USD/CAD Daily Forecast – Test Of Support At 1.2200

USD/CAD Video 06.05.21.

U.S. Dollar Is Under Strong Pressure Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2200 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the support at the 91 level. If the U.S. Dollar Index declines below this level, it will move towards the support at 90.70 which will be bearish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims decreased from 590,000 (revised from 553,000) to 498,000 while Continuing Jobless Claims increased from 3.65 million (revised from 3.66 million) to 3.69 million.

Tomorrow, foreign exchange market traders will have a chance to take a look at additional employment data from U.S. and Canada. In the U.S., Non Farm Payrolls report is expected to show that U.S. economy added 978,000 jobs in April. Unemployment Rate report is projected to indicate that Unemployment Rate declined from 6% to 5.8%.

In Canada, Employment Change report is expected to show that Canadian economy lost 175,000 jobs in April. Unemployment Rate is expected to increase from 7.5% to 7.8%.

Technical Analysis

usd cad may 6 2021

USD to CAD managed to settle below the support at 1.2250 and gained strong downside momentum. Currently, USD to CAD is testing the next support level which is located at 1.2200. RSI moved into the oversold territory, but USD to CAD may gain additional downside momentum in case the right catalysts emerge.

If USD to CAD settles below the support at 1.2200, it will move towards the next support level at 1.2170. A successful test of the support at 1.2170 will open the way to the test of the support at 1.2130.

On the upside, USD to CAD needs to stay above 1.2200 to have a chance to develop upside momentum in the near term. The next resistance level for USD to CAD is located at 1.2250.

If USD to CAD gets above this level, it will move towards the resistance at 1.2280. A move above this level will open the way to the test of the resistance at 1.2310.

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

Silver Price Daily Forecast – Resistance At $27.50 In Sight

Silver Video 06.05.21.

Weak Dollar Provides Support To Silver

Silver gained upside momentum and managed to get above the resistance at $27.00 while the U.S. dollar remained under pressure against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the resistance at the 20 EMA at 91.30 and is testing the support at the 91 level. In case the U.S. Dollar Index declines below this level, it will move towards the support at 90.70 which will be bullish for silver and gold price today. Weaker dollar is bullish for precious metals as it makes them cheaper for buyers who have other currencies.

Gold is currently testing the resistance at the $1800 level. In case gold manages to settle above this level, it will head towards the resistance at $1820 which will be bullish for silver.

Gold/silver ratio managed to get below the 67 level and is trying to settle below 66.50. If gold/silver ratio declines below this level, it will move towards the 66 level which will be bullish for silver.

Technical Analysis

silver may 6 2021

Silver managed to get above the resistance at $27.00 and is trying to gain additional upside momentum. If silver settles above this level, it will move towards the resistance at $27.50. RSI remains in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

A successful test of the resistance at $27.50 will push silver towards the next resistance level at $27.75. If silver gets above the resistance at $27.75, it will head towards the next resistance which is located at $28.30.

On the support side, a move below the $27 level will push silver towards the support at $26.65. In case silver declines below this level, it will head towards the support at $26.30.

A successful test of the support at $26.30 will push silver towards the support which is located at the 20 EMA at $26.15. In case silver manages to settle below this level, it will head towards the next support at the 50 EMA at $25.95.

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

EUR/USD Daily Forecast – Test Of Resistance At 1.2020

EUR/USD Video 06.05.21.

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

EUR/USD is currently trying to get back above the resistance at the 20 EMA at 1.2020 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index did not manage to settle above the resistance at the 20 EMA at 91.30 but stays close to this level. The nearest support level for the U.S. Dollar Index is located at the 91 level. If the U.S. Dollar Index gets to the test of this level, EUR/USD will get more support.

Today, foreign exchange market traders will have a chance to take a look at Euro Area Retail Sales data for March. Analysts expect that Retail Sales increased by 1.5% month-over-month in March after growing by 3% in February. On a year-over-year basis, Retail Sales are projected to increase by 9.6% as Retail Sales were under significant pressure in March 2020.

Meanwhile, the U.S. will release Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims are expected to decline from 553,000 to 540,000 while Continuing Jobless Claims are projected to decrease from 3.66 million to 3.62 million.

Yesterday’s ADP Employment Change report was a bit worse than the analyst consensus but it still highlighted rapid employment growth, and the upcoming employment reports are also expected to show that the situation in the job market continues to improve.

Technical Analysis

eur usd may 6 2021

EUR/USD is testing the resistance at the 20 EMA at 1.2020. In case this test is successful, EUR/USD will move towards the next resistance level at 1.2040.

A move above the resistance at 1.2040 will push EUR/USD towards the next resistance at 1.2060. In case EUR/USD manages to settle above this level, it will head towards the resistance which is located at 1.2090.

On the support side, the nearest support level for EUR/USD is located at the 50 EMA at 1.1990. This support level has been tested several times in recent trading sessions and proved its strength.

