U.S. Dollar Index (DX) Futures Technical Analysis – Trading on Weak Side of 91.870 – 92.510 Retracement Zone

The U.S. Dollar is inching higher against a basket of major currencies on Thursday as investors square positions ahead of today’s weekly initial claims and monthly retail sales reports at 12:30 GMT. Earlier in the session, the index hit a three-week low as U.S. bond yields retreated from recently reached multi-month highs.

At 11:31 GMT, June U.S. Dollar Index futures are trading 91.700, up 0.026 or +0.03%.

U.S. Treasury yields are trending lower on Thursday morning, ahead of the release of weekly jobless claims and monthly retail sales data.

The initial jobless claims report is expected to show another 710,000 claims were filed for the first time during the week-ended April 10. March retail sales are also set to come out at 12:30 GMT and are expected to have jumped 6.1%, versus a 3% decline in February.

There may not be much of a reaction to the news unless the reports come in weaker than expected because investors seem to be buying into the Federal Reserve’s arguments that interest rates can stay low even if the economy continues to strengthen.

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 a closing price reversal top on March 31. The main trend will change to down on a move through 91.290. A move through 93.470 will signal a resumption of the uptrend.

The minor trend is down. This confirms the shift in momentum. A trade through 92.365 changes the minor trend to up.

The short-term range is 89.655 to 93.470. Its retracement zone at 91.555 to 91.100 is potential support. Inside this zone is the last main bottom at 91.290. Earlier today, buyers came in at 91.495, following a test of this area.

The main range is 94.587 to 89.155. The index is currently trading on the weak side of its retracement zone at 91.870 to 92.510. This zone is potential resistance. It’s also controlling the near-term direction of the index.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index on Thursday is likely to be determined by trader reaction to 91.555.

Bearish Scenario

A sustained move under 91.555 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the main bottom at 91.290, followed by the short-term Fibonacci level at 91.100. This is a potential trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over 91.555 will signal the presence of sellers. The first upside target is the main 50% level at 91.870. This is a potential trigger point for an acceleration to the upside with 92.365 to 92.510 the next two targets.

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

Daily Gold News: Thursday, Apr. 15 – Gold Higher Ahead of Data Releases

The gold futures contract lost 0.65% on Wednesday, as it further extended its short-term consolidation. The market has bounced from the support level marked by March 8 local low of $1,763.30. In early March yellow metal’s price was the lowest since last year’s June. Today gold is trading higher again, as we can see on the daily chart (the chart includes today’s intraday data):

Gold is 0.6% higher this morning, as it is retracing yesterday’s decline. What about the other precious metals? Silver is 0.6% higher, platinum is 1.5% higher and palladium is 1.8% higher today. So precious metals are higher this morning.

The markets will be waiting for the important Retail Sales release at 8:30 a.m. We will also have Philly Fed Manufacturing Index, Unemployment Claims, Industrial Production and

Business Inventories announcements today.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days:

Thursday, April 15

  • 8:30 a.m. U.S. – Retail Sales m/m, Core Retail Sales m/m , Philly Fed Manufacturing Index, Unemployment Claims
  • 9:15 a.m. U.S. – Industrial Production m/m, Capacity Utilization Rate
  • 10:00 a.m. U.S. – Business Inventories m/m, NAHB Housing Market Index
  • 11:30 a.m. U.S. – FOMC Member Bostic Speech
  • 2:00 p.m. U.S. – FOMC Member Daly Speech
  • 10:00 p.m. China – GDP q/y

Friday, April 16

  • 8:30 a.m. U.S. – Building Permits, Housing Starts
  • 10:00 a.m. U.S. – Preliminary UoM Consumer Sentiment, Preliminary UoM Inflation Expectations
  • All Day, Eurozone – ECOFIN Meetings, Eurogroup Meetings

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

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Dell Surges After Agreeing to Cash Dividend for VMware Spinoff

Dell Technologies Inc. (DELL) shares jumped 8.5% in extended-hours trade Wednesday after the PC maker said it plans to proceed with a spinoff of its 81% stake in enterprise software firm VMware.

The deal, which both parties expect to close in the fourth quarter, will see Dell and its shareholders receive a collective one-time cash dividend of $11.5 billion to $12 billion from VMware. Management said it intends to use the proceeds from the transaction to pay down debt and position the company for an investment-grade credit rating.

“After a comprehensive review of potential strategic options, both parties determined that this transaction will simplify capital structures and create additional long-term enterprise value,” Dell said in a statement cited by CNBC.

Through Wednesday’s close, Dell stock has a market capitalization of $70 billion and trades 26.48% higher since the start of the year. Over the past 12 months, the shares have gained around 125%. Valuation wise, the stock trades at 11.39 times projected earnings, slightly above its five-year average multiple of 10.64 times.

Wall Street View

Earlier this month, Morgan Stanley analyst Katy Huberty raised the investment bank’s target on Dell to $107 from $98 while maintaining her ‘Overweight’ rating. As well as being bullish about the VMware spinoff, Huberty believes higher PC demand and exposure to the mid-market supports earnings moving forward.

Broker research elsewhere remains mixed. The stock receives 12 ‘Buy’ ratings and 9 ‘Hold’ ratings. Currently, no analysts recommend selling the shares. Twelve-month price targets range from a Street-high $110 to a low of $79. As of yesterday’s close, the shares trade at a 3% premium to the $90 median target.

Technical Outlook and Trading Tactics

Dell shares have remained in a steady uptrend over the past year, with gains accelerating in recent weeks. This may indicate that investors have baked in most of the positive news surrounding the VMware spinoff. Furthermore, the relative strength index (RSI) has made a shallower high relative to price over the last month, suggesting waning momentum from the bulls.

Active traders should think about taking a short sale if the stock stages an intraday reversal Thursday. In terms of trade management, look to buy back the shares near last month’s swing low at $84.81. This area also finds support from the 50-day simple moving average (SMA). Protect capital with a stop-loss order placed above the high of today’s price bar.

Dell Chart

For a look at today’s earnings schedule, check out our earnings calendar.

NZD/USD Forex Technical Analysis – Sustained Move Over .7145 Targets .7204 – .7266 Retracement Zone

The New Zealand Dollar is trading at its highest level since March 22 on Thursday as the U.S. Dollar continued to weaken in response to the pullback in U.S. bond yields with investors seemingly accepting the Federal Reserve’s arguments that interest rates will remain at historically low levels for a long time.

