EUR/USD, GBP/USD Analysis & Setups 19 – 20 Apr 2021

The EUR/USD made a wave 4 pullback and price action is now testing the 50% Fibonacci level and target zone at 1.2025. The GBP/USD bullish bounce at the channel bottom is looking very impulsive as well.

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EUR/USD & GBP/USD Overview

The EUR/USD could move up once more, despite the resistance zone. The bullish momentum is looking strong and a mild pullback to the shallow Fibs at 1.20 could confirm a bounce up towards the next target zone at 1.21.

The GBP/USD bullish momentum needs a 1 hour bull flag pattern followed by a breakout for more upside towards 1.3950 and 1.40.

Check out the video below for the full analysis and trade plans on 19 – 20 April 2021:

EUR/USD, GBP/USD technical analysis: patterns, trends, key S&R levels

  • Explanation of potential trade ideas both up and down
  • Beginner friendly, explaining concepts in more detail

EUR/USD & GBP/USD Video

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

Good trading,

Chris Svorcik
CTA

 

Dollar Pinned Near One-Month Low, Bitcoin Steadies Near $57k After Weekend Drop

By Ritvik Carvalho

The dollar was also held down by improved risk sentiment amid a rally in global stocks to record highs.

Bitcoin stabilized after losses from Sunday, when it plunged as much as 14% to $51,541, which a report attributed to news of a power outage in China.

The dollar index, which tracks it against six other currencies, was at 91.552, not far from last week’s low of 91.484, a level not seen since March 18.

The dollar bought 108.40 yen, its lowest against the Japanese currency since March 24.

“Following the decline since end-March, the dollar index has stabilized since mid-last week,” said Jussi Hiljanen, chief strategist, USD and EUR rates at SEB.

“The dollar is likely to remain counter cyclical until the dollar rates in the 2-5y sector take another leg higher. As we expect the dollar rates to move more or less sideways during Q2, EUR/USD has room to gain in the coming months, especially if vaccination speeds up in the euro area and the earnings season pushes the stock market even higher.”

The euro changed hands at $1.1985, flat on the day and near its highest against the dollar since March 4. The European Central Bank meets on Thursday with internal divisions over the pace of bond buying, extended COVID-19 lockdowns and potential delays to the EU recovery fund form the backdrop.

The 10-year Treasury yield sank as low as 1.5280% last week from 1.7760% at the end of last month, its highest in more than a year.

The S&P 500 closed at a record high on Friday, extending a rally in global stocks.

Fed Governor Christopher Waller said on CNBC on Friday that the U.S. economy “is ready to rip” as vaccinations continue and activity picks up, but a rise in inflation is likely to be transitory, echoing comments from other Fed officials, including Chair Jerome Powell, over the past week.

“With liquidity still abundant, we are going to hear more about the FX carry trade – which thrives in a low volatility environment,” said Chris Turner, global head of markets and regional head of research for UK and CEE at ING.

“This especially being the case if the Fed manages to make the April 28th meeting a non-event. With the SOFR overnight USD interest rate now at 0.01%, the dollar clearly doesn’t score highly on the carry front. And indeed a little more confidence in the European and global recovery stories may well see flows start to resume to EM – having been derailed by the Treasury sell-off in February and March.”

MSCI’s emerging market currency index traded 0.1% higher on the day, and is up 0.8% from the start of last week.

Bitcoin stabilized around $57,471 after a weekend plunge.

Data website CoinMarketCap cited a blackout in China’s Xinjiang region, which reportedly powers a lot of bitcoin mining, for the selloff.

Analysts at National Australia Bank cited “speculation in several online reports” that the U.S. Treasury may crack down on money laundering within digital currencies for the sharp move lower.

The bitcoin rout also followed a decision on Friday by Turkey’s central bank to ban the use of cryptocurrencies for purchases.

Despite recent weakness, the world’s most popular cryptocurrency remains up 97% in 2021, after more than quadrupling last year.

“We suspect the 15% weekend correction in Bitcoin will not have broader market ramifications,” ING’s Turner said.

(Reporting by Ritvik Carvalho; additional reporting by Kevin Buckland in Tokyo; editing by Larry King)

EUR/USD Daily Forecast – Support At 1.1965 Stays Strong

EUR/USD Video 19.04.21.

Euro Is Mostly Flat Against U.S. Dollar At The Beginning Of The Week

EUR/USD has recently made an attempt to settle below the support at 1.1965 but failed to develop sufficient downside momentum while the U.S. dollar remained under pressure against a broad basket of currencies.

The U.S. Dollar Index is currently testing the nearest support level which is located at 91.50. In case the U.S. Dollar Index settles below this level, it will move towards the next support at 91.30 which will be bullish for EUR/USD.

On Friday, EU reported that Euro Area Inflation Rate increased by 1.3% year-over-year while Euro Area Core Inflation Rate grew by 0.9%. Both reports were in line with the analyst consensus. There are no signs of pricing pressure in the Euro Area as the European economy remains under pressure from the third wave of the virus.

Today, foreign exchange market traders will have a chance to take a look at Euro Area Construction Output report for February. Analysts forecast that  Construction Output declined by 3.6% year-over-year.

Technical Analysis

eur usd april 19 2021

EUR/USD failed to settle below the nearest support level at 1.1965 and is moving towards the resistance at 1.1990. This resistance level has already been tested several times in recent trading sessions and proved its strength.

In case EUR/USD manages to get above the resistance at 1.1990, it will gain additional upside momentum and head towards the resistance at 1.2025. A succcessful test of the resistance at 1.2025 will open the way to the test of the next resistance level at 1.2040. If EUR/USD settles above this level, it will head towards the resistance at 1.2060.

On the support side, a move below the support at 1.1965 will push EUR/USD towards the support at the 50 EMA at 1.1935. In case EUR/USD declines below the support at the 50 EMA, it will move towards the 20 EMA which is located at 1.1915. A successful test of the support at the 20 EMA will push EUR/USD towards the next support at 1.1900.

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

Take Five: ECB, Earnings and Geopolitical Escalations

1/ ECB DAY

Dutch central bank head Klaas Knot believes the acceleration is temporary, while ECB chief Christine Lagarde says the economy is still standing on “crutches” and stimulus cannot be withdrawn.

The euro area is still grappling with lockdowns and a third wave of COVID-19 but business activity appears to be holding up. The April flash purchasing managers index on Friday should provide fresh clues on the outlook. Signs of a swift recovery could raise questions over when the ECB will slow its bond buying, putting recent bond market calm to the test.

– ECB’s Lagarde says euro zone economy still on crutches

2/ GEOPOLITICS GALORE

U.S. President Joe Biden’s administration slapping sanctions on Russia – and leaving the door open for more to come – has served as a potent reminder that geopolitical tensions are very much alive.

The immediate market impact seems to have been somewhat muted, but few doubt the curbs – including restrictions on Russia’s sovereign debt – mark a turning point and will have long-term effects.