In case EUR/USD declines below the support at 1.1990, it will move towards the next support level at 1.1965. A successful test of the support at 1.1965 will push EUR/USD towards the support at 1.1925.

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

GBP/USD Daily Forecast – Resistance At 1.3900 Remains A Major Obstacle On The Way Up

GBP/USD Video 06.05.21.

British Pound Is Mostly Flat Against U.S. Dollar

GBP/USD continues to test the resistance at 1.3900 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index remains near the resistance at the 20 EMA at 91.30. In case the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at the 50 EMA at 91.45 which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the Bank of England Interest Rate Decision. The rate is projected to stay unchanged at 0.1% so traders will pay attention to the Bank’s commentary.

Traders will also have a chance to take a look at the final reading of UK Services PMI report for April. Analysts expect that Services PMI increased from 56.3 in March to 60.1 in April.

In the U.S., traders will focus on Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims report is projected to show that 540,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are projected to decline from 3.66 million to 3.62 million.

Technical Analysis

gbp usd may 6 2021

GBP/USD continues its attempts to settle above the resistance at 1.3900. If GBP/USD manages to settle above this level, it will get to another test of the resistance at 1.3920.

A successful test of the resistance at 1.3920 will push GBP/USD towards the next resistance at 1.3950. If GBP/USD settles above this level, it will head towards the resistance at 1.3980. A move above this level will open the way to the test of the resistance at 1.4000.

On the support side, the nearest support level for GBP/USD is located at the 20 EMA at 1.3875. If GBP/USD manages to settle below the support at the 20 EMA, it will move towards the 50 EMA at 1.3850. A successful test of this level will push GBP/USD towards the support at 1.3800. No significant levels were formed between 1.3800 and the 50 EMA so this move may be fast.

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

Economic Data and Monetary Policy in Focus, with the Bank of England in the Spotlight

Earlier in the Day:

It was a relatively quiet start to the day on the economic calendar this morning. The Kiwi Dollar was in action early this morning.

For the Kiwi Dollar

Building consents were in focus this morning.

In March, building consents jumped by 17.9% following a revised 19.3% slide in February.

According to NZ Stats,

  • A record 41,028 new homes had been consented in the year ended March 2021.
  • In the month of March, a monthly record 4,128 new homes were consented.

The Kiwi Dollar moved from $0.72178 to $0.72169 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.01% to $0.7217.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.11% to ¥109.33 against the U.S Dollar, while the Aussie Dollar was up by 0.01% to $0.7748.

The Day Ahead:

For the EUR

It’s a quieter day ahead on the economic data front. German factory orders and Eurozone retail sales figures will be in focus later today.

While we will expect some EUR sensitivity to the retail sales figures, German factory orders will likely be the key driver.

At the time of writing, the EUR was down by 0.02% to $1.2003.

For the Pound

It’s a relatively quiet day ahead on the economic calendar. Finalized services and composite PMI figures are due out for the UK.

Expect any revisions to the services PMI to influence ahead of the Bank of England monetary policy decision later in the day.

With the markets expecting the BoE to stand pat, any dissent in the ranks and hawkish chatter would give the Pound a boost.

At the time of writing, the Pound was flat at $1.3905.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar. Unit labor costs and nonfarm productivity figures for the 1st quarter are in focus later today along with jobless claims figures.

Expect the weekly jobless claims figures to be the key driver. The markets will be looking for a fall to sub-500k levels ahead of tomorrow’s NFP numbers.

At the time of writing, the Dollar Spot Index was up by 0.01% to 91.316.

For the Loonie

It’s another quiet day ahead on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction. The lack of stats will leave the Loonie in the hands of market risk sentiment on the day.

At the time of writing, the Loonie was down by 0.01% to C$1.2268 against the U.S Dollar.

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

May 6th 2021: DXY Enters Quiet Phase Above 91.00 as Traders Await US Job’s Data on Friday

Charts: Trading View

EUR/USD:

Monthly timeframe:

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

Following a three-month retracement, demand at 1.1857-1.1352 made an entrance and inspired a bullish revival in April, up 2.4 percent at the close.

April upside throws light on the possibility of fresh 2021 peaks in the months ahead, followed by a test of ascending resistance (prior support [1.1641]).

Based on trend studies, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017. Additionally, price also breached trendline resistance, taken from the high 1.6038, in July 2020.

Daily timeframe:

Technical structure unchanged from previous analysis.

Thanks to Wednesday’s bearish presence heading into the European close, the 200-day simple moving average is now within touching distance, currently circling 1.1940 levels. This—as aired in recent technical writing—represents a dynamic value that could deliver support if tested. To the upside, however, Quasimodo resistance stands at 1.2169.

In terms of trend, despite the 2021 retracement, the currency pair has been entrenched within an uptrend since early 2020, movement that many traders will likely refer to as a primary trend on this timeframe.

