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.
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.
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.
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.
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%.
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.
The S&P 500 has gotten a bit stretched over the last couple weeks, and we are starting to see that as the momentum is most certainly dropping. At this point in time, the market is likely to continue to see a lot of noise, but I do think that we have a couple of support levels underneath that should come into play. The first one would be the 4100 level, which of course has support due to the fact that we have tested it recently, and it is also a large, round, psychologically significant figure.
S&P 500 Video 15.04.21
After that, we have a gap near the 4000 level, which not only would it be supportive because of that gap, but also that large figure as well. The 50 day EMA then follows at the 3935 level. It is not until we break down below 3900 that I would be concerned about the uptrend, and even then, I would be a buyer of puts, not necessarily someone looking to short this market. After all, we have been taught over the last 13 years that the Federal Reserve will certainly jump into the fray every time it has to pick the market up, so the last thing you want to do is be short of an index when something like that happens. With that being the case, I am looking for pullbacks as potential buying opportunities going forward and will treat them as such. With that being the case, I am going to simply sit on the sidelines and wait for an opportunity to pick up “value” going forward.
Silver markets have gone back and forth during the course of the trading session on Wednesday, as the 50 day EMA has offered a significant amount of resistance. That being said, the market is likely to continue the overall consolidation that we have seen over the last couple of days. If you remember, I recently stated that if we could close above the 50 day EMA on a daily chart, that might be something worth buying, but at this point time we simply do not have the momentum to make that happen. I think that we continue to chop back and forth in this area until we find some type of reason to go higher or lower, and it is probably also worth noting that we are sitting between the 50 and the 200 day EMA indicators.
SILVER Video 15.04.21
The US dollar of course will have a significant effect on silver as well, so having said that I think what you are looking at is a scenario that is going to be choppy and noisy to say the least. Ultimately, this is a market that I think is trying to find its footing, and that takes time. However, if we were to break down below the $24 level, that could open up fresh selling. At that point, I would anticipate that the market may have to go to the $22 level underneath as it is the next major support level. With that being the case, I still would not get overly bearish, at least not until we break down below the $22 level. If that level gets slammed underneath, then silver will sell off quite drastically.
The West Texas Intermediate Crude Oil market has found itself to be very strong during the trading session on Wednesday as the inventory number showed that there was a significant drop in inventory. That of course is bullish for the commodity and the idea of the “reopening trade.” With that being the case, I think this is a market that will continue to try to grind higher, perhaps reaching towards the $65 level above. At that point, we have seen a lot of selling so it will be interesting to see how that plays out. Ultimately, the $60 level should now offer significant support in this market.
Crude Oil Video 15.04.21
Brent markets have also rallied during the trading session, breaking above the $66 level. There is a significant amount of demand out there for crude it appears, and that should continue to lift this market. Currently, it looks as if Brent is going to try to go looking towards the $67.50 level, an area that had seen a lot of selling in the past. To the downside, I believe that the 50 day EMA will offer a bit of a short-term floor, and traders will continue to pay attention to it. If that happens, I think what we will see this point in time is a bit of a bounce.
It appears that the demand for crude oil is picking up, and it does not hurt the both the IEA and OPEC both revise their demand forecasts higher for the rest the year, and therefore demand should continue to be a major driver of crude oil going forward.
Natural gas markets have rallied a bit during the trading session on Wednesday to reach above the 50 day EMA but found plenty of sellers just north of it. That being said, the market looks as if it is ready to continue to chop sideways, perhaps before breaking down further. After all, natural gas will be in low demand season very shortly, as temperatures in the northern hemisphere rise. While that is not the only thing going on, it is by far the most important thing going on.
NATGAS Video 15.04.21
Natural gas markets of course have been very choppy as of late but if we were to turn around a break down below the 200 day EMA, that could convince me to start selling again, and perhaps aiming for lower level such as the $2.25 level, possibly even down to the $2.00 level. This time of year, I have no interest whatsoever in trying to buy natural gas, because quite frankly the demand will not come anywhere near the massive oversupply that we see on a regular basis.
With that being the case, I think what we are looking at is the possibility of a significant break down going forward, but this is a seasonal trade, and a lot of traders will have already known that. With that being the case, I think it is only a matter of time before one has to look at the possibility of fading rallies going forward, as it has certainly worked recently. Natural gas continues to be abundant, and therefore not necessarily something that demand is not taken care of.
Gold markets have pulled back a bit during the trading session on Wednesday as we continue to see a lot of noise in general. With that being the case, it looks as if the $1750 level is going to continue to be an area of interest, and it is worth noting that the 50 day EMA sits just above there, offering psychological and perhaps even technical resistance. That being said, I do not necessarily think that we need to pile in on shorting gold, but it is most certainly sitting there with its back against the wall.
