Week In Review: Earnings Kick Off, More Record Highs, China’s GDP Surges

We highlighted how inflation expectations remained a hot topic for debate and discussed whether earnings season could encourage the risk-on mood.

In our technical outlook, the Japanese Yen caught our attention after marching into the week on a solid footing. Looking at the technical picture, we discussed the possibility of the USDJPY breaking out of its current range with support at 109.00 and resistance at 109.84. Prices are trading around 108.82 as if writing.

On Tuesday morning, we covered the Euro and questioned whether the currency’s fortune was set to reverse. It has appreciated against most G10 currencies this month excluding the Swedish Krona, Swiss Franc, and New Zealand Dollar.

Interestingly, the Euro has gained almost 0.7% against the dollar since Monday despite the mixed economic data from Europe and third wave of Covid-19 sweeping across the continent…

We also took a deep dive into the Pound’s outlook after England moved into the second stage of the government’s roadmap out of lockdown. Is the GBPUSD poised for a breakdown? Well…not anytime soon as prices are trading back above 1.3800.

Buying sentiment towards the Dollar took a hit on Tuesday afternoon after US CPI data beat market expectations. The Dollar has depreciated against every single G10 currency this week and currently testing the 91.50 support level.

In other news, Bitcoin hit a new record high just shy of $65,000.

Earnings season finally kicked off on Wednesday with JPMorgan, Goldman Sachs, and Wells Fargo reporting their earnings before US markets opened. In our earnings preview, we covered JPMorgan Chase and interesting technical levels on the charts. The bank posted first-quarter profit of $4.50 per share including a $1.28 per share benefit from the reserve release. This was much higher than the $3.01 per share expected. JP Morgan shares are up almost 20 year-to-date.

Elsewhere, Coinbase went public on Nasdaq on Wednesday.

Interestingly, the Dollar remained depressed even after US retail sales figures beat expectations. Retail sales exploded higher in March, surging 9.8% thanks to a combination of better weather, robust job growth, and another wave of pandemic relief checks from the government.

The S&P 500 rallied to a fresh record high near the end of the week thanks to upbeat economic data from the U.S.

On Friday, China was in the spotlight after posting its highest ever recorded GDP growth of 18.3% in the first quarter of 2021.

In the commodities arena, Gold continues to derive strength from falling Treasury yields, a weaker Dollar, and worsening coronavirus conditions in Europe. The rising tensions between the United States and Russia may be the icing on the cake for Gold bulls with prices trading around $1778.50 as of writing.

With earnings season picking up pace in the week ahead and major economies releasing key data, strap on your seatbelts and get ready for more action.

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Lukman Otunuga

Lukman Otunuga is a research analyst at FXTM. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in the various factors affecting the currency and commodity markets. Lukman provides in-depth analysis on the global currency and commodity markets and is often quoted by leading international media outlets such as: MarketWatch, CNBC, NASDAQ, Reuters, AFP, The Guardian and Yahoo. Prior to joining FXTM, Lukman spent two years as a research analyst with international currency broker FXCM, where he focused on a technical and fundamental analysis of the global currency, commodity, and stock markets. Lukman was also responsible for leading educational seminars for international and local high net worth individuals, and has published a series of educational articles on forex trading with City A.M. Lukman holds a BSc (hons) degree in Economics from the University of Essex, UK and an MSc in Finance from London School of Business and Finance, where he studied corporate finance, mergers & acquisitions and the role of international financial institutions