The RSI recently placed support at 51.36 in the mix, following a retreat south of the overbought setting in late April.

H4 timeframe:

Wednesday’s decline, as evident from the H4 scale, had EUR/USD shake hands with support at 1.1990 and a Fibonacci cluster between 1.1971 and 1.1986 (a defined area on a price chart where Fib retracement levels converge). For the moment, buyers have welcomed the area, yet to add bullish conviction traders are likely watching for either a break of yesterday’s high at 1.2026 or a bullish candlestick configuration to form.

As highlighted in Wednesday’s technical briefing, overthrowing the aforesaid Fib cluster unearths additional support at 1.1937 (aligns closely with the 200-day simple moving average on the daily scale), while a decisive rotation to the upside shines light on resistance at 1.2108.

H1 timeframe:

For those who read Wednesday’s technical briefing, you may recall the following (italics):

From the H4 timeframe, however, focus is on support at 1.1971/1.1990 (support/Fibonacci cluster). This also unlocks a possible whipsaw through 1.20 on the H1 to test the noted H4 support as well as H1 support at 1.1989. A H1 close back above 1.20—following a 1.1971/1.1990 test—is likely to be interpreted as a bullish theme, targeting at least 1.2035 (H1) resistance.

As evident from the H1 chart, 1.20 did indeed embrace a mild whipsaw on Wednesday, allowing support to 1.1989 to enter the fray. However, upside attempts have been somewhat lacklustre thus far, unable to pencil in a fresh higher high and reach H1 resistance at 1.2035.

Action out of the RSI indicator reveals the value has struggled to overturn 47.50 resistance, parked just south of the 50.00 centreline. However, readers may also be aware that 47.50 rejections have become softer in recent trade, echoing a possible break in the not-to-distant future.

Observed levels:

Recovery from the key figure 1.20 on the H1 could still grace the chart, reinforced by the H4 crossing swords with support at 1.1971/1.1990 (support/Fibonacci cluster) and the monthly scale showing buyers rebounding from demand at 1.1857-1.1352.

Another dip-buying scenario to be mindful of is a move to H4 support at 1.1937, a level sharing chart space with the 200-day simple moving average from 1.1940 (daily timeframe).

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, buyers and sellers have been battling for position south of trendline resistance (prior support – 0.4776 high) and supply from 0.8303-0.8082. Should a bearish scenario unfold, demand at 0.7029-0.6664 (prior supply) is featured to the downside.

Trend studies (despite the trendline resistance [1.0582] breach in July 2020) show the primary downtrend (since mid-2011) remains in play until breaking 0.8135 (January high [2018]).

Daily timeframe:

Technical structure unchanged from previous analysis.

From mid-April, AUD/USD has been consolidating around resistance from 0.7817.

Territory to the downside shines the technical spotlight on February’s low at 0.7563, followed closely by trendline resistance-turned support, extended from the high 0.8007, and the 200-day simple moving average at 0.7466.

Rupturing 0.7817, nevertheless, unbolts the door for an approach to supply at 0.8045-0.7985.

Interestingly, the RSI value recently tested trendline support-turned resistance, extended from the low 36.55, though has so far been unable to influence a bearish presence south of the 50.00 centreline. Therefore, traders are urged to pencil in the possibility of a move north to test trendline resistance, drawn from the high 80.12.

H4 timeframe:

Elevated on the back of risk flow—note strong gains witnessed in European equity indexes—the Australian dollar eked out modest gains versus the greenback on Wednesday.

Erasing the majority of Tuesday’s losses, yesterday’s gains lifted price action out of 0.7696-0.7715 demand (this area experienced a whipsaw on Tuesday) and clocked a session peak at 0.7755.

AUD/USD bulls are likely eyeballing Monday’s tops at 0.7766, followed by Quasimodo resistance at 0.7800.

Also of technical relevance is the currency pair has been busy carving out a consolidation between the 0.7800 Quasimodo resistance and the aforesaid demand area since April 20th.

H1 timeframe:

US trade, in spite of efforts to hold beneath the 100-period simple moving average around 0.7737, dethroned the said SMA and crossed paths with resistance at 0.7752.

Territory north of 0.7752 throws light on a Fibonacci cluster between 0.7767 and 0.7760, closely shadowed by Quasimodo resistance at 0.7777.

Interestingly, RSI movement scaled above the 50.00 centreline and clocked tops just south of overbought status, which guided a test of a neighbouring trendline support, extended from the low 24.48.

Observed levels:

Follow-through upside, according to the H4 chart, is a possibility, at least until reaching Monday’s tops at 0.7766. Despite this, short-term buyers face H1 resistance at 0.7752, together with a Fibonacci cluster between 0.7767 and 0.7760 (which houses Monday’s peak at 0.7766).