Gold Price Predictions Video 15.04.21
If we did break above the 50 day EMA, and close above there on a daily chart, then I might consider taking a short-term trade to the upside, as it could open up gold towards the 200 day EMA which currently sits just below the $1800 level. Breaking above there then kicks off a longer-term uptrend. With this being the case, the market then should continue to go looking towards the $1950 level, where we had seen a major sell off.
On the other hand, if we were to break down below that double bottom near $1675, the market then probably drops another $175 rather quickly, as the $1500 level is the next major support level that I see on the chart. The market of course is going to be very noisy, but at the end of the day I think what we are looking at is a downtrend that is being very stubborn about giving up, but we also have significant support underneath. In other words, it is going to be very choppy going forward, but that is typical of gold.
U.S. Dollar Is Losing Ground Against Canadian Dollar
USD/CAD is currently trying to settle below the support at 1.2525 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index managed to settle below the 50 EMA at 91.80 and is moving towards the support at 91.50. In case the U.S. Dollar Index manages to get to the test of this level, USD/CAD will find itself under more pressure.
Today, foreign exchange market traders followed the developments in commodity markets which moved higher and provided support to commodity-related currencies like Canadian dollar.
WTI oil gained strong upside momentum after Iran stated that it would enrich uranium up to 60% purity because of the recent attack on its nuclear facility. Currently, WTI oil is trying to settle above the $63 level. If this attempt is successful, Canadian dollar may get more support.
Meanwhile, Treasury yields moved higher, providing some support to the U.S. dollar. However, this support was not sufficient enough to offset the impact of strong commodity markets so USD/CAD moved lower.
USD to CAD managed to get below the support at 1.2550 and is trying to settle below the next support level which is located at 1.2525. This support level has been tested several times in recent trading sessions and proved its strength.
In case USD to CAD declines below the support at 1.2525, it will gain downside momentum and head towards the next support level at 1.2500. RSI is in the moderate territory so there is plenty of room to gain downside momentum in case the right catalysts emerge.
If USD to CAD settles below the support at 1.2500, it will move towards the next support at 1.2470. A successful test of the support at 1.2470 will open the way to the test of the support at 1.2450.
On the upside, the previous support at 1.2550 will likely serve as the first resistance level for USD to CAD. A move above this level will lead to a test of the resistance at the 20 EMA at 1.2560. If USD to CAD gets above the 20 EMA, it will move towards the next resistance which is located near the 50 EMA at 1.2590.
Goldman Sachs Stock Moves Higher After Strong Quarterly Report
Shares of Goldman Sachs gained strong upside momentum after the company released its quarterly report. The company reported revenue of $17.7 billion and GAAP earnings of $18.60 per share, easily beating analyst estimates on both earnings and revenue. Goldman Sachs declared a quarterly dividend of $1.25 per share, in line with the previous dividend.
The company noted that its investment banking segment generated record quarterly net revenues of $3.77 billion, and the firm retained its first position in worlwide announced and completed mergers and acquisitions. Other business segments also performed well.
The unprecendented support provided by the world central banks boosted capital markets and deal activity which was bullish for Goldman Sachs. Reports from other financial companies that were published today were also strong so it’s an industry-wide trend.
What’s Next For Goldman Sachs?
Shares of Goldman Sachs reached all-time high levels back in March 2021 at $356.85. At this point, it looks that the stock has good chances to get to the test of this level.
Analysts expect that Goldman Sachs will report earnings of $33.06 per share in 2021 and $33.71 per share in 2022, so the stock is trading at just 10 forward P/E which is cheap in today’s market environment. It should be noted that earnings estimates have been steadily moving higher in recent months, and analysts will likely increase them after the strong quarterly report.
The recent pullback in Treasury yields has put some pressure on financial stocks, but the solid quarterly performance should help Goldman Sachs gain more upside momentum. In addition, the risk of higher inflation (and higher yields) is real, which is bullish for the financial sector. Meanwhile, shares of Goldman Sachs look ready to test the recent highs as the company’s quarterly performance was strong while its valuation remains attractive.
Silver faced resistance near $25.55 and pulled back while the U.S. dollar remained under pressure against a broad basket of currencies.
The U.S. Dollar Index managed to settle below the support at the 50 EMA at 91.80 and is trying to develop additional downside momentum. In case this attempt is successful, the U.S. Dollar Index will head towards the next support at 91.50 which will be bullish for silver and gold price today. Weak dollar is bullish for precious metals as it makes them cheaper for buyers who have other currencies.
Gold pulled back towards the nearest support level at the 20 EMA at $1735. This level has been tested several times in recent trading sessions and proved its strength. In case gold declines below the 20 EMA, it will head towards $1720 which will be bearish for silver.
It should be noted that Treasury yields are rebounding after yesterday’s downside move, which is a bearish catalyst for precious metals.
