, up 0.0115 or +1.51%.

New Zealand Dollar

New Zealand’s central bank left all its current policy settings unchanged last week, saying monetary stimulus should continue to ensure its inflation and employment targets are met.

The Reserve Bank of New Zealand (RBNZ) also said it needed time to observe the impact of new housing market measures and a gradual revival in tourism on its recovering economy.

It kept the official cash rate (OCR) at a record low of 0.25%, while also continuing the NZ$100 billion ($70.55 billion) quantitative easing and Funding for Lending Program (FLP) tools, both introduced last year to support a market hit by the COVID-19 pandemic.

In other news, New Zealand’s actual business confidence figures declined in the first quarter of the year although other parameters improved, suggesting a continued recovery in sentiment, a private think tank said on Tuesday.

A net 13% of firms surveyed expected general business conditions to deteriorate compared with 6% in the previous quarter, the New Zealand Institute of Economic Research’s (NZIER) quarterly survey of business opinion (QSBO) showed.

Last week, the NZD/USD settled at .7146, up 0.0111 or +1.57%.

Japanese Yen

In Japan, Preliminary Machine Tool Orders came in at 65.0%, up from 36.7%. Core Machinery Orders, however, fell 8.5%, missing the 2.4% forecast and coming in below the previously reported -4.5%.

Japan’s core machinery orders unexpectedly fell 8.5% in February from the previous month, posting a second straight month of declines, government data showed last week.

The fall in core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, compared with a forecast of 2.8% growth in a Reuters poll of economists, the Cabinet Office data showed.

On a year-on-year basis, core orders, which exclude those for ships and electric utilities, declined 7.1% in February, versus a 2.3% gain expected by economists.

Last week, the USD/JPY settled at 108.793, down 0.866 or -0.79%.

For a look at all of today’s economic events, check out our economic calendar.

E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Vulnerable to Reversal Top

June E-mini Dow Jones Industrial Average futures rallied on Friday, setting another record in the process amid strong earnings from blue-chip companies especially the bank stocks, which continued to rise on bumper quarterly earnings reports.

Morgan Stanley reported a 150% jump in quarterly profit on Friday, helping to boost the performance of Dow components JPMorgan Chase & Co and Goldman Sachs Group as investors continued to bet on a swift economic recovery.

On Friday, June E-mini Dow Jones Industrial Average futures settled at 34081, up 158 or +0.46%.

In other news, the University of Michigan said Friday its preliminary consumer sentiment index rose to a one-year high of 86.5 in the first half of this month form 84.9 in March. Additionally, Federal Reserve Governor Christopher Waller said Friday the U.S. economy is set to take off, but there’s still no reason to start tightening policy.

Daily June E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Friday when buyers took out the previous high at 33862. A trade through 34144 on Monday will signal a resumption of the uptrend.

A trade through 31951 will change the main trend to down. This is highly unlikely but due to the prolonged move up in terms of price and time, the Dow is ripe for a closing price reversal top.

We’re not going to guess when the pattern will form. We’re not going to sell a new high and hope for a lower close. We’re likely to let it form first then wait for the confirmation. The uptrend is strong so it doesn’t make sense to try to guess until we start to see evidence of sellers.

We do suspect, however, that the top won’t be formed by economic data, but rather a surprise event. Something has to happen that will create enough uncertainty to encourage the longs to start trimming positions.

Short-Term Outlook

A higher-high, lower-close will be the best sign that the selling is greater than the buying at current price levels. The next best sign will be a lower-low, which will make 34144 a new minor top.

A third sign of a top will be the failure to hold the minor 50% level at 33651.

For a look at all of today’s economic events, check out our economic calendar.

Oil Price Fundamental Daily Forecast – Lower Close Suggests Weak Start on Monday

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures edged lower on Friday but still managed to finish higher for the week. Nonetheless, the markets did post potentially bearish chart patterns on their daily charts, which could put early pressure on them early Monday.

On Friday, June WTI crude oil settled at $63.19, down $0.32 or -0.50% and June Brent crude oil ended the session at $66.77, down $0.17 or -0.25%.

Traders said that prices were likely underpinned by the news that China’s first-quarter gross domestic product jumped 18.3% year-on-year. That news followed a big increase in U.S. retail sales and a drop in unemployment claims released on Thursday.

The big up move for the week, however, was fueled by positive oil demand growth outlooks by both the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) and a bigger-than-expected draw in this week’s government inventories report.

The International Energy Agency (IEA) and OPEC upwardly revised their global oil demand growth forecasts for 2021 this week to 5.7 million barrels per day (bpd) and 5.95 million bpd respectively.

“Fundamentals look decidedly stronger,” the IEA said in its monthly report.

“The massive overhang in global oil inventories that built up during last year’s COVID-19 demand shock is being worked off, vaccine campaigns are gathering pace and the global economy appears to be on a better footing.”

“As the spread and intensity of the COVID-19 pandemic are expected to subside with the ongoing rollout of vaccination programs, social distancing requirements and travel limitations are likely to be scaled back, offering increased mobility,” OPEC said in the report.

“The global economic recovery continues, significantly supported by unprecedented monetary and fiscal stimulus,” OPEC said. “The recovery is very much leaning towards the second half of 2021.”