Longer term, daily eyes likely remain on resistance from 0.7817, consequently drawing attention to the 0.78 figure based on the H1 scale and Quasimodo resistance from 0.7800 on the H4.

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.

Although April finished lower by 1.3 percent and snapped the three-month winning streak, the pair is attempting to hold the breached descending resistance, echoing potential support.

Daily timeframe:

Technical structure unchanged from previous analysis.

Despite the monthly timeframe chalking up possible supportive structure, the daily timeframe has price engaging supply at 109.97-109.18.

Trendline support, extended from the low 102.59, serves as a downside target south of current supply; a bullish showing, on the other hand, casts light towards longer-term supply at 110.94-110.29, stationed under another supply at 111.73-111.19.

Trend studies show the unit has been trending higher since the beginning of 2021.

The RSI indicator, although ending last week above the 50.00 centreline (a sign of trend strength), is seen testing resistance at 57.00.

H4 timeframe:

Technical structure unchanged from previous analysis.

61.8% Fib resistance at 109.60—located under supply at 109.97-109.72 (an area positioned within the upper range of daily supply at 109.97-109.18)—remain primary areas on the H4 scale, with support at 108.99 serving as a floor for the time being.

External areas to be aware of are support at 108.50 and neighbouring demand from 108.20-108.43, in addition to supply posted at 110.85-110.46 (fixed within daily supply at 110.94-110.29).

H1 timeframe:

It was another relatively quiet session on Wednesday, with buyers and sellers going toe to toe between the 100-period simple moving average (now circling 109.21) and supply from 109.52-109.39 (a decision point to break the 109.26 low). Despite this, we see sellers attempting to overthrow the aforesaid moving average, as we write.

Below the moving average, 109 stands in sight, joined by trendline support, drawn from the low 107.47. Below 109, however, unmasks demand at 108.57-108.46.

Above current supply, aside from tops around Monday’s peak at 109.69, we can see resistance calling at 109.95, alongside the 110 figure.

Observed levels:

The 109 figure on the H1, aligning with H1 trendline support, is an area short-term buyers may take aim at today, particularly as the 100-period simple moving average is on the verge of giving way. What’s also technically appealing around 109 is H4 support plotted at 108.99.

Technicians are also likely to note monthly currently testing descending resistance-turned support.

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 and April witnessed decreased volatility.

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

Daily timeframe:

Technical structure unchanged from previous analysis.

Resistance at 1.4003 has proved a stubborn hurdle since March, capping upside attempts on multiple occasions. Any downside from this base throws light on 1.3670 bottoms, arranged north of Quasimodo support at 1.3609.

Should buyers regain consciousness and brush aside current resistance, Quasimodo resistance at 1.4250 could enter the frame.

From the RSI indicator, the value recently dropped from 58.20 peaks and crossed swords with trendline support, pencilled in from the low 36.14. As you can see, the aforementioned trendline is holding for the time being.

As for trend, GBP/USD has been trending higher since early 2020, despite the two-month retracement.

H4 timeframe:

Technical structure unchanged from previous analysis.

Resistance at 1.3919 continues to reject upside movement, following Monday’s one-sided advance from demand at 1.3809-1.3832.

Upstream—north of 1.3919— brings light to tops around 1.3976, followed by Quasimodo resistance at 1.4007. Below the aforesaid demand brings attention to Quasimodo support at 1.3750, which happens to align with a 1.272% Fib projection at 1.3746 and a 78.6% Fib level at 1.3739 (Fib cluster).

H1 timeframe:

Sellers failed to step in from the 1.39 figure and 100-period simple moving average on Wednesday, highlighting nearby resistance at 1.3929.

As shown on the H1 chart, 1.39 represents support at the moment, aided by the aforesaid moving average. Defending 1.39 as support and taking on 1.3929 resistance potentially sets the technical stage for a run to tops noted on the H4 scale at 1.3976, as well as the 1.40 figure (housed between H1 Fibonacci resistance at 1.4013-1.3988).

Observed levels:

The combination of the 1.39 figure on the H1 and the 100-period simple moving average is a zone possibly on the radar today for short-term buyers. Breaking H1 resistance at 1.3929 could add bullish weight as this would also secure a bullish presence north of H4 resistance from 1.3919.

Longer term, technical eyes are perhaps drawn to daily resistance at 1.4003, which blends closely with the key figure 1.40 on the H1 and Quasimodo resistance on the H4 at 1.4007.

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U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 91.565, Weakens Under 91.110

The U.S. Dollar hit its highest level against a basket of currencies since April 21 on Wednesday, extending a rally as chatter about the possibility of higher U.S. interest rates and a sell-off in tech stocks soured risk sentiment to the benefit of the safe-haven currency.

At 09:17 GMT, June U.S. Dollar Index futures are trading 91.375, up 0.100 or +0.11%.