At 10:26 GMT, the NZD/USD is trading .7165, up 0.0026 or +0.36%.

In other news, the Reserve Bank of New Zealand (RBNZ) on Wednesday reiterated its commitment to being patient on policy and keeping rates at 0.25% for a prolonged period. That left yields on 10-year bonds near their lowest in two weeks at 1.720%, with a hike not priced until late next year.

Daily NZD/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 yesterday’s high. A move through the intraday high at .7180 will indicate the buying is getting stronger. The main trend will change to down on a trade through .6997.

The major support is the retracement zone at .7027 to .6924. This zone stopped the selling at .6945 and .6943. This area is also controlling the near-term direction of the Forex pair.

The short-term range is .7270 to .6943. The NZD/USD is currently trading on the strong side of its retracement zone at .7145 to .7106, making it support.

The main range is .7465 to .6943. Its retracement zone at .7204 to .7266 is the primary upside target. Sellers could come in on the first test of this area.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Thursday is likely to be determined by trader reaction to the short-term Fibonacci level at .7145.

Bullish Scenario

A sustained move over .7145 will indicate the presence of buyers. If this creates enough upside momentum today then look for the buying to possibly extend into the main 50% level at .7204. Look for sellers on the first test.

Overcoming .7204 will indicate the buying is getting stronger. This could trigger a surge into the potential resistance cluster at .7266 to .7270. Watch for sellers again. Taking out .7270 could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under .7145 will signal the presence of sellers. The first downside target is .7106. Since the main trend is up, buyers could come in on the first test of this level. Look for an acceleration to the downside if .7106 fails as support. This could trigger a further break into .7027.

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

USD/JPY Forex Technical Analysis – Downside Momentum Sets Up Move into 108.407, Followed by 108.230

The Dollar/Yen is trading at its lowest level since March 25 on Thursday as U.S. bond yields pulled back from last month’s surge with investors buying the Federal Reserve’s arguments that interest rates can stay low.

At 09:36 GMT, the USD/JPY is trading 108.737, down 0.197 or -0.18%.

U.S. Treasury yields are drifting lower on Thursday morning, ahead of the release of weekly jobless claims and monthly retail sales data, dragging down the U.S. Dollar.

Meanwhile, investors are positioning themselves ahead of the U.S. weekly jobless claims and March retail sales reports that could offer further clarity as to the strength of the U.S. economic recovery.

The initial jobless claims report is expected to show another 710,000 claims were filed for the first time during the week-ended April 10. March retail sales are also set to come out at 12:30 GMT and are expected to have jumped 6.1%, versus a 3% decline in February.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, 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.

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. Its retracement zone at 108.230 to 107.154 is the primary downside target and potential support. This zone is also controlling the near-term direction of the Forex pair.

The short-term range is 108.407 to 110.966. The USD/JPY is trading on the weak side of its retracement zone at 109.385 to 109.687, making it a resistance area.

Daily Swing Chart Technical Forecast

Look for a bearish tone on Thursday as long as the USD/JPY remains under 109.385.

Bearish Scenario

A sustained move under 109.385 will indicate the presence of sellers. The first downside target is the main bottom at 108.407. Taking out this level will change the main trend to down with 108.230 to 107.154 the next likely target zone. Look for buyers on the first test of this area.

Bullish Scenario

If the intraday momentum shifts to the upside then look for a possible rally into 109.385. Sellers are likely to come in on the first test of this level. Overcoming it will likely trigger a move into 109.687.

Side Notes

With today’s reports, it’s important that you trade the reaction in the Treasury yields and not the headline numbers.

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

Gold Price Futures (GC) Technical Analysis – Sustained Move Over $1746.90 Will Target $1759.40 – $1767.60

Gold futures are edging higher on Thursday as U.S. Treasury yields continued to pullback, dragging down the U.S. Dollar. Meanwhile, investors positioned themselves ahead of the U.S. weekly jobless claims and March retail sales reports that could offer further clarity as to the strength of the U.S. economic recovery.

At 08:53 GMT, June Comex gold futures are trading $1747.00, up $10.70 or +0.62%.

U.S. Treasury yields drifted lower on Thursday morning, ahead of the release of weekly jobless claims and monthly retail sales data.

The initial jobless claims report is expected to show another 710,000 claims were filed for the first time during the week-ended April 10. March retail sales are also set to come out at 12:30 GMT and are expected to have jumped 6.1%, versus a 3% decline in February.

Daily June Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1759.40 will signal a resumption of the uptrend. The trend will change to down on a trade through $1723.20.

On the downside, the first support is a minor 50% level at $1718.40. This is followed by a major Fibonacci level at $1711.90.

The market is currently testing a short-term 50% level at $1746.90.

The next two resistance levels are another short-term 50% level at $1767.60, followed by a major 50% level at $1788.50.

Daily Swing Chart Technical Forecast

The direction of the June Comex gold futures contract on Thursday is likely to be determined by trader reaction to $1746.90.

Bullish Scenario

A sustained move over $1746.90 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible surge into $1759.40 then $1767.60. Overcoming the latter could trigger an acceleration into the major 50% level at $1788.50.

Bearish Scenario

A sustained move under $1746.90 will signal the presence of sellers. This could trigger a break into the main bottom at $1723.20, followed by a pair of retracement levels at $1718.40 and $1711.90.

The trigger point for the next acceleration to the downside is the long-term Fibonacci level at $1711.90.

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

Appeal for Gold Bounces Up Amid Weaker Dollar

The bullion asset recorded impressive gains at the fourth trading session of the week with global investors awaiting further signals on the U.S economy as the greenback traded near its three-week lows, further boosted gold bugs in breaking above $1745 an ounce.

Historically the U.S dollar, normally moves inversely to the yellow metal, giving gold bugs enough gas to take hold of the metal’s market momentarily with appetite for the safe-haven currency diminishing day by day.

Consequently, triggering more upsides for gold prices are recent comments coming from Fed Chairman Jerome Powell that major risks include another spike in COVID-19 caseloads and perhaps resistant strains that might prove difficult to cure.

However, U.S economic recovery remains on course thanks to rising consumer optimism, as monetary officials added that the United States is on track for faster growth and better employment readings in the coming months.

Such macros might limit the precious metals, on the bias that investors will shun non-yielding investments thereby putting gold bugs on a herculean mission breaking above $1,800 price level, despite the weakening dollar. partly because investors have pushed in record levels towards the crypto-verse as the flagship crypto and other altcoins stay bullish.