Elsewhere, greater China markets are keeping a close eye on relations between Biden and Japan’s Prime Minister Yoshihide Suga, who thought to present a united front to counter an increasingly assertive China in the U.S. leader’s first face-to-face White House summit since taking office.

The joint leaders’ statement included the first reference to Taiwan since 1969, before Tokyo normalized ties with Beijing. Investors have so far not priced much risk from the sudden increase in China’s maritime activities near Taiwan, but the prospect of an embittered China is giving Japanese stocks some pause.

-UPDATE 12-Biden and Japan’s Suga project unity against China’s assertiveness

3/ FIRST FAANG

Netflix reports first-quarter results on Tuesday. It’s the first of the FAANG stocks – Facebook, Amazon, AAPL Netflix and Google-parent Alphabet – with others following suit in the coming weeks.

Netflix, the darling of the stay-at-home stocks, shone during the pandemic. But with vaccinations in full swing and consumers itching to get back out, darker days may lie ahead for the streaming giant. Still, recent efforts to crack down on password sharing could boost subscriber growth.

The stock hit a record high on Jan. 20, right after fourth-quarter results, but has slipped back since. Options markets are pricing a 7% post-earnings move in Netflix shares. That would boost Netflix close to January’s $593.29 record high, and may well help growth stocks get their mojo back.

– Investors keep faith in U.S. value stocks as tech roars back

4/ GO EUROPE INC

The likes of Nestle, ASML and Renault are kicking off Europe’s earnings season.

An overall earnings jump of 56% is anticipated, which would mark Europe’s best quarter in recent history and drive it out of a COVID-19-induced recession with a rare outperformance against corporate America. S&P 500 earnings are seen up 25%.

The bar is high and with the STOXX 600 index running at record peaks, disappointment may be hard to avoid. Yet investors are confident Europe Inc will make it as hefty stimulus boosts the global economy, outweighing setbacks in vaccine rollouts.

Reflecting that perhaps, is the 6-month streak of earnings upgrades, with shares in luxury giant LVMH scaling all-time highs on Wednesday after blow-out numbers.

– LVMH shares hit record high after strong sales figures

5/ UK POST-LOCKDOWN

The coming days offer up the first real sense of how the UK economy has fared since it began emerging from lockdown.

A rapid vaccination rollout, which has eclipsed most major rivals, and tumbling COVID-19 infection rates makes Britain a litmus test for how confidently businesses and consumers stocked up on savings will respond to a reopening of the economy.

So, a clutch of data including March retail sales, inflation, employment numbers, and flash purchasing managers index surveys for April released from Tuesday onwards should shed light on how ready consumers and companies are to start spending again.

Inflation numbers will also be of interest after the Bank of England’s chief economist, a policy hawk who has sounded the alarm about inflation and has remained upbeat about a post-COVID-19 recovery, announced he would quit in June.

– Bank of England’s outspoken, inflation-wary chief economist to quit

(Reporting by Saqib Iqbal Ahmed in New York; Danilo Masoni in Milan, Tommy Wilkes, Karin Strohecker and Dhara Ranasinghe in London; Vidya Ranganathan in Singapore; Compiled by Dhara Ranasinghe; Editing by Hugh Lawson and Rashmi Aich)

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.

A Light Economic Calendar Leaves COVID-19 and Geopolitics in Focus

Earlier in the Day:

It was a relatively busy start to the day on the economic calendar this morning. The Japanese Yen was in action this morning. Later this morning, finalized industrial production figures from Japan are also due out. Barring a marked revision from prelim figures, however, the numbers should have a muted impact on the Yen and the broader market.

For the Japanese Yen

Trade data was in focus this morning.

In March, the trade surplus widened from ¥215.9bn to ¥663.7bn. Economists had forecast a widening to ¥490.0bn.

According to figures released by the Ministry of Finance,

  • Exports surged by 16.1% to reverse a 4.5% decline from February. Economists had forecast an 11.6% increase.
    • Exports to China jumped by 37.2%, with exports to Western Europe rising by 8.5%.
    • To the U.S, exports rose by a more modest 4.9%.
  • Imports rose by 5.7%, year-on-year, following an 11.8% jump in February. Economists had forecast a 4.7% increase.
    • Imports from China rose by 10.0%, with imports from Western Europe rising by 19.4%.
    • From the U.S, imports rose by 6.5%.

The Japanese Yen moved from ¥108.702 to ¥108.690 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.14% to ¥108.65 against the U.S Dollar.

Elsewhere

At the time of writing, the Aussie Dollar was down by 0.18% to $0.7720, with the Kiwi Dollar down by 0.11% to $0.7134.

The Day Ahead:

For the EUR

It’s a particularly quiet day ahead on the economic calendar. There are no major stats from the Eurozone to provide the EUR with direction.

The lack of stats will leave the EUR in the hands of COVID-19, vaccination rates, and any plans to ease containment measures.

At the time of writing, the EUR was down by 0.32% to $1.1945.

For the Pound

It’s also a particularly quiet day ahead on the economic calendar.

There are no material stats due out of the UK to provide the Pound with direction.

A lack of stats would leave the Pound in the hands of market risk sentiment on the day.

At the time of writing, the Pound was down by 0.11% to $1.3817.

Across the Pond

It’s a quiet day ahead on the economic calendar. There are no material stats to provide the Greenback and the broader markets with direction.

The lack of stats will leave chatter from Capitol Hill and U.S foreign policy in focus. A rise in geopolitical tension between the U.S and China and the U.S and Russia needs monitoring.

From the weekend, news of new COVID-19 cases rising by a record number last week delivered Dollar support early on. The latest surge in new COVID-19 cases comes amidst the ongoing vaccination programs that had delivered market optimism in recent weeks.

At the time of writing, the Dollar Spot Index was up by 0.20% to 91.735.

For the Loonie

It’s another quiet day ahead on the economic calendar. Housing start figures are due out later today.

Barring particularly dire numbers, however, we don’t expect too much influence from the stats.

Expect market risk sentiment and COVID-19 vaccine news to remain the key areas of focus.

At the time of writing, the Loonie was down by 0.10% to C$1.2521 against the U.S Dollar.

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

The Week Ahead – Economic Data, Monetary Policy, and Geopolitics in Focus

On the Macro

It’s a quieter week ahead on the economic calendar, with 45 stats in focus in the week ending 23rd April. In the week prior, 72 stats had been in focus.

For the Dollar:

After a quiet 1st half of the week, the weekly jobless claims figures on Thursday will influence.

Expect any increase in claims to test market risk appetite.

On Friday, prelim private sector PMI figures for April wrap things up. The services PMI will have the greatest impact on the markets.

In the week ending 16th April, the Dollar Spot Index fell by 0.66% to 91.556.

For the EUR:

It’s a quiet start to the week on the economic data front.

German wholesale inflation figures for March are due out on Tuesday. Increased market sensitivity to inflation will give the numbers greater attention than usual.

The focus will then shift to prelim April private sector PMIs for France, Germany, and the Eurozone on Friday.

On the monetary policy front, the ECB will also deliver its first monetary policy decision of the quarter on Thursday.