An early rally by the greenback on Tuesday was partly sparked by comments from U.S. Treasury Secretary Janet Yellen that rate hikes may be needed to stop the economy from overheating. Yellen later downplayed their importance, but even the slightest mention of U.S. tightening has an outsized impact in markets that have become so dependent on monetary stimulus.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out another swing top at 91.425. A trade through 90.395 will change the main trend to down.

The short-term range is 89.655 to 93.470. The market is currently testing its retracement zone at 91.110 to 91.565.

The main range is 94.587 to 89.155. Its retracement zone at 91.870 to 92.510 is the primary upside target.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index on Wednesday is likely to be determined by trader reaction to the short-term Fibonacci level at 91.110.

Bullish Scenario

A sustained move over 91.110 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the short-term 50% level at 91.565. This is a potential trigger point for an acceleration into a minor top at 91.810, followed by the main 50% level at 91.870.

Bearish Scenario

A sustained move under 91.100 will signal the presence of sellers. This could lead to a pullback into a minor pivot at 90.915, followed by the main bottom at 90.395.

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

Dollar Hits Highest in Over Two Weeks in Wake of Rates Chatter

By Ritvik Carvalho

The dollar’s bounce on Tuesday put pressure on the euro, which dropped once again below the $1.20 mark on Wednesday and breached important chart support in the $1.1995/1.2000 area. It hit its lowest against the buck in over two weeks, down 0.2% on the day.

The dollar index, which measures the greenback against a basket of peer currencies, rose as high as 91.436, its highest since April 19.

The bounce was partly sparked by comments from U.S. Treasury Secretary Janet Yellen that rate hikes may be needed to stop the economy overheating.

Yellen later downplayed their importance, but even the slightest mention of U.S. tightening has an outsized impact in markets that have become so dependent on monetary stimulus.

The effect was apparent in large-cap tech stocks, which suffered hefty losses overnight, dragging the Nasdaq down 1.88%.

“The markets may be tempted to do some ‘yellen and screaming’ after last night’s episode, following the apparent hawkish comments by the U.S. Treasury secretary and the subsequent backtracking,” said Valentin Marinov, head of G10 FX research at Credit Agricole.

“All that said, the comments do highlight that there is now an ongoing debate among the U.S. officials about the need to curb the Fed’s ultra-aggressive monetary stimulus.”

So far, Federal Reserve Chair Jerome Powell has argued the labour market is still far short of where it needs to be to start talking of tapering asset buying.

That position could be tested on Friday should the April payrolls report be as strong as some are suggesting. The median forecast is for a rise of 978,000, but estimates stretch as high as 2.1 million.

Three more Fed officials are speaking later on Wednesday providing the opportunity for further market-moving comments.

Westpac analysts pointed to expectations for a blockbuster payrolls number as a factor helping the dollar build a base.

“The Fed’s more influential dovish core will have the last word, but that won’t stop more hawkish regional Fed presidents from producing the odd tapering headline,” they said in a note, adding the dollar index’s uptrend could go as far as 92 if payrolls beat the lofty expectations.

Europe’s reopening and pick up in the pace of vaccinations could limit the dollar’s gains, they wrote.

Trading was limited in Asia with Japan and China on holiday, but the New Zealand dollar blipped higher to $0.7170 when local jobs data proved strong than expected.

The U.S. dollar inched higher against the yen to 109.41 and again needs to break resistance at 109.61 to encourage more speculative bids.

Sterling traded flat at $1.3895 a day ahead of the Bank of England meeting, where it is expected by some to announce a tapering of its bond-buying programme. [GBP/]

(Reporting by Ritvik Carvalho; additional reporting by Wayne Cole in Sydney and Vidya Ranganathan in Singapore. Editing by Mark Potter)

EUR/USD Daily Forecast – Test Of Support At 1.1990

EUR/USD Video 05.05.21.

Euro Is Under Pressure

EUR/USD is currently testing the support at 1.1990 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the 20 EMA at 91.35 and is moving towards the 50 EMA at 91.50. In case the U.S. Dollar Index manages to settle above the 50 EMA, EUR/USD will find itself under more pressure.

Today, foreign exchange market traders will have a chance to take a look at the final readings of Services PMI reports from EU and U.S. Euro Area Services PMI is projected to increase from 49.6 in March to 50.3 in April. Numbers above 50 show expansion, so Euro Area services segment is expected to return to growth. In the U.S., Services PMI is projected to grow from 60.4 to 63.1.

U.S. ADP Employment Change report may also have an impact on the dynamics of the U.S. dollar. Analysts expect that the report will indicate that U.S. businesses hired 800,000 workers in April.

Technical Analysis

eur usd may 5 2021

EUR/USD managed to settle below the support at the 20 EMA at 1.2020 and is testing the next support level which is located near the 50 EMA at 1.1990. RSI remains in the moderate territory, and there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

If EUR/USD settles below the 50 EMA, it will head towards the next support level which is located at 1.1965. A successful test of the support at 1.1965 will push EUR/USD towards the next support at 1.1925. In case EUR/USD declines below this level, it will move towards the support at 1.1900.