Gold bulls have built a baseline around the $1730 pivot zone, suggesting that the bullion asset might stay within the current range, as the appetite for risk broadens with the greenback’s pullback and plunging Treasury yields.

That being said, the precious metal has lost much of its appeal this year compared to 2020 with price actions deteriorating in favor of gold bears rather than gold bugs, still, deep corrections of gold prices are viewed as buying opportunities.

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

Crude Oil Price Update – Testing Retracement Zone; Strengthens Over $63.47, Weakens Under $62.29

U.S. West Texas Intermediate crude oil futures are edging higher on Thursday after hitting their highest level since March 18. The move represented a limited follow-through following yesterday’s move than 5% surge.

Several catalysts are supporting the market at this time including increased demand forecasts from the International Energy Agency (IEA) and OPEC, a bigger than expected drop in U.S. crude stockpiles and a weaker U.S. Dollar.

At 08:12 GMT, June WTI crude oil futures are trading $62.96, down $0.26 or -0.41%. This is down from a high of $63.55.

The IEA’s monthly report said global oil demand and supply are set to be rebalanced in the second half of the year after the COVID-19 pandemic destroyed demand in 2020. Meanwhile, OPEC expects demand to rise by 70,000 bpd from last month’s forecast and global demand is likely to rise by 5.95 million bpd in 2021.

Daily June WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has shifted to the upside. The main trend will change to up on a trade through $66.15. 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 changes to down on a move through $57.68.

The short-term range is $67.29 to $57.29. The WTI crude oil market is currently testing its retracement zone at $62.29 to $63.47.

On the downside, minor support is a pair of 50% levels at $61.72 and $60.42.

The main range is $51.04 to $67.29. Its retracement zone at $59.17 to $57.25 is 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 Thursday is likely to be determined by trader reaction to the short-term Fibonacci level at $63.47.

Bullish Scenario

A sustained move over $63.47 will indicate the presence of buyers. Taking out the intraday high at $63.55 will indicate the buying is getting stronger. This could trigger the start of an acceleration to the upside. The daily chart indicates there is plenty of room to the upside with potential targets a pair of main tops at $66.15 and $67.29.

Bearish Scenario

A sustained move under $63.47 will signal the presence of sellers. This could trigger a quick break into a pair of 50% levels at $62.29 and $61.72. Taking out the latter could extend the selling into the minor 50% level at $60.42.

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

AUD/USD Daily Forecast – Test Of Resistance At 0.7750

AUD/USD Video 15.04.21.

Australian Dollar Continues To Move Higher Against U.S. Dollar

AUD/USD is currently trying to settle above the resistance at 0.7750 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get to the test of the nearest support level at 91.50. A move below the support at 91.50 will open the way to the test of the next support at 91.30 which will be bullish for AUD/USD.

Today, Australia reported that Unemployment Rate declined from 5.8% in February to 5.6% in March compared to analyst consensus of 5.7%. Employment Change report indicated that employment increased by 70,700 in March compared to analyst consensus which called for growth of 35,000. Stronger-than-expected reports provided additional support to the Australian dollar.

Foreign exchange market traders will soon have a chance to take a look at the latest employment reports from the U.S. Analysts expect that Initial Jobless Claims declined from 744,000 to 700,000 while Continuing Jobless Claims decreased from 3.73 million to 3.7 million.

Traders will also focus on the latest Retail Sales data from the U.S. Retail Sales are projected to grow by 5.9% month-over-month in March due to the positive impact of the new round of economic stimulus.

Technical Analysis

aud usd april 15 2021

AUD/USD managed to settle above the resistance at 0.7720 and is trying to settle above the next resistance level at 0.7750.

In case this attempt is successful, AUD/USD will head towards the resistance at 0.7775. A move above this level will open the way to the test of the resistance at 0.7800. If AUD/USD manages to settle above this level, it will move towards the resistance at 0.7820.

On the support side, the previous resistance at 0.7720 will likely serve as the first support level for AUD/USD. If AUD/USD declines below this level, it will head towards the next support which is located at 0.7700. A move below the support at 0.7700 will open the way to the test of the support at the 50 EMA at 0.7680.

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

GBP/USD Range Reaches Decisive Moment for Bear or Bull Break

The GBP/USD is showing a lengthy bearish reversal since the end of February 2021. More recently, price action has bounced at the previous bottom (blue box) creating a double bottom.

The GBP/USD is now stuck between support and resistance but a breakout could offer the needed clarification. Let’s review.

Price Charts and Technical Analysis

GBP/USD 15.04.2021 4 hour chart

The GBP/USD seems to have completed a bearish 5 wave pattern (purple). This could be part of a larger bearish ABC pattern (red).

  1. Currently price action is probably in a bullish wave C (purple), which could complete the wave B (red) of a larger ABC (red).
  2. The double bottom could have completed the wave c (pink) of wave B (purple).
  3. A bullish breakout (green arrows) above the resistance trend line (orange) and long-term moving averages would confirm this analysis.
  4. The main upside targets are the previous tops (red boxes).
  5. A bearish bounce at the resistance (orange arrows) could end the wave B (red) and start the wave C (red),
  6. A bearish push could retest the support line (green) and bounce (blue arrow).
  7. A bearish breakout below the support (green) could indicate a downtrend (red arrows). In that case, price action could be completing a bearish 123 (black) and the bullish correction is invalidated.

On the 1 hour chart, blue SWAT candles indicate a bullish trend. But a breakout remains key for confirming any upside:

  1. A push above wizz 4 level with strong price action could confirm the breakout (green arrows).
  2. The bullish break could confirm the wave 3 (green) of 3 (grey) within the larger wave C (pink) of the 4 hour chart.
  3. A bearish breakout (red arrow), however, indicates that the upside was not a wave 1-2 but an ABC (orange) pattern.

GBP/USD 15.04.2021 1 hour chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

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

EUR/USD Daily Forecast – Test Of Resistance At 1.1990

EUR/USD Video 15.04.21.

Euro Tries To Gain More Ground Against U.S. Dollar

EUR/USD is trying to settle above the resistance at 1.1990 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index failed to get to the test of the nearest support level at 91.50 but remained close to this level. If the U.S. Dollar Index declines below 91.50, it will head towards the next support at 91.30 which will be bullish for EUR/USD.

Yesterday, EU reported that Euro Area Industrial Production declined by 1% month-over-month in February compared to analyst consensus which called for a decline of 1.1%. On a year-over-year basis, Industrial Production decreased by 1.6%.