While the ECB is expected to stand pat on interest rates, updates on the bond purchasing program will be the main area of interest.

From the ECB press conference, views on the economic outlook will also need monitoring on the day.

At the end of the week, ECB President Lagarde will be back in action. Following the Thursday press conference, however, there shouldn’t be too many surprises.

The EUR ended the week up by 0.66% to $1.1977.

For the Pound:

It’s a busy week ahead on the economic calendar.

In the first half of the week, employment, wages, and inflation figures will be in focus.

Expect March claimant counts and annual rate of inflation to be the key drivers.

The focus will then shift to March retail sales and prelim private sector PMIs for April on Friday.

Expect the retail sales and services PMI figures to be the key drivers at the end of the week.

On the monetary policy front, BoE Gov. Bailey is scheduled to speak on Wednesday. Expect any views on the economic outlook or monetary policy to influence.

The Pound ended the week up by 0.53% to $1.3779.

For the Loonie:

It’s a relatively busy week ahead on the economic calendar.

On Wednesday, March inflation figures will be in focus ahead of house price figures on Thursday.

Expect the inflation figures to be the key driver, with focus likely to be on the core inflation figures.

On the monetary policy front, the BoC is also in action on Wednesday. With the BoC expected to stand pat on policy, the monetary policy report will be the main area of focus.

The Loonie ended the week up 0.22% to C$1.2503 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a quiet week ahead.

Prelim retail sales figures are due out on Wednesday. With consumption key to the economic recovery, expect plenty of sensitivity to the numbers.

On the monetary policy front, the RBA meeting minutes on Tuesday will also influence.

The Aussie Dollar ended the week up by 1.46% to $0.7734.

For the Kiwi Dollar:

It’s a quiet week ahead.

1st quarter inflation figures are due out on Wednesday.

Expect sensitivity to the numbers, with the markets having little else to consider in the week.

The Kiwi Dollar ended the week up by 1.55% to $0.7142.

For the Japanese Yen:

It is also a relatively quiet week ahead.

Early in the week, March trade data and finalized industrial production figures for February are due out.

Expect the trade data to have the greatest influence in the week.

At the end of the week, inflation figures for March and private sector PMIs will also draw interest. Expect the private sector PMI and services PMI in particular to have the greatest influence.

The Japanese Yen rose by 0.79% to ¥108.80 against the U.S Dollar.

Out of China

It’s a particularly quiet week ahead.

There were no material stats to provide the broader financial markets with direction in the week.

While there are no stats to consider, the PBoC is in action on Tuesday. The markets are expecting the PBoC to leave 1-year and 5-year loan prime rates unchanged.

The Chinese Yuan ended the week up by 0.49% to CNY6.5206 against the U.S Dollar.

Geo-Politics

U.S-China and U.S-Russia relations are the main areas of focus in the week ahead.

The markets will also need to monitor any chatter from Iran, however.

Corporate Earnings

There are some big names on the docket in the week ahead…

From the U.S:

IBM (Mon), Coca Cola (Mon), Procter & Gamble (Tue), Netflix (Tue), Johnson & Johnson (Tue), and American Express (Fri).

From the EU:

Nestle (Thurs), Renault (Thurs), Daimler (Fri), and Software AG (Fri).

Weekly Technical Market Insight: 19th – 23rd April 2021

Charts provided by Trading View

US Dollar Index (Daily Timeframe):

According to the US dollar index, the greenback extended the recent retracement slide by 0.7 percent last week and concluded a touch off session lows.

Technical movement observed an early-week retest at the lower side of the 200-day simple moving average, currently circling 92.21. This followed the prior week’s downside breach of the said SMA, movement typically interpreted as a bearish cue. Chart studies also shine light on nearby Quasimodo support coming in from 91.36, with subsequent selling unmasking additional layers of support at 91.00 and 90.00.

For those who read the previous week’s technical market insight, you may recall the report underlined that trend studies have displayed a downside bias since topping in March 2020, shaped by way of clear lower lows and lower highs (black arrows). Interestingly, the 93.43 31st March peak echoes the early stages of a bearish wave within the current downtrend (dashed black arrow).

RSI movement travelled south of the 50.00 centreline last week, implying momentum remains to the downside for the time being. This unearthed support at 41.24, though a break of the level indicates oversold space could be challenged.

  • While an obvious downtrend is evident, the combination of support at 91.00 and Quasimodo support at 91.36 may underpin a short-term bullish scenario this week. A 91.00 breach, on the other hand, hints at bearish conviction, targeting 90.00 support.

EUR/USD:

Monthly timeframe:

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

Following the three-month retracement slide, demand at 1.1857-1.1352 sparked a resurgence of bullish activity in April, up 2.2 percent MTD. The possibility of fresh 2021 peaks is on the table, followed by a test of ascending resistance (prior support – 1.1641).

Spinning 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:

Largely unchanged reading from previous analysis.

A closer reading of price action on the daily scale reveals EUR/USD voyaged north of the 200-day simple moving average at 1.1900 the week ending April 9th. While interpreted as a bullish signal, buyers and sellers squared off around resistance at 1.1966 at the tail end of last week.

Additional bullish sentiment this week directs the technical radar to another layer of resistance at 1.2058, with further outperformance throwing light on Quasimodo resistance at 1.2278.

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

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

H4 timeframe:

Resistance at 1.1990, sited above daily resistance at 1.1966, capped upside attempts heading into the closing stages of last week. The lack of energy from sellers hints at the possibility of a 1.1990 breach this week, with any bullish bets likely targeting supply at 1.2101-1.2059, which happens to rest on top of daily resistance at 1.2058.

H1 timeframe:

As can be seen from the H1 chart, 1.1956-1.1945 demand proved an effective floor last week, withstanding numerous downside attempts (representing a decision point to break through remaining offers within supply at 1.1956-1.1935).

Trendline support, extended from the low 1.1738, and the 100-period simple moving average at 1.1954, represent additional areas of importance. To the upside, nonetheless, technical analysts will note the 1.20 figure, a widely watched psychological level which may serve as resistance this week. Note that 1.20 resides ten pips above H4 resistance at 1.1990.

Above 1.20 on the H1, resistance is parked at 1.2026 (previous Quasimodo support).

The view from within the RSI oscillator has seen the value weave around the 50.00 centreline since early Thursday. Support to be mindful of rests at 35.45, with resistance tucked inside overbought space at 78.97.

Observed levels:

Long term:

The technical landscape on the bigger picture has buyers at the wheel for now, with monthly price attempting to claw its way out of demand at 1.1857-1.1352. This helps explain the lack of selling around daily resistance at 1.1966.

The above hints at bullish attempts this week, at least until price shakes hands with daily resistance at 1.2058.

Short term:

The bullish vibe stemming from higher timeframes places H4 resistance at 1.1990 in question, along side the 1.20 figure on the H1.