On the upside, the previous support at the 20 EMA at 1.2020 will serve as the first resistance level for EUR/USD. If EUR/USD settles above this level, it will head towards the next resistance at 1.2040. A move above the resistance at 1.2040 will open the way to the test of the next resistance level which is located at 1.2060.

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

GBP/USD Daily Forecast – British Pound Tries To Gain More Ground Against U.S. Dollar

GBP/USD Video 05.05.21.

Another Test Of Resistance At 1.3900

GBP/USD is currently testing the resistance at 1.3900 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle above the resistance at the 20 EMA at 91.35. This resistance level has already been tested many times and proved its strength. In case the U.S. Dollar Index manages to get above this level, it will move towards the 50 EMA at 91.50 which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the economic data from the U.S. ADP Employment Change report is projected to show that private businesses created 800,000 jobs in April. The final reading of Services PMI report for April is projected to show that Services PMI increased from 60.4 in March to 63.1 in April.

Traders will also keep an eye on the developments in U.S. government bond markets after yesterday’s Yellen comments about inflation which put significant pressure on tech stocks. Bond markets managed to stay calm, and the yield of 10-year Treasuries remains below the 20 EMA at 1.61%. If Treasury yields start to move higher on inflation fears, U.S. dollar may get more support.

Technical Analysis

gbp usd may 5 2021

GBP/USD continues its attempts to settle above the resistance at 1.3900. If GBP/USD manages to settle above this level, it will move towards the resistance at 1.3920.

A move above the resistance at 1.3920 will open the way to the test of the resistance at 1.3950. In case GBP/USD manages to settle above this level, it will head towards the next resistance at 1.3980. A successful test of this level will open the way to the test of the resistance at 1.4000.

On the support side, the nearest support level for GBP/USD is located at the 20 EMA at 1.3870. If GBP/USD declines below the 20 EMA, it will move towards the support at the 50 EMA at 1.3845. A move below this level will push GBP/USD towards the support at 1.3800.

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

Economic Data Puts the EUR, Pound, and Dollar in the Spotlight

Earlier in the Day:

It was a relatively busy start to the day on the economic calendar this morning. The Kiwi Dollar and the Aussie Dollar were in action early this morning.

For the Kiwi Dollar

Employment figures were in focus this morning.

In the 1st quarter, employment increased by 0.6%, following a 0.6% rise in the 4th quarter of last year. Economists had forecast a 0.2% rise.

According to NZ Stats,

  • The unemployment rate fell from 4.9% to 4.7% in the March quarter, easing further back from a Q3 peak of 5.2%.
  • While easing back, however, the unemployment remained high compared with recent years.
  • The underutilization rate increased by 0.4 percentage points to 12.2% quarter-on-quarter. Year-on-year, the underutilization rate was up by 1.8 percentage points.
  • Quarter-on-quarter, the employment rate increased from 66.8% to 67.1%, while down by 67.7% from the March quarter of 2020.

The Kiwi Dollar moved from $0.71500 to $0.71701 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.41% to $0.7174.

For the Aussie Dollar

Building approvals were in focus this morning.

In March, building approvals rose by 17.4% following a 21.6% jump in February. Economists had forecast a more modest 3.0% rise.

The Aussie Dollar moved from $0.77254 to $0.77304 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.38% to $0.7736.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.06% to ¥109.26 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic data front. Service sector PMIs for Italy and Spain are due out along with finalized PMIs for France, Germany, and the Eurozone.

Barring marked revisions to prelim figures, Italy’s services PMI and the Eurozone’s Composite PMI will likely have the greatest impact.

The devil will be in the details, with employment, new orders, and sector optimism likely to be material takeaways from the surveys.

At the time of writing, the EUR was up by 0.09% to $1.2025.

For the Pound

It’s a quiet day ahead on the economic calendar. There are no material stats for the markets to consider ahead of the Bank of England monetary policy decision tomorrow.

The lack of stats will leave the Pound in the hands of market risk sentiment on the day.

At the time of writing, the Pound was up by 0.18% to $1.3912.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. The market’s favored ISM Non-Manufacturing PMI is due out along with finalized Markit services and composite PMI numbers.

Ahead of the private sector PMIs, ADP nonfarm employment change figures are also due out.

Expect the ADP nonfarm employment change and Non-Manufacturing PMIs to have the greatest impact on the day.

At the time of writing, the Dollar Spot Index was down by 0.12% to 91.177.

For the Loonie

It’s a quiet day ahead on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction. The lack of stats will leave the Loonie in the hands of crude oil inventory numbers and market risk sentiment on the day.

At the time of writing, the Loonie was up by 0.18% to C$1.2287 against the U.S Dollar.