Today, foreign exchange market traders will focus on the economic data from the U.S. and developments in U.S. government bond markets. Currently, Treasury yields are moving lower, which is bearish for the U.S. dollar.

It should be noted that the yield of 10-year Treasuries has failed to settle below the important support level at 1.61% but remains close to this level. If the yield of 10-year Treasuries moves below this level, U.S. dollar will find itself under more pressure.

Technical Analysis

eur usd april 15 2021

EUR/USD continues its attempts to settle above the nearest resistance level at 1.1990. This resistance level has been tested during yesterday’s trading session and proved its strength.

In case EUR/USD manages to settle above the resistance at 1.1990, it will head towards the next resistance at 1.2025. A successful test of the resistance at 1.2025 will open the way to the test of the resistance at 1.2040. If EUR/USD gets above this level, it will move towards the next resistance level at 1.2060.

On the support side, the nearest support level for EUR/USD is located at 1.1965. If EUR/USD declines below this level, it will head towards the next support at the 50 EMA at 1.1930.

A move below the 50 EMA will push EUR/USD towards the support at 1.1900. In case EUR/USD settles below this level, it will head towards the support at the 20 EMA at 1.1890.

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

Canadian Dollar Flexes Muscles

The GBPJPY is in a triple top formation and a divergence on MACD and RSI. There’s a very promising short but before that happens sellers need to break the neckline of this pattern.

The AUDCAD broke the neckline of the inverted head and shoulders formation and later tested it as a closest support.

The EURCAD bounced off a crucial horizontal resistance with two shooting stars. That’s usually very pessimistic.

The Canadian Dollar Index is in a false breakout from the head and shoulders formation. That is promising for the CAD.

The USDCAD bounced off long-term down trendlines and broke the lower line of the rectangle.

The USDJPY is possibly in a very dangerous bearish reversal.

The AUDUSD denied the long-term sell signal and is aiming lower.

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

NASDAQ at Highs but Watch for a Retracement

The US100 – NASDAQ has been trading in an upper range indicating a strong uptrend. This is the case partially to Yen getting weaker.

We can spot 2 POC zones. The first zone 13495-13600 is a shallow retracement, usually seen in strong trends. 38.2 Fib is making a confluence with W L4. On the other hand, we can see POC2 at 88.6/M L3 at 12794.Watch for rejections in any of the zones towards 14050 followed by 14109 and 14300. Breakout will happen above 14050. W H5 is 14366 which is the weekly target after a breakout.

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

Cheers and safe trading,

Nenad

 

GBP/USD Daily Forecast – Resistance At 1.3780 Stays Strong

GBP/USD Video 15.04.21.

British Pound Is Mostly Flat Against U.S. Dollar

GBP/USD continues its attempts to settle above the resistance at 1.3780 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index did not manage to get to the test of the support at 91.50 and rebounded closer to the resistance at the 50 EMA at 91.80. In case the U.S. Dollar Index manages to get back above the 50 EMA, it will head towards the resistance at the 92 level which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the economic data from the U.S. Initial Jobless Claims report is expected to indicate that 700,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are projected to decline from 3.73 million to 3.7 million.

Retail Sales report is expected to show that Retail Sales increased by 5.9% month-over-month in March after declining by 3% in February. The report may have a material impact on the dynamics of the U.S. dollar as it will show how U.S. consumers reacted to the new round of economic stimulus. Analysts also expect that Industrial Production increased by 2.8% month-over-month in March while Manufacturing Production grew by 4%.

Technical Analysis

gbp usd april 15 2021

GBP/USD has recently made another attempt to settle above the resistance at 1.3780 but failed to develop sufficient upside momentum and pulled back. The nearest support level for GBP/USD is located at 1.3745.

In case GBP/USD declines below this level, it will move towards the next support at 1.3710. A successful test of the support at 1.3710 will open the way to the test of the support at 1.3665.

On the upside, GBP/USD needs to settle above the resistance at 1.3780 to continue its rebound. If GBP/USD manages to settle above 1.3780, it will head towards the 50 EMA at 1.3800.

A successful test of the 50 EMA level will push GBP/USD towards the resistance at 1.3835. If GBP/USD moves above the 50 EMA, it will head towards the next resistance at 1.3865.

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

AUD/USD Forex Technical Analysis – Strengthens Over .7728, Weakens Under .7690

The Australian Dollar is trading lower Thursday, giving back earlier gains after touching a three-week top as upbeat data suggested the Australian economy had grown strongly last quarter. Prices began to retreat on the notion, however, that a stronger labor market would bring the Reserve Bank (RBA) closer to raising interest rates.

At 05:56 GMT, the AUD/USD is trading .7719, down 0.0004 or -0.05%.

The Aussie received a boost shortly after the release of a quarterly report showing 70,700 jobs were added in March, twice the market forecast, while unemployment dropped to a one-year low at 5.6%.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at .7745 will signal a resumption of the uptrend. The main trend changes to down on a move through .7586.

The main range is .8007 to .7532. Its retracement zone at .7770 to .7826 is the primary upside target. Sellers could come in on the first test of this zone. 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 trading inside its retracement zone at .7690 to .7728.

The minor range is .7532 to .7745. Its 50% level at .7638 is potential support.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Thursday 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. Taking out the intraday high at .7745 should trigger a surge into the main retracement zone at .7770 to .7826. Look for sellers on the first test of this zone. Taking out .7826 could trigger the start of an acceleration to the upside.

Bearish Scenario

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

Taking out .7690 could trigger an acceleration into the minor 50% level at .7638.

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

European Equities: Corporate Earnings and Economic Data from the U.S in Focus

Economic Calendar:

Thursday, 15th April

German CPI (MoM) (Mar) Final

French CPI (MoM) (Mar) Final

French HICP (MoM) (Mar) Final

Italian CPI (MoM) (Mar) Final

Friday, 16th April

Eurozone Core CPI (YoY) (Mar) Final

Eurozone CPI (YoY) (Mar) Final

Eurozone CPI (MoM) (Mar) Final

Eurozone Trade Balance (Feb)

The Majors

It was a mixed day for the European majors on Wednesday.

The DAX30 fell by 0.17%, while the CAC40 and the EuroStoxx600 gained 0.40% and 0.19% respectively.

Corporate earnings results delivered support to the CAC40 and the EuroStoxx600, with LVMH announcing record high sales.