This underscores two possible scenarios:

  • A H1 breakout above 1.20, movement that could interest breakout buyers to H1 resistance at 1.2026, and then daily resistance at 1.2058 as well as H4 supply at 1.2101-1.2059.
  • A test of H1 demand at 1.1956-1.1945 could come about, with buyers likely targeting 1.20, followed by the aforementioned resistances.

AUD/USD:

Monthly timeframe:

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

Since the beginning of 2021, AUD/USD has been consolidating just south of trendline resistance (prior support – 0.4776 high) and supply from 0.8303-0.8082.

Demand at 0.7029-0.6664 (prior supply) is featured to the downside, should we see a bearish showing over the coming months.

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 modestly snapped a three-day winning streak on Friday, within striking distance of resistance at 0.7817. North of the latter, supply at 0.8045-0.7985 is on the radar.

Lower on the curve, the 0.7563 February low has delivered support since March 25th.

Momentum remains above the 50.00 centreline, according to the RSI oscillator. Increased upside momentum this week is likely to elbow things to channel resistance, drawn from the high 80.12.

H4 timeframe:

Largely unchanged reading from previous analysis.

H4 shows price retested 0.7696-0.7715 as demand Thursday and held.

Quasimodo resistance at 0.7800 deserves notice as the next potential ceiling this week, closely stationed by demand-turned supply from 0.7848-0.7867.

H1 timeframe:

Demand at 0.7715-0.7737 served buyers in early trade on Friday, guiding the currency pair to tops around 0.7760, before collapsing back into the jaws of demand. Interestingly, this demand is glued to the upper side of H4 demand at 0.7696-0.7715.

Beneath 0.7715-0.7737, 0.77 is visible, fixed north of demand at 0.7679-0.7695. This is an important area as it was within this base a decision was made to break above 0.77. Should buyers command position off 0.7715-0.7737 this week, the 0.78 level is likely watched as probable resistance (also represents Quasimodo resistance on the H4).

RSI action dipped a toe in waters beneath 50.00 on Friday, threatening possible moves into oversold space, in particular support at 19.40.

Observed levels:

Long term:

The daily timeframe displays scope to approach resistance at 0.7817 this week. Overthrowing this level underscores a possible bullish phase to supply at 0.8045-0.7985.

Short term:

Lower on the curve, H4 is attempting to secure position above demand at 0.7696-0.7715, aided by H1 demand plotted at 0.7715-0.7737. Therefore, a run higher from the aforesaid demand areas this week is on the table, targeting 0.78 on the H1, closely followed by daily resistance at 0.7817.

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 1.7 percent, is retesting the breached descending resistance, movement that may eventually ignite bullish flow. With respect to long-term upside targets, supply at 126.10-122.66 calls for attention.

Daily timeframe:

Largely unchanged from previous analysis.

Bids and offers were pretty much even on Friday, establishing what’s known as a doji indecision candle.

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 point to demand at 107.58-106.85, in conjunction with 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:

The Fib cluster drawn between 108.44 and 108.66 (blue), a zone attached to the upper side of demand at 108.31-108.50, stimulated bullish interest on Friday. Sailing through resistance at 108.99 this week may stir additional buying, with the move perhaps underpinning an approach to supply at 109.97-109.72 (houses a 50.0% retracement within at 109.77).

H1 timeframe:

Demand at 108.60-108.71, an area sharing a connection with the H4 Fib cluster at 108.44-108.66, supported price action into the second half of the week.

109 calls for attention to the upside, while any bearish flow could lead to support at 108.39.

Momentum dipped in line with price action on Friday, with the RSI oscillator now facing trendline support, taken from the low 20.94. It’s also worth pointing out the RSI crossed beneath the 50.00 centreline, indicating the possibility of increased strength to the downside.

Observed levels:

Long term:

Monthly action testing descending resistance-turned possible support, alongside daily price testing an area of support around the 108.36 lows, emphasises a potential bullish atmosphere this week.

Short term:

H4 crossing swords with a Fib cluster at 108.44-108.66, fastened to the upper side of H4 demand at 108.31-108.50, reinforces the higher timeframe bullish vibe.

While the above H4 zones may be sufficient to encourage bullish interaction, Friday’s lacklustre buying from H1 demand at 108.60-108.71 suggests the unit could be headed for H1 support at 108.39 before buyers attempt to make a show. Note the aforesaid support resides within the lower range of H4 demand noted above at 108.31-108.50.

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 subsequently 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 would generally be viewed as a bearish signal.

April has offered limited action so far, currently up by 0.4 percent.

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:

Sterling recovered earlier losses against the buck Friday and finished around session tops.

Despite the near-two-month corrective slide, GBP/USD has been trending higher since early 2020.

The technical arrangement on the daily chart remains unchanged. Quasimodo support at 1.3609 is seen, a level associated with a 1.272% Fib expansion at 1.3631, as well as 1.618% and 1.272% Fib extension levels at 1.3614 and 1.3607, respectively. In terms of resistance, April 6th top at 1.3919 is likely considered, closely shadowed by a trendline support-turned resistance, taken from the low 1.1409.

RSI movement finished Friday a touch above the 50.00 centreline, suggesting momentum to the upside could continue to gather traction this week.

H4 timeframe:

Latest developments out of the H4 chart reveal Friday crossed swords with trendline support-turned resistance, taken from the low 1.3670. Note this structure is sheltered just under resistance parked at 1.3852.

A rejection from the said resistances this week throws light back on a possible 1.3680 support test, while scaling above resistance tips the scales in favour of a push to April 6th top at 1.3919 mentioned above on the daily timeframe, with further outperformance to perhaps take aim at H4 Quasimodo resistance at 1.4007.

H1 timeframe:

Friday swept through any offers around 1.38 on Friday and triggered buy-stops. Technicians will note that price formed a bearish outside reversal into the close, alongside RSI action testing a trendline support-turned resistance (taken from the low 27.61).

What’s also technically appealing on the H1 scale this week is the Fib cluster (resistance) around 1.3870.

Observed levels:

Long term:

Although the monthly trendline resistance breach in late 2020 promotes a long-term bullish vibe, traders will likely want to see 1.4376 taken out before committing.

Short term:

Over on the shorter-term charts, buyers face a potential ceiling on the H4 scale at trendline resistance and horizontal resistance at 1.3852. H1 also turns the headlights on a Fib cluster around 1.3870. Given this, between 1.3870 and 1.3840ish, sellers could make an entrance in early trading this week, perhaps zeroing in on the 1.38 figure on the H1.

DISCLAIMER:

The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com and should be considered before deciding to deal in those products. Derivatives can be risky; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.

The Weekly Wrap – Economic Data, COVID-19 Vaccine News, and Geopolitics Were in Focus

The Stats

It was a busy week on the economic calendar, in the week ending 16th April.

A total of 72 stats were monitored, following 36 stats from the week prior.

Of the 72 stats, 38 came in ahead forecasts, with 21 economic indicators coming up short of forecasts. There were 13 stats that were in line with forecasts in the week.

Looking at the numbers, 36 of the stats reflected an upward trend from previous figures. Of the remaining 36 stats, 23 reflected a deterioration from previous.