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

May 5th 2021: Soured Risk Appetite Elevates Safe-Haven USD Demand; Euro Tests $1.20

Charts: Trading View

EUR/USD:

Monthly timeframe:

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

Following a three-month retracement, demand at 1.1857-1.1352 made an entrance and inspired a bullish revival in April, up 2.4 percent at the close.

April upside throws light on the possibility of fresh 2021 peaks in the months ahead, followed by a test of ascending resistance (prior support [1.1641]).

Based on trend studies, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017. Additionally, price also breached trendline resistance, taken from the high 1.6038, in July 2020.

Daily timeframe:

Largely unchanged from previous analysis.

The 200-day simple moving average remains flirting around 1.1939 levels, a dynamic value that could deliver support if tested. Quasimodo resistance at 1.2169, on the other hand, commands attention to the upside.

Despite the 2021 retracement, trend studies reveal the currency pair has been entrenched within an uptrend since early 2020, movement that many traders will likely refer to as a primary trend on this timeframe.

In terms of RSI action, last week’s withdrawal from 69.00 positions the value within shouting distance of support at 51.36.

H4 timeframe:

Technical structure unchanged from previous analysis.

The Dollar index (ticker: DXY) firmed Tuesday, unwinding a portion of April’s 2 percent decline amid fading risk appetite.

As you can see, this pressured Europe’s single currency to fresh weekly troughs at 1.1998, and consequently tipped the scales in favour of a move to support at 1.1990 and a Fibonacci cluster between 1.1971 and 1.1986 (a defined area on a price chart where Fib retracement levels converge).

Overthrowing the aforesaid Fib cluster unearths additional support at 1.1937 (aligns closely with the 200-day simple moving average on the daily scale), while a rotation to the upside shines light on resistance at 1.2108.

H1 timeframe:

Tuesday’s bearish phase watched the 1.20 figure make an appearance, action that clearly stirred short-term bullish interest mid-way through London hours. Technically interesting here is the support level residing beneath 1.20 at 1.1989, a prior Quasimodo resistance.

RSI movement on the H1 pencilled in bullish divergence yesterday, as price shook hands with 1.20. Subsequent action witnessed the RSI value exit oversold waters to test space just south of the 50.00 centreline.

Observed levels:

Partly modified from previous analysis.

April showing life out of monthly demand from 1.1857-1.1352 reinforces a possible retest (dip-buying scenario) at the 200-day simple moving average from 1.1939 (daily timeframe).

From the H4 timeframe, however, focus is on support at 1.1971/1.1990 (support/Fibonacci cluster). This also unlocks a possible whipsaw through 1.20 on the H1 to test the noted H4 support as well as H1 support at 1.1989. A H1 close back above 1.20—following a 1.1971/1.1990 test—is likely to be interpreted a bullish theme, targeting at least 1.2035 (H1) resistance.

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, buyers and sellers have been battling for position south of trendline resistance (prior support – 0.4776 high) and supply from 0.8303-0.8082. Should a bearish scenario unfold, demand at 0.7029-0.6664 (prior supply) is featured to the downside.

Trend studies (despite the trendline resistance [1.0582] breach in July 2020) show the primary downtrend (since mid-2011) remains in play until breaking 0.8135 (January high [2018]).

Daily timeframe:

Technical structure unchanged from previous analysis.

From mid-April, AUD/USD has been consolidating around resistance from 0.7817.

Territory to the downside shines the technical spotlight on February’s low at 0.7563, followed closely by trendline resistance-turned support, extended from the high 0.8007.

Rupturing 0.7817, nevertheless, unbolts the door for an approach to supply at 0.8045-0.7985.

Interestingly, the RSI value is seen testing trendline support-turned resistance, extended from the low 36.55, and recently nudged south of the 50.00 centreline. North of here, traders are urged to pencil in trendline resistance, drawn from the high 80.12.

H4 timeframe:

A bearish phase unfolded on Tuesday, largely driven on the back of a USD bid amidst safe-haven demand.

Technically, this had price action whipsaw through the walls of 0.7696-0.7715 demand (and trendline support, taken from the low 0.7531), movement which missed a Fibonacci cluster between 0.7657 and 0.7672 by a whisker (green).

Upside targets to be mindful of on the H4 scale are Monday’s tops at 0.7766, followed by Quasimodo resistance at 0.7800.

H1 timeframe:

Early US hours delivered a vigorous whipsaw through 0.77 bids on Tuesday, with enough force to trip protective stops and fill breakout sellers’ sell stops to cause a bear trap. Traders will note that price snapping through 0.77 not only came within striking distance of support at 0.7668, the move was accompanied by RSI bullish divergence and a near-test of RSI support at 19.40 (the value now hovers nearby the underside of the 50.00 centreline).