Positive bank earnings results from the U.S also provided support. Results on Wednesday muted the news of the U.S hitting pause on the roll-out of the Johnson & Johnson vaccine over blood clot concerns.

For the DAX, the talk of downward revisions to growth forecasts weighed mid-week, however.

The Stats

It was a busier day on the economic calendar on Wednesday.

Industrial production figures for the Eurozone and finalized inflation figures from Spain were in focus.

In February, industrial production across the Eurozone fell by 1.0%, reversing a 0.8% increase from January. Economists had forecast a 1.1% fall.

According to Eurostat,

  • Production of capital goods fell by 1.9%, energy by 1.2%, durable consumer goods by 1.1%, and intermediate goods by 0.7%.
  • Non-durable consumer goods production fell by a more modest 0.1% in the month.
  • By member state, France (-4.8%), Malta (-3.8%), and Greece (-2.5%) registered the largest monthly declines.
  • Ireland recorded the largest increase, rising by 4.2% in February.

Compared with February 2020, industrial production was down by 1.6%. In January, production had been up by 0.1% year-on-year.

  • The production of non-durable consumer goods slid by 4.3% when compared with February 2020.
  • Capital goods production (-2.2%) and energy production (-1.5%) were also a drag on the headline number, year-on-year.
  • While the production of intermediate goods slipped by 0.1%, the production of durable consumer goods rose by 0.7%.
  • Malta (-10.9%), Estonia (-8.9%), and France (-6.4%) registered the largest decreases when compared with February 2020.
  • By contrast, Ireland (+41.4%) and Lithuania (+9.7%) registered the largest increases year-on-year.

On the inflation front, Spain’s annual rate of inflation accelerated to 1.3% in March, which was in line with prelim figures. In February, inflation had stalled.

The Harmonized Index for Consumer Prices increased by 1.2% in March, which was also in line with prelim figures. In February, the Index had fallen by 0.1%.

From the U.S

It was a relatively quiet day, with economic data limited to import and export price index figures.

The stats had a muted impact on the majors, however.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Wednesday. BMW slid by 1.62%, with Daimler falling by 0.82%. Continental and Volkswagen saw relatively modest losses of 0.44% and 0.30% respectively.

It was a bullish day for the banks, however, with U.S corporate earnings results delivering support. Deutsche Bank rose by 0.72%, with Commerzbank ending the day up by 0.89%.

From the CAC, it was a bullish day for the banks. BNP Paribas and Credit Agricole rose by 0.66% and by 0.64% respectively. Soc Gen led the way, however, gaining 1.09%.

It was a mixed day for the French auto sector. Stellantis NV fell by 0.63%, while Renault rose by 1.25%.

Air France-KLM followed Tuesday’s 5.04% slide with a 2.06% loss, while Airbus SE recovered a 1.50% loss with a 1.85% gain.

On the VIX Index

It was back into the green the VIX on Wednesday, marking a 2nd daily gain in 6-sessions.

Reversing a 1.54% fall from Tuesday, the VIX rose by 2.04% to end the day at 16.99.

The NASDAQ and the S&P500 fell by 0.99% and by 0.41% respectively, while the Dow rose by 0.16%.

VIX 150421 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the European economic calendar. Finalized March inflation figures for France, Germany, and Italy are due out.

Barring a marked upward revision, however, we don’t expect the numbers to provide the majors with direction.

Later in the day, economic data from the U.S will influence, however.

Key stats include the weekly jobless claims, retail sales, and Philly FED Manufacturing PMI numbers.

Other stats due out of the U.S include NY Empire State Manufacturing, business inventory, and industrial production figures. We don’t expect too much influence from these stats, however.

On the day, corporate earnings will also be in focus. Bank of America, BlackRock, Citigroup, and PepsiCo are amongst the big names announcing results later in the day.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 63 points, while the DAX was down by 15 points.

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

EOS, Stellar’s Lumen, and Tron’s TRX – Daily Analysis – April 15th, 2021

EOS

EOS rose by 3.89% on Wednesday. Following on from a 14.26% rally on Tuesday, EOS ended the day at $7.6717.

A bullish start to the day saw EOS rise to an early morning intraday high $8.1288 before hitting reverse.

EOS broke through the first major resistance level at $7.8193 before sliding to an early afternoon intraday low $7.0261.

Steering clear of the first major support level at $6.7223, EOS moved back through to $7.78 levels to deliver the upside on the day.

At the time of writing, EOS was down by 3.03% to $7.4395. A mixed start to the day saw EOS rise to an early morning high $7.9858 before falling to a low $7.4286.

EOS left the major support and resistance levels untested early on.

EOSUSD 150421 Hourly Chart

For the day ahead

EOS would need to move back through the $7.6089 pivot level to support another run at the first major resistance level at $8.1916.

Support from the broader market would be needed, however, for EOS to break out from Wednesday’s high $8.1288.

Barring an extended crypto rally, the first major resistance level and resistance at $8.20 would likely cap any upside.

In the event of an extended rally, EOS could test resistance at $9.00 before any pullback. The second major resistance level sits at $8.7116.

Failure to move back through the $7.6089 pivot would bring the first major support level at $7.0889 into play.

Barring another extended sell-off, however, EOS should steer clear of the 23.6% FIB of $6.5200. The second major support level sits at $6.5062.

Looking at the Technical Indicators

First Major Support Level: $7.0889

First Major resistance Level: $8.1916

23.6% FIB Retracement Level: $6.52

38% FIB Retracement Level: $9.68

62% FIB Retracement Level: $14.77

Stellar’s Lumen

Stellar’s Lumen fell by 3.35% on Wednesday. Partially reversing an 11.35% rally from Tuesday, Stellar’s Lumen ended the day at $0.6354.

A bullish start to the day saw Stellar’s Lumen rally to an early morning intraday high and a new swing hi $0.6908 before hitting reverse.

Falling short of the first major resistance level at $0.7020, Stellar’s Lumen slid to an early afternoon intraday low $0.5921.

Stellar’s Lumen fell through the first major support level at $0.5947 before a partial recovery to $0.63 levels.

At the time of writing, Stellar’s Lumen was down by 3.30% to $0.6144. A mixed start to the day saw Stellar’s Lumen rise to an early morning high $0.6366 before falling to a low $0.6142.

Stellar’s Lumen left the major support and resistance levels untested early on.

XLMUSD 150421 Hourly Chart

For the day ahead

Stellar’s Lumen would need to move back through the pivot level at $0.6394 to bring the first major resistance level at $0.6868 into play.