For the Greenback, it was a second consecutive weekly loss. In the week ending 16th April, the Dollar Spot Index fell by 0.66% to 91.556. In the previous week, the Dollar had fallen by 0.90% to 92.182.

The Dollar remained under pressure following the dovish FOMC meeting minutes from the week prior. This was in spite of a pickup in inflationary pressures, with FED Chair Powell’s reassurances resonating across the markets.

Out of the U.S

It was a busier week on the economic data front.

Key stats included inflation, retail sales, and jobless claims figures, which were market risk positive.

Early in the week, a pick in inflationary pressure failed to spook the markets. In spite of the annual core rate of inflation accelerating to 1.6%, the FED’s assurance of unwavering support was key.

In the week ending 9th April, initial jobless claims decreased from 769k to 576k. Economists had forecast a decline to 700k.

In the month of March, retail sales jumped by 9.8%, reversing a 2.7% decline from February. Core retail sales rose by 8.4%, reversing a 2.5% decline from February.

Economists had forecast retail sales to rise by 5.9% and for core retail sales to increase by 5.0%.

From the manufacturing sector, the Philly FED Manufacturing PMI fell from 51.8 to 50.2 in April. Economists had forecast a sharper decline to 42.0, however.

At the end of the week, stats were also skewed to the positive. The Michigan Consumer Sentiment Index rose from 84.9 to 86.5 in April, according to prelim figures.

In the equity markets, the NASDAQ rose by 1.09%, with the Dow and the S&P500 gaining 1.18% and 1.37% respectively.

Corporate earnings supported the indexes in the week.

Out of the UK

It was a relatively busy week.

Industrial and manufacturing production, trade, and GDP figures were in focus in the week.

It was a mixed set of numbers for the Pound.

While industrial and manufacturing production partially recovered from declines in January, trade data disappointed. Manufacturing production increased by 1.3% in February, after having fallen by 2.3% in January.

The UK’s trade deficit widened from £12.59bn to £16.44bn in February. While exports to the EU picked up, it was with the rest of the world that led to the sharp widening.

In February, the UK’s trade deficit with non-EU countries widened from £4.46bn to £10.73bn.

GDP numbers also disappointed. The economy grew by just 0.4% in February, partially recovering from a 2.2% contraction in January.

In the week, the Pound rose by 0.53% to end the week at $1.3779. In the week prior, the Pound had fallen by 0.90% to $1.3707.

The FTSE100 ended the week up by 1.50%, following a 2.65% loss from the previous week.

Out of the Eurozone

It was a busy week on the economic data front.

Key stats included Eurozone retail sales, industrial production, and trade data along with economic sentiment figures for Germany and the Eurozone.

It was a mixed set of numbers for the EUR.

Retail sales rose by more than expected in February, while industrial production hit reverse.

Economic sentiment figures for Germany and the Eurozone disappointed Sentiment waned in both Germany and the Eurozone.

For Germany, the ZEW Economic Sentiment Index fell from 76.6 to 70.7, while the Eurozone’s declined from 74.0 to 66.3.

At the end of the week, the Eurozone’s trade surplus widened from €11.0bn to €17.7bn, delivering a positive spin at the end of the week.

Throughout the week, inflation figures for member states and the Eurozone were aligned with prelim figures. The pickup in inflationary pressures delivered EUR support in the week.

For the week, the EUR rose by 0.66% to $1.1977. In the week prior, the EUR had risen by 1.19% to $1.1899.

The CAC40 rallied by 1.91%, with the DAX30 and EuroStoxx600 ending the week with gains of 1.48% and 1.20% respectively.

For the Loonie

It was a quieter week.

Manufacturing sales and wholesale sales figures were in focus in the week.

The stats had a muted impact on the Loonie, however, with market sentiment towards crude oil demand providing support. WTI and Brent ended the week up by 6.42% and by 5.90% respectively.

From the Bank of Canada, the BoC’s business outlook survey reflected a pickup in optimism amongst businesses in Q1. The timing of the survey, however, muted the impact as a pickup in new COVID-19 cases and fresh containment measures were introduced after the survey dates.

In the week ending 16th April, the Loonie rose by 0.22% to C$1.2503. In the week prior, the Loonie had risen by 0.38% to C$1.2530.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 16th April, the Aussie Dollar rose by 1.46% to $0.7734, with the Kiwi Dollar ending the week up by 1.55% to $0.7142.

For the Aussie Dollar

It was a relatively busy week.

Key stats included business and consumer confidence and employment figures.

It was a mixed set of stats for the Aussie Dollar.

Business confidence softened modestly in March, while consumer sentiment improved in April.

The numbers were Aussie Dollar positive ahead of the all-important employment figures late in the week.

In March, Australia’s unemployment rate fell from 5.8% to 5.6% in spite of a rise in the participation rate. Another marked increase in employment led to the fall in the unemployment rate. It was noteworthy, however, that full employment fell in the month.

For the Kiwi Dollar

It was also a relatively busy week.

Early in the week, business confidence and electronic card retail sales were in focus.

The stats were Kiwi Dollar positive. Business confidence improved in the 1st quarter, with retail sales on the rise after a slide in February.

At the end of the week, the business PMI jumped from 53.4 to an all-time high 63.6 in March. A sharp increase in new orders and production drove the PMI to its all-time high.

On the monetary policy front, the RBNZ was also in action. While holding rates steady, the rate statement tested the Kiwi Dollar mid-week. Talk of a willingness to cut the cash rate further amidst a slowdown in the recovery pegged the Kiwi back.

For the Japanese Yen

It was a quiet week.

There were no material stats to provide the Yen with direction.

The lack of stats left core machinery orders in focus mid-week, which took an unexpected slide in February.

While the numbers drew interest, concerns over a fresh spike in new COVID-19 cases, geopolitics, and a weaker Greenback delivered Yen support.

The Japanese Yen rose by 0.79% to ¥108.80 against the U.S Dollar. In the week prior, the Yen had risen by 0.92% to ¥109.67.

Out of China

It was a busy week on the data front.

In the first half of the week trade data impressed, with exports surging by 49.0% and imports by 38.1%.

At the end of the week, GDP and industrial production figures were also in focus.

In the 1st quarter, the China economy expanded by 0.6%, quarter-on-quarter, following 2.6% growth in the 4th quarter. Economists had forecasted growth of 1.5%.

Year-on-year, the economy expanded by 18.3%, versus a forecasted growth of 19.0%. In the 4th quarter, the economy had expanded by 6.5% year-on-year.

Industrial production was up by 14.1% in March, year-on-year, falling short of a forecasted 17.2% rise. In February, industrial production had risen by 35.1%.

Other stats from China included fixed asset investment, unemployment, and retail sales figures.

Fixed asset investment rose by 25.6% year-on-year, coming in ahead of a forecasted 25.0% rise. In February, fixed asset investment had increased by 35.0%.

Retail sales increased by 34.2%, which was better than a forecasted 28%. In February, retail sales had risen by 33.8% year-on-year.