Meanwhile, gold/silver ratio is testing the support at the 50 EMA at 68.60. If gold/silver ratio settles below the 50 EMA, it will gain downside momentum which will be bullish for silver.
Silver did not manage to settle above the resistance at $25.55 and declined towards the nearest support level at the 20 EMA at $25.30. The next support level is located at $25.20, so silver will likely get material support in the $25.20 – $25.30 area.
If silver settles below the support at $25.20, it will head towards the next support level at $25.00. A successful test of this support level will open the way to the test of the next support at $24.70.
On the upside, the nearest resistance level for silver is located at $25.55. If silver gets above this level, it will get to the test of the 50 EMA at $25.65. A move above the 50 EMA will push silver towards the resistance at $25.85. If silver manages to settle above this level, it will move towards the $26.25 – $26.30 resistance area.
The US dollar has fallen initially against the Japanese yen during the trading session on Wednesday but looks as if it is finding a little bit of support exactly where you would expect it based upon previous trading action.
USD/JPY Video 15.04.21
After all, we have seen a lot of noise in this general vicinity, so it does make a certain amount of sense that traders would come back in and try to pick it up “on the cheap.” The market had gotten way ahead of itself, so a pullback to this area of consolidation made the most sense, and now it looks as if we may be able to start taking off again. If that is going to be the case, I believe that we will probably revisit the highs sooner rather than later.
Regardless of what happens next, I am not willing to sell this market, because quite frankly it is far too bullish from a longer-term standpoint. Ultimately, I think this is a market that will find its way back to the ¥111 level, possibly even all the way to the ¥110 level. Interest rate differentials between the two countries continue to be a major factor, so that cannot be stressed enough in this scenario. After the big move that we had previously seen, it does make quite a bit of sense that we would continue to see a lot of noise, but ultimately, I do think we are in a scenario that the market needed to calm down and find a little bit of stability, which is something that I think has happened over the last couple of weeks.
The British pound has rallied a bit during the trading session on Wednesday to break above the 50 day EMA, only to turn around and give that right back up almost immediately. By doing so, it has formed a less than enthusiastic candlestick, making this a very unlikely scenario for a sudden break out. This does not mean that I think the market is going to fall apart, rather I think we have a lot of work to do before we get to the upside again. Having said that, if we were to break above the top of the candlestick from the trading session on Wednesday, that could be a very good sign.
GBP/USD Video 15.04.21
If we were to break down below the lows from earlier this week, that opens up the possibility and the high likelihood of a move down to the 1.35 handle. That is an area that is a large, round, psychologically significant figure, and also features the 200 day EMA. With that in mind, I would be very interested in buying down at that level, assuming that we get there and of course get a bit of a bounce. If we do not get that bounce, then I would be a little bit more suspicious.
Whether or not the US dollar can climb against other currencies seems to be an open-ended question, and depending on who you listen to, the answers very wildly. As for myself, I think what we are going to see is more choppiness than anything else, making it yet another headache inducing couple of months in some of these pairs. I suspect the British pound will probably be one of them.
The British pound has initially tried to rally during the trading session on Wednesday but gave back the gains after we crossed above the psychologically important ¥150 level. This is an area that I believe will continue to be important, but I will admit that the most recent price action has not been overly impressive. While anticipating a pullback after a couple of moves higher is not a huge stretch of the imagination, the reality is that we have seen attempts to rally this market for days in a row, all of which have been beaten back rather severely.
GBP/JPY Video 15.04.21
I do not necessarily think that we are going to see some type of massive meltdown, but we are clearly not ready to take off to the upside. If we break down below the 50 day EMA, then we could see this pair drop down to the ¥145 level. While that may sound a bit drastic, the reality is that it would not be that out of the question, considering just how parabolic the pair had gotten. It would represent a nice pullback but not necessarily some type of trend change. In that scenario, I think a lot of longer-term traders would be very interested in this pair at the ¥145 level.
On the other hand, we could break above the highs of the last several sessions, opening up the gateway to the ¥152.50 level. From a longer-term perspective, this makes more sense, but it is worth noting that the momentum has certainly slowed in this pair, which is quite often what you see right before some type of corrective phase.
The Euro has rallied a bit during the trading session on Wednesday to reach towards the 1.20 level. That is an area that has seen significant resistance as of late and will be a serious challenge for the Euro bulls. If they can overtake that area, then it would be a very healthy and positive sign for the Euro. The question here is whether or not this has been a significant rally, or have we just simply seeing a correction? There is a lot going on in the world right now, and of course that has attracted the attention of Forex traders in both directions. With that being the case, I think what we are seeing here is a potential selling opportunity, but I need to see the market pull back just a bit.