Support from the broader market would be needed, however, for Stellar’s Lumen break out from $0.65 levels.

Barring an extended crypto rally, the first major resistance level and Wednesday’s swing hi $0.6908 would likely cap any upside.

In the event of an extended rally, Stellar’s Lumen could test resistance at $0.70. The second major resistance level sits at $0.7381.

Failure to move back through the $0.6394 pivot would bring the first major support level at $0.5881 into play.

Barring an extended sell-off on the day, Stellar’s Lumen should steer clear of the second major support level at $0.5407.

Looking at the Technical Indicators

First Major Support Level: $0.5881

First Major Resistance Level: $0.6868

23.6% FIB Retracement Level: $0.5342

38% FIB Retracement Level: $0.4373

62% FIB Retracement Level: $0.2808

Tron’s TRX

Tron’s TRX fell by 3.96% on Wednesday. Partially reversing a 13.16% rally from Tuesday, Tron’s TRX ended the day at $0.1405.

A bullish start to the day saw Tron’s TRX rise to an early morning intraday high and a new swing hi $0.1570 before hitting reverse.

Falling short of the first major resistance level at $0.1594, Tron’s TRX slid to an early afternoon intraday low $0.1313.

Steering clear of the first major support level at $0.1299, Tron’s TRX revisited $0.1425 levels before easing back.

At the time of writing, Tron’s TRX was down by 2.67% to $0.1367. A mixed start to the day saw Tron’s TRX rise to an early morning high $0.1421 before falling to a low $0.1360.

Tron’s TRX left the major support and resistance levels untested early on.

TRXUSD 150421 Hourly Chart

For the Day Ahead

Tron’s TRX would need to move back through the $0.1429 pivot to bring the first major resistance level at $0.1546 into play.

Support from the broader market would be needed, however, for Tron’s TRX to break back through to $0.15 levels.

Barring an extended crypto rally, the first major resistance level and Wednesday’s new swing hi $0.1570 would likely cap any upside.

In the event of an extended rally Tron’s TRX could test resistance at $0.165 before any pullback. The second major resistance level sits at $0.1686.

Failure to move back through the $0.1429 pivot would bring the first major support level at $0.1289 into play.

Barring an extended sell-off, Tron’s TRX should steer clear of the second major support level at $0.1172. The 23.6% FIB of $0.1216 should limit the downside.

Looking at the Technical Indicators

First Major Support Level: $0.1289

First Major Resistance Level: $0.1546

23.6% FIB Retracement Level: $0.1216

38.2% FIB Retracement Level: $0.0997

62% FIB Retracement Level: $0.0644

Please let us know what you think in the comments below

Thanks, Bob

Ethereum, Litecoin, and Ripple’s XRP – Daily Tech Analysis – April 15th, 2021

Ethereum

Ethereum rose by 5.76% on Wednesday. Following on from a 7.57% rally on Tuesday, Ethereum ended the day at $2,432.54.

A mixed start to the day saw Ethereum fall to an early morning intraday low $2,283.26 before making a move.

Steering clear of the first major support level at $2,185, Ethereum surged to a final hour intraday high and a new swing hi $2,446.91.

Ethereum broke through the first major resistance level at $2,366 and the second major resistance level at $2,432 before easing back.

While easing back, Ethereum managed to find support at the second major resistance level at $2,432.

At the time of writing, Ethereum was up by 0.35% to $2,440.98. A bullish start to the day saw Ethereum rise from an early morning low $2,432.12 to a new swing hi $2,449.99.

Ethereum left the major support and resistance levels untested early on.

ETHUSD 150421 Hourly Chart

For the day ahead

Ethereum would need to avoid a fall through the pivot level at $2,388 to support a run at the first major resistance level at $2,492.

Support from the broader market would be needed, however, for Ethereum to break out from this morning’s new swing hi $2,449.99.

Barring an extended crypto rally, the first major resistance level and resistance at $2,500 would likely cap any upside.

In the event of a breakout, Ethereum could test resistance at $2,600 before any pullback. The second major resistance level sits at $2,551.

Failure to avoid a fall through the $2,388 pivot would bring the first major support level at $2,328 into play.

Barring an extended sell-off, however, Ethereum should steer clear of sub-$2,200 levels. The second major support level at $2,224 should limit the downside.

Looking at the Technical Indicators

First Major Support Level: $2,328

Pivot Level: $2,388

First Major Resistance Level: $2,492

23.6% FIB Retracement Level: $1,889

38.2% FIB Retracement Level: $1,543

62% FIB Retracement Level: $985

Litecoin

Litecoin rose by 4.14% on Wednesday. Following on from a 9.56% rally on Tuesday, Litecoin ended the day at $278.85.

A bullish start to the day saw Litecoin rise to an early morning intraday high and a new swing hi $283.2 before hitting reverse.

Litecoin broke through the first major resistance level at $279 before falling to an early afternoon intraday low $255.0.

Steering clear of the first major support level at $250, Litecoin briefly broke back through the first major resistance level before falling back to sub-$279 levels.

At the time of writing, Litecoin was up by 0.25% to $279.54. A bullish start to the day saw Litecoin rise from an early morning low $278.75 to a high $282.80.

Litecoin left the major support and resistance levels untested early on.

LTCUSD 150421 Hourly Chart

For the day ahead

Litecoin would need to avoid a fall through the $273 pivot level to support a run at the first major resistance level at $289.

Support from the broader market would be needed, however, for Litecoin to break out from Wednesday’s swing hi $283.20.

Barring an extended crypto rally, the first major resistance level and resistance at $290 would likely cap any upside.

In the event of an extended rally, Litecoin could test the second major resistance level at $300.

Failure to avoid a fall through the $273 pivot level would bring the first major support level at $262 into play.

Barring an extended sell-off, Litecoin should steer well clear of the second major support level at $245.

Looking at the Technical Indicators

First Major Support Level: $262

Pivot Level: $273

First Major Resistance Level: $289

23.6% FIB Retracement Level: $222

38.2% FIB Retracement Level: $185

62% FIB Retracement Level: $124

Ripple’s XRP

Ripple’s XRP rose by 2.30% on Wednesday. Following on from a 22.24% jump on Tuesday, Ripple’s XRP ended the day at $1.83817.

A mixed start to the day saw Ripple’s XRP rise to an early morning intraday high and a new swing hi $1.96598 before hitting reverse.

Falling short of the first major resistance level at $1.9839, Ripple’s XRP slid to an early afternoon intraday low $1.5454.