Finally, the unemployment rate fell from 5.5% to 5.3% in March. Economists had forecast for unemployment to hold steady at the end of the quarter.

In the week ending 16th April, the Chinese Yuan rose by 0.49% to CNY6.5206. In the week prior, the Yuan had risen by 0.22% to CNY6.5526.

The CSI300 fell by 1.37%, while the Hang Seng ended the week up by 0.94%.

EUR/USD Weekly Price Forecast – The Euro Continues to Reach Towards the 1.20 Handle

The Euro has had a strong week again, as we have crashed into the 1.20 handle. The 1.20 level is important on longer-term charts, and it makes interesting trading as we can continue to see a lot of noise in this general vicinity. If we were to break above the 1.20 handle, then I think the Euro goes looking towards the 1.22 level, possibly even the 1.23 level.

EUR/USD Video 19.04.21

All things been equal, this is a market that has been very noisy as of late and has been a difficult thing to hang onto at times. When you look at the last several months, we have simply chopped around and went nowhere. However, this is unfortunately the way this pair tends to move, so you need to be okay with the idea of being patient with your trade. Ultimately, the last couple of candlesticks have look very bullish, so it certainly looks as if the buyers are trying to take off, but it has a lot of work to get above the 1.20 handle.

If we were to turn around from here, the market is likely to go looking towards the 1.1830 level underneath where the 200 day EMA appears, and just below there we have the 50 week EMA. All things being equal, this is a market that will continue to give people headaches more than anything else. The yield differential between the two economies of course will come into play as well, which favors the US, and that is part of the problem here.

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

EUR/USD Price Forecast – Euro Continues to Flirt With 1.20

The Euro has tried to reach towards the 1.20 level, reaching towards the massive resistance that we had seen previously. At this point time, the market is sitting above the 50 day EMA so that is in theory a bullish sign, but we need to get a daily close above the 1.20 level in order to finally move higher for a bigger move. Until then, I think it is only a matter of time before we get sellers yet again. However, if we were to turn around a break down below the 50 day EMA, then it is likely that this market breaks down significantly.

EUR/USD Video 19.04.21

On the other hand, if we break above the 1.20 handle, that would be a very bullish sign for the Euro, sending it much higher. At that point, I believe that the market is probably going to go looking towards the 1.22 handle, possibly even the 1.23 level. All things being equal, this is a market that would signal the fact that the US dollar is in serious trouble. I think at this point though, we are trying to determine whether or not that actually going to be the case. Ultimately, this is a market that I think is going to move based upon yields in America, and of course the risk on/risk off type of attitude of traders around the world.

The European Union of course is struggling with vaccinations and a slowing of the economy, and as a result I think that what we are looking at is a representation of that situation. The United States is most certainly leading the way, so it does make a certain amount of sense that the Euro struggles to go much higher.

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

EUR/USD Mid-Session Technical Analysis for April 16, 2021

The Euro is trading nearly flat shortly ahead of the U.S. opening on Friday as Treasury yields edged slightly higher, underpinning the U.S. Dollar. Yields rebounded with the 10-year rate having fallen to 1.53% in the previous session.

In economic news, Euro Zone inflation accelerated as initially estimated in March, driven mainly by more expensive services and energy, data from the European Union’s statistics office Eurostat showed on Friday.

At 10:48 GMT, the EUR/USD is trading 1.1987, up 0.0021 or +0.17%.

Eurostat confirmed its earlier estimates that consumer prices in the 19 countries sharing the Euro rose 0.9% month-on-month for a 1.3% year-on-year increase, accelerating from a 0.9% year-on-year rate in January and February.

The European Central Bank wants to keep inflation below, but close to 2% over the medium term.

In the U.S., data for the number of building permits authorized in March, along with the number of new housing construction projects that started last month, is due out at 12:30 GMT.

The University of Michigan’s April preliminary inflation expectation and consumer sentiment data is then expected out at 12:30 GMT.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Thursday when buyers took out 1.1989 and 1.1990.

A trade through 1.1704 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 EUR/USD is vulnerable to a closing price reversal top.

The main range is 1.1603 to 1.2349. The EUR/USD is currently trading on the strong side of its retracement zone at 1.1976 to 1.1888, giving the Forex pair an upside bias.

The short-term range is 1.2243 to 1.1704. The EUR/USD is currently trading inside its retracement zone at 1.1974 to 1.2037. Trader reaction to this area will set the short-term tone.

Daily Swing Chart Technical Forecast

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

Bullish Tone

A sustained move over 1.1976 will indicate the presence of buyers. The first upside target is the Fibonacci level at 1.2037. This level is a potential trigger point for an acceleration to the upside. The daily chart indicates there is no resistance until 1.2243.

Bearish Tone

A sustained move under 1.1976 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the main Fibonacci level at 1.1888.

Side Notes

A close under 1.1966 will form a closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction.

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

EUR/USD Daily Forecast – U.S. Dollar Is Mostly Flat Against Euro

EUR/USD Video 16.04.21.

Resistance At 1.1990 Remains Strong

EUR/USD is currently testing the support at 1.1965 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get to the test of the resistance level at 91.80. In case the U.S. Dollar Index manages to settle above this level, it will move towards the next resistance at 92 which will be bearish for EUR/USD.

Today, foreign exchange market traders will focus on the final readings of inflation reports from the EU. Analysts expect that Euro Area Inflation Rate increased by 0.9% month-over-month in March. On a year-over-year basis, Inflation Rate is projected to increase by 1.3%. Core Inflation Rate is projected to grow by 0.9%. There are no signs of significant inflation in the Euro Area as the European economy remains under pressure from the third wave of the virus.

Traders will also continue to monitor the developments in the U.S. government bond markets. Currently, Treasury yields are trying to gain some ground after yesterday’s downside move. If this attempt is successful, the American currency may get more support.

Technical Analysis

eur usd april 16 2021

EUR/USD did not manage to settle above the resistance at 1.1990 and is trying to settle below the support at 1.1965. In case this attempt is successful, EUR/USD will move towards the next support level which is located at the 50 EMA at 1.1930.

A successful test of the support at the 50 EMA will open the way to the test of the next support at the 20 EMA at 1.1900. In case EUR/USD gets below this level, it will move towards the support at 1.1880.

On the upside, the nearest resistance level is located at 1.1990. If EUR/USD gets above this level, it will head towards the next resistance at 1.2025. A move above the resistance at 1.2025 will open the way to the test of the next resistance level which is located at 1.2040.

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

Economic Data and Geopolitics Keep the Dollar in the Spotlight

Earlier in the Day:

It was a busy start to the day on the economic calendar this morning. The Kiwi Dollar was in action this morning, with economic data from China also in focus.

For the Kiwi Dollar

Business PMI numbers were in focus in the early hours.

In March, the Business PMI increased from 53.4 to an all-time high 63.6.

According to the March survey,

  • A sharp increase in the production sub-index from 58.4 to 66.8 and the new orders sub-index from 58.0 to 72.5 drove the PMI to its all-time high.
  • The employment sub-index saw a more modest rise from 50.2 to 53.5

The Kiwi Dollar moved from $0.71740 to $0.71767 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.25% to $0.7152.