U.S. crude oil stockpiles dropped more than expected as refiners increased activity heading into the summer driving season, the Energy Information Administration (EIA) said on Wednesday.

Crude inventories fell by 5.9 million barrels in the week to April 9 to 492.4 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.9 million-barrel drop.

U.S. gasoline stocks rose 309,000 barrels in the week to 234.9 million barrels, less than analysts’ expectations for a 786,000-barrel rise.

Distillate stockpiles, which include diesel and heating oil, fell by 2.1 million barrels versus forecasts for a 971,000-barrel rise, the EIA data showed.

Refinery utilization rates rose by 1 percentage point to 85% of overall capacity. That is the highest since March of last year, just before the coronavirus pandemic caused refiners to severely restrict processing activities as demand dove.

For a look at all of today’s economic events, check out our economic calendar.

Wall Street Closes Higher Friday as S&P 500, Dow Hit Record Highs

The major U.S. stock indexes finished higher on Friday, setting new records in the process on the back of strong earnings from blue-chip companies as well as robust economic data that signaled a solid recovery from the pandemic was in the works.

In the cash market, the benchmark S&P 500 Index settled at 4185.47, up 15.05 or +0.36%. The blue chip Dow Jones Industrial Average finished at 34200.67, up 164.68 or +0.48% and the technology-based NASDAQ Composite closed at 14052.34, up 13.58 or +0.10%.

The S&P 500 Index scored three closing highs this week, while the Dow surpassed its best finish two days running. The tech-heavy NASDAQ Composite finished less than one percent below its own all-time closing high achieved on February 12.

Investor Sentiment Boosted by Slew of Economic Data

Housing starts surged 19.4% to a seasonally adjusted annual rate of 1.739 million units last month, the highest level since June 2006. Economists polled by Reuters had forecast starts would rise to a rate of 1.613 million units in March.

Permits for future home building rose 2.7% to a rate of 1.766 million units last month, recouping only a fraction of February’s 8.8% plunge. They jumped 30.2% compared to March 2020.

Inflation concerns were on consumers’ minds early this month. A separate report from the University of Michigan on Friday showed its preliminary consumer sentiment index rose to 86.5 from a final reading of 84.9 in March. Economists had forecast the index would rise to 89.6.

Finally, the survey’s one-year inflation expectation jumped to 3.7%, the highest level in nearly a decade, from 3.1% in March. Its five-year inflation outlook was unchanged at 2.7%.

Strong Bank Earnings Reflect Snapback in Economy

The last of the six largest U.S. banks to report – Morgan Stanley – posted stronger-than-expected earnings, bolstered by strong trading and investment results. The bank reported a 150% jump in quarterly profit on Friday, joining the other U.S. banks in posting first-quarter numbers that reinforced hopes of a swift economic recovery. Still, the investment bank’s shares fell 2.8% as it also disclosed an almost $1 billion loss from the collapse of private fund Archegos.

PNC Financial gained more than 2% after the bank beat estimates on the top and bottom lines for its first-quarter report.

Meanwhile, shares of JPMorgan Chase & Co, Goldman Sachs Group, Bank of America Corp and Wells Fargo & Co rose between 0.7% and 3.8%. This helped the S&P Financials Index climb to a second consecutive record finish.

For a look at all of today’s economic events, check out our economic calendar.

E-mini S&P 500 Index (ES) Futures Technical Analysis – New Minor Support Moves Up to 4142.25

June E-mini S&P 500 Index futures closed higher on Friday with the benchmark index breaking another record close. The strength was driven by strong economic data and bank earnings which served as signs of momentum in the U.S. pandemic recovery.

On Friday, June E-mini S&P 500 Index futures settled at 4176.25, up 13.75 or +0.33%.

Nine of the 11 S&P sub-sectors rose on Friday. The energy and information technology indexes were the exceptions. The, dipping 0.9%, was weighed by lower oil prices, while the latter was marginally lower, the day after its highest-ever close.

In other news, Morgan Stanley reported a 150% jump in quarterly profit on Friday, joining other big banks in posting first-quarter numbers reinforcing hopes of a swift economic recovery.

Daily June E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Friday when buyers took out the previous high at 4166.50.

A trade through 3843.25 will change the main trend to down. This is highly unlikely, but since the index is up 15 days from its last main bottom, it closed Friday’s session inside the window of time for a closing price reversal top.

The minor trend is also up. A trade through 4101.5 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is 4101.25 to 4183.50. Its 50% level at 4142.25 is potential support.

The main range is 3843.25 to 4183.50. If the minor trend changes to down then this will open up the possibility of a further decline into its retracement zone at 4013.25 to 3973.25.

Short-Term Outlook

There is no resistance so it’s important to watch for a few patterns that could signal a short-term top.

Taking out Friday’s low at 4154.25 will make 4183.50 a new minor top. This will be a sign that the selling may be greater than the selling at current price levels.

Taking out 4183.50 then closing lower for the session will form a closing price reversal top. If confirmed then this could trigger the start of a 2 to 3 day correction.

It doesn’t make sense to try to pick a top. When you try to short, you’re only feeding the bull.

If this market is going to form a short-term top, it’s not likely to be related to an economic event, but rather surprise news.

For a look at all of today’s economic events, check out our economic calendar.