EUR/USD Video 15.04.21
However, if we were to take off above the 1.20 level, then I believe it opens up the possibility of a move to the 1.22 level. We have seen significant selling in that area, but one thing that I cannot help but notice is that when you look at longer-term charts, the Euro, the Aussie, and the New Zealand dollar are all showing hesitation at these elevated levels. The question begs whether or not we are going to see continued US dollar strength later this year?
While we have certainly seen a bit of a “risk on” type of attitude from traders, the question that keeps popping up in my mind is whether or not the United States will be given currency strength due to coronavirus vaccinations and just a simple matter of the US being stronger than other nations? I am currently looking for a selling opportunity but do not quite see it.
The Aussie dollar has broken above the 50 day EMA during trading on Wednesday to clear the 50 day EMA, something it has not been able to do for quite some time. Having said that, when you look at the longer-term charts there are still a lot of concerns just above and quite frankly there are some bearish signals coming out of the Chinese equity markets. If that is going to pick up steam, that will certainly work against the value of the Aussie sooner or later. Because of this, I do think that you need to be very cautious about buying this pair based upon this sudden move.
AUD/USD Video 15.04.21
It is worth noting that there has been a shooting star for both February and March in this market, and that does suggest that there could be some trouble ahead. That being said, I think what we are looking at here is a scenario where traders are trying to discern whether or not there is a catalyst to finally break above the 0.80 level above. That is massive resistance on the monthly charts, so it should be paid close attention to. Ultimately, when you see a couple of shooting stars in a row on the monthly chart, you should take notice and realize it does not happen that often.
Do not get me wrong, I am not expecting the Australian dollar to completely fall apart, but I think a pullback, bigger than the one that we have seen, is a very real possibility at this point. Obviously, you will want to scale into a position to the downside. However, if we break above the 0.78 level then I think we will make another run at the 0.80 level. I would expect more noise.
Wells Fargo and Co. (WFC) is ticking higher in Wednesday’s pre-market after beating Q1 2021 top and bottom line estimates by wide margins. America’s third largest bank posted a profit of $1.05 per-share, $0.40 better than expectations, while revenue rose just 2.0% year-over-year to $18.06 billion, beating consensus by $600 million. Credit loss provisions decreased by $5.1 billion, underpinned by “continued improvements in the economic environment.”
Waiting on Fed Approvals
The bank is overhauling its risk management and governance as part of a Fed-guided plan to lift asset caps, which in turn will improve shareholder benefits and allow greater risk taking. It’s now expected that temporary restrictions on bank holding company dividends and share repurchases put into place at the start of the pandemic will end for most firms on June 30. Wells is scrambling to get required policies in place ahead of final approvals later this quarter.
Credit Suisse analyst Susan Roth Katzke summed up improved sentiment recently, noting, “We asked for targets and supporting disclosure to increase clarity on the path to improved returns; both were delivered with fourth quarter results. To be sure, the path forward has its obstacles and revenue growth remains a challenge, but the combination of evident progress, incremental investment, excess capital, and the inherent franchise opportunity reduce the downside risk and render the aspiration of a 15% ROTE achievable, in time”.
Wall Street and Technical Outlook
Wall Street consensus now stands at an ‘Overweight’ rating based upon 14 ‘Buy’, 3 ‘Overweight’, and 10 ‘Hold’ recommendations. No analysts are recommending that shareholders close positions. Price targets currently range from a low of $34 to a Street-high $65 while the stock is set to open Wednesday’s session about $3 below the median $43 target. While modest upside is possible with this placement, prolific gains many have to wait for the Fed’s OK on dividends and buybacks.
Wells Fargo underperformed its rivals after 2016’s disclosure it created millions of fraudulent savings and checking accounts. The stock posted an all-time high in January 2018 and turned sharply lower through 2019 and into 2020 when the bottom dropped out following the Wuhan outbreak. The recovery wave since October has stalled at the .618 Fibonacci retracement of the selloff that began in December 2019, generating much weaker gains than bank indices and commercial rivals that are now trading at multiyear and all-time highs.
Gold traders are fighting to keep the bullish dream alive and they’re trying to create the right shoulder of the Inverse head and shoulders pattern. A breakout of the neckline can possibly bring serious bullish sentiment.
Silver bounced from a crucial support on the 24.8 USD/oz.
Brent oil broke the mid-term down trendline and is aiming higher.
The Dow Jones is in the third wedge pattern in a row. The previous two ended in an upswing.
The EURUSD climbed back above the 23.6% Fibonacci.
The GBPUSD wasted a great chance for an upswing and failed to break the neckline of the inversed head and shoulders pattern.
The AUDUSD on the other hand, is very close to activating the buy signal from its own inversed head and shoulders formation.
The USDCAD is locked in a tight rectangle below major down trendlines.
The GBPAUD is in a sweet long-term sell signal, after the price created a head and shoulders pattern at the end of the wedge. A breakout of the lower line of the wedge opens a way towards new mid-term lows.