From China

GDP and March industrial production figures were in focus this morning.

In the 1st quarter, the China economy expanded by 0.6%, quarter-on-quarter, following 2.6% growth in the 4th quarter. Economists had forecasted growth of 1.5%.

Year-on-year, the economy expanded by 18.3%, versus a forecasted growth of 19.0%. In the 4th quarter, the economy had expanded by 6.5% year-on-year.

Industrial production was up by 14.1% in March, year-on-year, falling short of a forecasted 17.2% rise. In February, industrial production had risen by 35.1%.

Other stats from China included fixed asset investment, unemployment, and retail sales figures.

Fixed asset investment rose by 25.6% year-on-year, coming in ahead of a forecasted 25.0% rise. In February, fixed asset investment had increased by 35.0%.

Retail sales increased by 34.2%, which was better than a forecasted 28%. In February, retail sales had risen by 33.8% year-on-year.

Finally, the unemployment rate fell from 5.5% to 5.3% in March. Economists had forecast for unemployment to hold steady at the end of the quarter.

The Aussie Dollar moved from $0.77345 to $0.77241 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.35% to $0.7725.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.08% to ¥108.85 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Finalized April inflation figures for Eurozone are due out later today.

Following finalized numbers from member states in the week, we don’t expect too much influence from the numbers, however.

At the time of writing, the EUR was down by 0.12% to $1.1953.

For the Pound

It’s another particularly quiet day ahead on the economic calendar.

There are no material stats due out of the UK to provide the Pound with direction.

The lack of stats leaves the Pound in the hands of COVID-19 and vaccine news.

At the time of writing, the Pound was down by 0.22% to $1.3756.

Across the Pond

It’s another busy day ahead on the economic calendar. Building permit and housing start figures are due out along with prelim consumer sentiment figures for April.

Expect the consumer sentiment figures to have a greater impact on the day.

Away from the economic calendar, chatter from Capitol Hill will also need monitoring.

At the time of writing, the Dollar Spot Index was up by 0.09% to 91.757.

For the Loonie

It’s another quiet day ahead on the economic calendar. Wholesale sales figures for February are due out later today.

Barring particularly dire numbers, however, we don’t expect too much influence from the stats.

Expect market risk sentiment and COVID-19 vaccine news to remain key areas of focus.

At the time of writing, the Loonie was down by 0.12% to C$1.2558 against the U.S Dollar.

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

April 16th 2021: DXY Indecisive Amid Upbeat US Retail Sales and Declining US Treasury Yields

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 2.1 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:

Partly modified from previous analysis.

Despite US retail sales surging 9.8 percent in March, and US unemployment claims totalling 576,000 (consensus: 703,000), the US dollar index concluded Thursday unmoved.

EUR/USD, as you can see, engages with resistance drawn from 1.1966. Additional bullish sentiment directs the technical radar to another layer of resistance at 1.2058.

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

RSI analysis has the value hovering within TOUCHING 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:

Although the pair left behind a muted tone on Thursday, resistance at 1.1990 made an entrance.

Traders will be looking to 1.1937 to provide support should a modest decline materialise. A 1.1990 breach, on the other hand, shines the technical spotlight on supply at 1.2101-1.2059, which happens to rest on top of daily resistance at 1.2058.

H1 timeframe:

1.1956-1.1945 demand is an area of technical importance on the H1 scale, representing a decision point to break through remaining offers within supply at 1.1956-1.1935.

South of demand, analysts will note trendline support, extended from the low 1.1738, aligning with the 100-period simple moving average at 1.1935. Equally important, of course, is potential resistance residing around the 1.20 figure, a widely watched psychological level.

RSI action dipped to trendline support, taken from the low at 20.57.

Observed levels:

Longer-term flow reveals monthly price showing signs of bullish life out of demand at 1.1857-1.1352, potentially placing upside pressure on daily resistance at 1.1966.

Across the page on the shorter-term charts, we can see that although H1 demand is respected structure at 1.1956-1.1945, H1 trendline support and the 100-period simple moving average at 1.1935 could be the more appealing supports, having seen a convergence with H4 support at 1.1937.

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. Any 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:

Partly modified from previous analysis.

Functioning as a proxy for global risk sentiment, the Australian dollar extended recovery gains against the US dollar on Thursday.

Up by 0.4 percent at the time of writing, increased interest to the upside shifts focus to resistance at 0.7817.

It’s also worth noting that since 25th March, buyers and sellers squared off around the 0.7563 February low, aided by a 1.272% Fib extension at 0.7545.

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

Momentum, as measured by the RSI oscillator, recently scaled the 50.00 centreline after discovering a floor off channel support at the end of March, taken from the low 43.70.

H4 timeframe:

The technical landscape on the H4 scale shows price retested 0.7696-0.7715 as demand yesterday and established short-term buying. Quasimodo resistance at 0.7800 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, despite sparking moderate bearish flow in early trade on Thursday, stepped aside and served as demand heading into US hours. North of 0.7747-0.7734, the path appears relatively clear to 0.78.

In spite of the bullish tone, momentum, according to the RSI oscillator, is levelling off in the form of bearish divergence out of overbought territory. Note Wednesday also shook hands with resistance at 80.85.

Observed levels:

The daily timeframe displays scope to approach resistance at 0.7817, a level sharing space with Quasimodo resistance on the H4 timeframe at 0.7800 which, of course, also represents 0.78 psychological resistance on the H1.

The above, therefore, informs technicians that a short-term bullish wave may come about from H1 demand at 0.7747-0.7734 today, targeting 0.78.

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 1.8 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:

Largely unchanged from previous analysis.

USD/JPY shed 0.2 percent on Thursday, nearing three-week troughs in the shape of four consecutive bearish candles.

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 show 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:

Recent downside action pulled H4 candles into 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 London and early US hours probed demand at 108.60-108.71 (shares a connection with the H4 Fib cluster at 108.44-108.66). To the upside, 109 calls for attention, while any bearish flow could lead to support at 108.39.

RSI movement shows the value bottoming north of oversold space, forming what technicians call bullish divergence.

Observed levels:

Monthly action testing descending resistance-turned possible support, alongside daily price testing a possible area of support around the 108.36 lows and H4 crossing swords with a Fib cluster at 108.44-108.66, could have H1 buyers attempt to make a show from demand at 108.60-108.71.

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.

GBP/USD ended another session off 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.

RSI movement is seen closing in on the underside of the 50.00 centreline, following 40.00 lows formed on 9th April.

H4 timeframe:

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:

Unchanged from previous analysis.

The 1.38 figure, surrounded by a 1.272% Fib expansion at 1.3809 and a 50.0% retracement level at 1.3793, continued to deliver resistance on Thursday. 1.3750 support remains in sight to the downside, sharing chart space with the 100-period simple moving average at 1.3754.

Demand-turned supply at 1.3853-1.3869, along with a number of Fib studies between 1.3870 and 1.3847, is an area worth noting higher on the curve. Below 1.3750, technical eyes will likely be drawn to 1.37.