Steering clear of the first major support level at $1.5132, Ripple’s XRP recovered to end the day at $1.83 levels.

At the time of writing, Ripple’s XRP was down by 0.84% to $1.82281. A mixed start to the day saw Ripple’s XRP rise to an early morning high $1.88353 before falling to a low $1.82230.

Ripple’s XRP left the major support and resistance levels untested early on.

XRPUSD 150421 Hourly Chart

For the day ahead

Ripple’s XRP will need to avoid a fall through the $1.7832 pivot level to bring the first major resistance level at $2.0210 into play.

Support from the broader market would be needed, however, for Ripple’s XRP to break out from Wednesday’s new swing hi $1.96598.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

In the event of an extended rally, Ripple’s XRP could test resistance at $2.20 levels before any pullback. The second major resistance level sits at $2.2038.

Failure to avoid a fall through the $1.7832 pivot would bring the first major support level at $1.6004 into play.

Barring another extended sell-off, however, Ripple’s XRP should steer clear the second major support level at $1.3626. The 23.6% FIB of $1.5426 should limit any downside.

Looking at the Technical Indicators

First Major Support Level: $1.6004

Pivot Level: $1.7832

First Major resistance Level: $2.0210

23.6% FIB Retracement Level: $1.5426

38.2% FIB Retracement Level: $1.2807

62% FIB Retracement Level: $0.8573

Please let us know what you think in the comments below.

Thanks, Bob

April 15th 2021: 91.60 Daily Support Makes an Entrance on the US Dollar Index

Charts provided by Trading View

EUR/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

March carved out a third consecutive loss, extending the 2021 retracement slide by 2.8 percent. Recent underperformance, as you can see, pulled EUR/USD into the upper range of demand at 1.1857-1.1352.

April’s 2.8 percent rebound from the aforesaid demand thus far shifts attention to the possibility of fresh 2021 peaks and a test of ascending resistance (prior support – 1.1641). Extending lower, on the other hand, shines the technical spotlight on trendline resistance-turned support, taken from the high 1.6038.

Based on trend studies, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

Dollar action navigated to three-week troughs on Wednesday. Interestingly, though, the US dollar index (ticker: DXY) shook hands with 91.60 support.

EUR/USD, following Tuesday’s one-sided advance north of the 200-day simple moving average (currently circling 1.1896), crossed swords with resistance at 1.1966 Wednesday. Follow-through upside here shines the technical spotlight on resistance at 1.2058.

Despite the 2021 retracement slide, trend studies reveal the pair has been higher since early 2020.

RSI analysis has the value hovering within striking distance of resistance at 60.30. This follows a trendline resistance breach last week (taken from the peak 75.97) as well as a bullish failure swing.

H4 timeframe:

Quasimodo resistance at 1.1937 stepped aside in recent trading (now potential support) and unlocked upside towards resistance at 1.1990. Upstream, interesting supply resides at 1.2101-1.2059 (sits on top of daily resistance at 1.2058).

H1 timeframe:

Supply from 1.1956-1.1935 had its upper side penetrated on Wednesday, with subsequent movement retesting the zone as demand and holding. 1.20 is seen as potential resistance on the H1 chart, with additional bullish flow targeting resistance at 1.2026 (previous Quasimodo support).

Modest RSI bearish divergence materialised around overbought space. The value currently circles the 60.00 region.

Observed levels:

The 1.20 figure based on the H1 and H4 resistance from 1.1990 forms potential confluence to be mindful of.

A H1 close north of 1.20, however, unbolts a possible bullish scenario, targeting H1 resistance at 1.2026, followed by H4 supply at 1.2101-1.2059 and daily resistance at 1.2058.

AUD/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

February finished considerably off best levels, establishing what many candlestick fans call a shooting star pattern—a bearish signal found at peaks. What’s interesting was February also came within striking distance of trendline resistance (prior support – 0.4776 high), sheltered under supply from 0.8303-0.8082.

March subsequently erased 1.5% over the Month and probed February’s lows. Follow-through selling shines light on demand at 0.7029-0.6664 (prior supply).

With respect to trend (despite the trendline resistance [1.0582] breach in July 2020), the primary downtrend (since mid-2011) remains in play until breaking 0.8135 (January high [2018]).

Daily timeframe:

The Australian dollar outperformed against a broadly softer US dollar on Wednesday, adding more than 1 percent on the session and concluding at tops. Following a period of indecision around the 0.7563 February low, aided by a 1.272% Fib extension at 0.7545, recent enthusiasm elbowed resistance into the spotlight at 0.7817.

Trend studies reveal the unit has been higher since early 2020.

Momentum, as measured by the RSI oscillator, climbed the 50.00 centreline after discovering a floor off channel support, taken from the low 43.70.

H4 timeframe:

Trendline resistance, extended from the high 0.8007, as well as supply at 0.7696-0.7715, came under fire yesterday. Quasimodo resistance at 0.7800, therefore, deserves notice as the next potential ceiling, closely stationed by demand-turned supply from 0.7848-0.7867.

H1 timeframe:

Supply at 0.7747-0.7734 made an entrance amid US hours on Wednesday, following a decisive advance through 0.77 offers. Price action traders will note this movement established a demand area at 0.7679-0.7695

North of 0.7747-0.7734, the path appears relatively clear to 0.78.

Resistance at 80.85, plotted within overbought space on the RSI oscillator, welcomed the value as price tested supply. As you can see, noted resistance has so far held form, with the value on course to potentially exit overbought territory (considered a bearish signal).

Observed levels:

Scope to advance on the daily timeframe until resistance at 0.7817 places a question mark on H1 supply at 0.7747-0.7734. This, coupled with H4 action overthrowing supply at 0.7696-0.7715, highlights a bullish market for the time being.

A retest of the H4 supply-turned demand at 0.7696-0.7715 may entice dip-buyers, particularly if H1 greets 0.77.

USD/JPY:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

Following January’s bullish engulfing candle and February’s outperformance, March concluded up by 3.9 percent and marginally cut through descending resistance, etched from the high 118.66.

April, currently down 1.6 percent, is seen retesting the breached descending resistance, movement that may eventually entice bullish flow. With respect to long-term upside targets, supply at 126.10-122.66 calls for attention.

Daily timeframe:

Partly modified from previous analysis.

The greenback eked out modest losses against the Japanese yen Wednesday, consequently extending downside for a third consecutive session.

Despite supply at 110.94-110.29 limiting upside since the beginning of April, the monthly timeframe testing descending resistance-turned support questions further selling. Consequently, the collection of lows around 108.36ish (green oval) could limit downside moves.

Structure beyond said lows, however, shows demand coming in at 107.58-106.85 alongside trendline support, etched from the low 102.59.

In terms of trend on the daily scale, we have been decisively higher since early 2021.

RSI action journeyed beneath support at 57.00, and recently dipped a toe under the 50.00 centreline. This implies momentum remains to the downside for the time being.

H4 timeframe:

As noted in previous writing, supply at 109.97-109.72 stood firm in early trade this week. Thanks to continued weakness, this brings light to a Fib cluster between 108.44 and 108.66 (blue), glued to the upper side of demand at 108.31-108.50 (note the area also holds lows highlighted on the daily scale around 108.36).

H1 timeframe:

Early hours on Wednesday dropped through 109 support and pencilled in lows a few pips ahead of demand at 108.60-108.71 (shares a connection with the H4 Fib cluster at 108.44-108.66). Subsequent action observed a 109 retest, which held as resistance.

RSI movement rebounded from oversold space, following the formation of an AB=CD pattern (black arrows). This led the value back to the 50.00 centreline, which formed resistance and informed traders that momentum faces southbound.

Observed levels:

Partly modified from previous analysis.

Having noted the monthly timeframe testing descending resistance-turned possible support, any selling may be short-lived. As such, overtaking lows around 108.36 on the daily scale, according to chart studies, is unlikely.

In light of where we’re coming from on the monthly timeframe, H1 demand at 108.60-108.71 is likely on the radar for traders, an area plotted just north of H4 demand at 108.31-108.50 (and shares space with the H4 Fib cluster at 108.44-108.66).

GBP/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

The pendulum swung in favour of buyers following December’s 2.5 percent advance, stirring major trendline resistance (2.1161).

February followed through to the upside (1.7 percent) and refreshed 2021 highs at 1.4241, levels not seen since 2018. Contained within February’s range, however, March snapped a five-month winning streak and formed what candlestick enthusiasts call an inside candle pattern (represents a short-term consolidation with low volatility). A breakout lower in subsequent months would generally be viewed as a bearish signal.

Despite the trendline breach, primary trend structure has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way (April high 2018).

Daily timeframe:

Largely unchanged from previous analysis.

Sterling against the US dollar gathered traction Wednesday, though ended the session considerably off session peaks.

The technical arrangement present on the daily chart remains unchanged. Quasimodo support at 1.3609 is seen, a level connected with a 1.272% Fib expansion at 1.3617, as well as 1.618% and 1.272% Fib extension levels at 1.3614 and 1.3607, respectively.

With reference to trend, GBP/USD has been trending higher since early 2020.

The RSI failed to find grip north of the 50.00 centreline last week, though at the same time is reluctant to explore levels south of 40.00.

H4 timeframe:

Largely unchanged from previous analysis.

Action out of the H4 chart remains focussed on support at 1.3680, as well as trendline support-turned resistance, taken from the low 1.3670.

Additional areas to be cognisant of are 1.3852 resistance and Quasimodo support mentioned above on the daily timeframe at 1.3609.

H1 timeframe:

The 1.38 figure, surrounded by a 1.272% Fib expansion at 1.3809 and a 50.0% retracement level at 1.3793, delivered resistance on Wednesday and guided the currency pair back to 1.3750 support.

External levels to be aware of on the H1 scale are the 100-period simple moving average at 1.3740, and a demand-turned supply base residing at 1.3853-1.3869, sharing chart space with a number of Fib studies between 1.3870 and 1.3847.

Interestingly, RSI flow greeted trendline support, taken from the low 27.58, following an earlier rejection from overbought terrain.

Observed levels:

With higher timeframe levels showing limited support and resistance nearby, GBP/USD traders are likely monitoring 1.3750 support on the H1, along with 1.3809-1.3793 resistance.

Another area likely on the technical radar is H1 supply at 1.3853-1.3869. Not only does this base align with numerous Fib levels, the area also joins H4 resistance at 1.3852.

DISCLAIMER:

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Gold Trades Lower Within A Narrow Trading Range

This high was hit after gold traded to a second low, or double bottom on the 30th and 31st of March. This follows the first low of the double bottom which occurred on March 8 when gold was traded to a low of $1673. The second low in the double bottom came in slightly above the former low at $1676.

Simply put, this shows that gold is still dominated by the bearish faction, with the bullish faction attempting to regain control now that we have had a higher low and a higher high than previous.

Today, gold futures basis the most active June contract gave up much of yesterday’s gains. Currently, June gold is fixed at $1736.50, a net decline of $11.10. Today’s close occurred just above the 21-day exponential moving average which is currently fixed at $1736 per ounce. Although gold has been trading sideways over the last eight trading days it is currently above the series of tops that occurred in mid-March. Our technical studies indicate that the selloff in gold which began at the beginning of January when gold was trading above $1940 concluded at the beginning of March. When the first lows of the double bottom occurred, that being said, momentum to the upside has been slow and tenuous at best but has the real potential to continue higher.

gold April 14

Resistance begins at gold’s 50-day moving average which is currently fixed at $1753.90, with the next level of resistance occurring at which is the 78% Fibonacci retracement. The data set used for this retracement begins at the new record high at $2088 and concludes at $1673, the first low of the double bottom we spoke about above.

Chairman Jerome Powell spoke virtually today at the economic club of Washington DC. He addressed the concern that many economists have about the ever-growing national debt that has been created from fiscal stimulus as well as the monetary policy of the Federal Reserve. In response to these concerns Chairman Powell said that “The U.S. federal budget is on an unsustainable path, meaning simply that the debt is growing meaningfully faster than the economy. The current level of debt is very sustainable. And there’s no question of our ability to service and issue that debt for the foreseeable future.”

Although he said that there is no question that the Federal Reserve and U.S. government could service and issue that debt for the foreseeable future the fact of the matter is that current estimates put our expenditures in 2021 at 1.25% of GDP. That being said, it will be hard to fathom exactly what steps will be necessary to service the current level of debt. Also, any major change in interest rates would make that debt even more difficult to service. Many such analysts, including myself, continue to believe that we have not even begun to deal with the economic fallout that will follow our mounting debt. While all are in agreement that the current U.S. budget is on an unsustainable path, real solutions are needed, and no viable solutions have been presented.

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Wishing you, as always, good trading and good health,

Gary Wagner