Interestingly, the RSI nudged beneath trendline support, taken from the low 27.58, and subsequently retested the lower side of the ascending line around the 55.00ish region.

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.

A H1 close above 1.3809-1.3793 may spark breakout buying, with many taking aim at H1 supply from 1.3853-1.3869. Not only does this base align with numerous Fib levels, the area also joins with H4 resistance at 1.3852.

A H1 close beneath 1.3750, on the other hand, signals a bearish scenario to 1.37.

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EUR/USD Price Forecast – Euro Struggling at Big Figure

The Euro initially tried to rally during the trading session on Thursday but gave back the gains as the 1.20 level looks to be far too resistive to get above. This is an area where we have seen a lot of selling pressure in the past, so it does make quite a bit of sense that we would pull back from here. Whether or not it is the end of the uptrend that we have recently formed is a completely different question, but at this point in time it is likely that we will see downward pressure due to the fact that we may have been a bit overdone.

EUR/USD Video 16.04.21

To the downside, the 50 day EMA could offer a little bit of support, and then possibly the 1.19 handle. All things being equal, the market is likely to see a lot of choppy volatility, as of course the US dollar is all over the place right now. There are a lot of concerns about the coronavirus situation in the European Union, and that of course will have its influence on where to go next.

To the downside, we could be looking at a move towards the 1.1830 level, which is where the 200 day EMA currently sits, and an area where we have seen noise at previously. Because of this, the market is likely to continue to see a lot of noisy behavior, and at this point in time it is likely that we would see the market continue to see the same type of chop that this pair is famous for. Looking at this market, if we were to turn around a break above the 1,20 handle, then it opens up the possibility of a move towards the 1.22 level.

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

EUR/USD Mid-Session Technical Analysis for April 15, 2021

The Euro is edging lower against the U.S. Dollar shortly before the release of the U.S. retail sales and weekly unemployment claims reports at 12:30 GMT. These reports can be the source of volatility as well as the Philly Fed Manufacturing Index, the Empire State Manufacturing Index, Capacity Utilization and Industrial Production.

At 12:10 GMT, the EUR/USD is trading 1.1968, down 0.0013 or -0.11%.

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 EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend changed to up earlier today on a move through the pair of tops at 1.1989 and 1.1990. A move under 1.1704 will change the main trend to down.

The main range is 1.1603 to 1.2349. Currently, the EUR/USD is attempting to cross to the bullish side of its retracement zone at 1.1888 to 1.1976. This zone is controlling the near-term direction of the Forex pair.

The short-term range is 1.2243 to 1.1704. Its retracement zone at 1.1974 to 1.2037 is potential resistance. The EUR/USD tested this area earlier in the session at 1.1993.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Thursday is likely to be determined by trader reaction to a pair of 50% levels at 1.1974 to 1.1976.

Bearish Scenario

A sustained move under 1.1974 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the main Fibonacci level at 1.1888.

Bullish Scenario

A sustained move over 1.1976 will signal the presence of buyers. Taking out the intraday high at 1.1993 could trigger a move into 1.2037. This 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.

EUR Finds Support after Finalized Member State Inflation Figures

It was a busier start to the day on the Eurozone economic calendar today. Finalized March inflation figures for France, Germany, and Italy were in focus.

Inflation

Germany

In Germany, consumer prices increased by 0.5% in March, which was in line with prelim figures. In February, consumer prices had risen by 0.7%. The annual rate of inflation accelerated from 1.3% to 1.7%, which was also in line with prelim figures.

According to Destatis,

  • The prices of services were up 1.6%, with prices of goods rising by 1.9% when compared with a year earlier.
  • Energy product prices were 4.8% higher than a year earlier, with food prices up by 1.6% compared with March 2020.

France

From France, consumer prices were also on the rise, with the annual rate of inflation picking up from 0.6% to 1.1%, which was in line with prelim figures. Month-on-month, consumer prices rose by 0.6% in March.

According to Insee.fr,

  • Year-on-year, service prices ticked up from 0.8% to 1.1%, with deflationary pressures for manufactured goods softening from -0.4% to -0.2%.

Italy

In Italy, the annual rate of inflation saw a more modest uptick from 0.6% to 0.8%, which was also in line with prelim figures. Month-on-month, consumer prices increased by 0.6% in March.

Market Impact

Ahead of the inflation figures, the EUR had fallen to a pre-stat low and current day low $1.19699 before finding support. Through the morning, the EUR bounced back to strike a pre-release high $1.19780.

In response to the stats, the EUR fell to a post-stat low $1.19726 before rising to a post-stat and current day high $1.19902.

At the time of writing, the EUR was up by 0.02% to $1.19819.

Up Next

A busy U.S economic calendar, with U.S retail sales, jobless claims, and Philly FED Manufacturing figures to consider.

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.

U.S Jobless Claims and Retail Sales Put the Greenback in the Spotlight

Earlier in the Day:

It was a quieter start to the day on the economic calendar this morning. The Aussie Dollar was in action this morning.

For the Aussie Dollar

Employment figures were in focus this morning.

According to the ABS,

  • The unemployment rate fell from 5.8% to 5.6% in March, while the participation rate rose from 66.1% to 66.3%.
  • In March, employment increased by 70,700 following an 88,700 rise in February. Economists had forecast a more modest 35,000 increase.
  • Full employment declined by 20,800, however, partially reversing an 89,100 rise from February.

The Aussie Dollar moved from $0.77377 to $0.77253 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.09% to $0.7721.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.05% to ¥108.88 against the U.S Dollar, with the Kiwi Dollar up by 0.10% to $0.7148.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Finalized April inflation figures for Germany, France, and Italy are due out later today.

Barring a marked upward revision from prelim figures, however, we don’t expect the numbers to influence.

Away from the economic calendar, news updates on COVID-19 and vaccination rates will continue to influence.

At the time of writing, the EUR was down by 0.04% to $1.1975.

For the Pound

It’s a particularly quiet day ahead on the economic calendar.

There are no material stats due out of the UK to provide the Pound with direction.

The lack of stats leaves market sentiment towards the latest easing of lockdown measures in focus along with next steps.

At the time of writing, the Pound was down by 0.03% to $1.3775.

Across the Pond

It’s a busier day ahead on the economic calendar. Retail sales, jobless claims, and Philly FED Manufacturing PMI numbers are in focus.

Industrial production, business inventories, and NY Empire State manufacturing numbers are also due out. We don’t expect these stats to have an impact on the broader market, however.

At the time of writing, the Dollar Spot Index was down by 0.02% to 91.671.

For the Loonie

It’s a quiet day ahead on the economic calendar. Manufacturing sales figures for February are due out later today.

Barring particularly dire numbers, however, we don’t expect too much influence from the stats.

Expect market risk sentiment and economic data from the U.S to have a greater impact market risk sentiment and the Loonie.

At the time of writing, the Loonie was up by 0.01% to C$1.2520 against the U.S Dollar.

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