The absence of supply north of 0.77 unlocks a possible bid today, taking aim at resistance from 0.7752 and the 100-period simple moving average.

Observed levels:

The 0.77 whipsaw on the H1—together with H4 crossing swords with trendline support and coming within a whisker of testing Fibonacci support at 0.7657/0.7672—underlines a potential bullish scenario above 0.77, targeting at least H1 resistance from 0.7752.

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.

Although April finished lower by 1.3 percent and snapped the three-month winning streak, the pair is attempting to hold the breached descending resistance, echoing potential support.

Daily timeframe:

Technical structure unchanged from previous analysis.

Despite the monthly timeframe chalking up possible supportive structure, the daily timeframe has price engaging supply at 109.97-109.18.

Trendline support, extended from the low 102.59, serves as a downside target south of current supply; a bullish showing, on the other hand, casts light towards longer-term supply at 110.94-110.29, stationed under another supply at 111.73-111.19.

Trend studies show the unit has been trending higher since the beginning of 2021.

The RSI indicator, although ending last week above the 50.00 centreline (a sign of trend strength), is seen testing resistance at 57.00.

H4 timeframe:

61.8% Fib resistance at 109.60—located under supply at 109.97-109.72 (an area positioned within the upper range of daily supply at 109.97-109.18)—remain primary areas on the H4 scale, with support at 108.99 serving as a floor for the time being.

External areas to be aware of are support at 108.50 and neighbouring demand from 108.20-108.43, in addition to supply posted at 110.85-110.46 (fixed within daily supply at 110.94-110.29).

H1 timeframe:

Monday’s 109 test—aided by the 100-period simple moving average—elevated the currency pair higher on Tuesday, consequently crossing paths with supply at 109.52-109.39 (a decision point to break the 109.26 low) and intersecting trendline support-turned resistance, taken from the low 107.64.

The 109.52-109.39 test, as you can see, pressured short-term flow to the 100-period simple moving average, which replied with a bullish wave back to the aforesaid supply.

Above current supply, aside from tops around Monday’s peak at 109.69, we can see resistance calling at 109.95, alongside the 110 figure. Below 109, however, trendline support, drawn from the low 107.47, is seen close by, with subsequent selling unmasking demand at 108.57-108.46.

Observed levels:

Short-term range traders will likely be drawn to the H1 scale today, as price fluctuates between supply at 109.52-109.39 and the 109 base (along with the 100-period simple moving average). Technicians may also note the 109 figure aligns closely with H4 support at 108.99.

Range traders, however, are urged to pencil in the possibility of whipsaws forming. Directly above H1 supply we have the H4 timeframe’s 61.8% Fib resistance at 109.60, while south of 109 has H1 trendline support ready to accept any fakeout movement.

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 and April witnessed decreased volatility.

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

Daily timeframe:

Technical structure unchanged from previous analysis.

Resistance at 1.4003 has proved a stubborn hurdle since March, capping upside attempts on multiple occasions. Any downside from this base throws light on 1.3670 bottoms, arranged north of Quasimodo support at 1.3609.

Should buyers regain consciousness and brush aside current resistance, Quasimodo resistance at 1.4250 could enter the frame.

From the RSI indicator, the value dropped from 58.20 peaks and crossed swords with trendline support, pencilled in from the low 36.14.

As for trend, GBP/USD has been trending higher since early 2020, despite the two-month retracement.

H4 timeframe:

1.3809-1.3832 demand, as you can see, survived Friday’s mild breach, with GBP/USD bulls entering an offensive phase and shaking hands with resistance at 1.3919 on Monday. As evident from the chart, the aforementioned resistance held firm and supported a bearish response on Tuesday.

Below the aforesaid demand brings notice to Quasimodo support at 1.3750, which happens to align with a 1.272% Fib projection at 1.3746 and a 78.6% Fib level at 1.3739 (Fib cluster).

Above 1.3919, nonetheless, brings light to tops around 1.3976, followed by Quasimodo resistance at 1.4007.

H1 timeframe:

Monday embracing resistance at 1.3929 stirred bearish flow, with early hours Tuesday pushing below the 1.39 figure and 100-period simple moving average.

As you can see, Tuesday had price knock on the door of lows at 1.3838 in early US and stage a recovery back to within touching distance of 1.39. A bearish rejection forming from the latter today, with enough force to dethrone Tuesday’s low, throws light on a possible test of 1.38 (a level mingling with a 61.8% Fib level and a 100% Fib projection at 1.3789).

RSI flow has the value attempting to find acceptance north of the 50.00 centreline, following earlier lows at 37.40.

Observed levels:

The combination of the 1.39 figure on the H1 and the 100-period simple moving average is a zone possibly on the radar today. A stab at lower prices from the aforesaid resistances is likely to zero in on H4 demand from 1.3809-1.3832, an area shadowed by the 1.38 figure on the H1.

1.39 shorts, however, must take into account H4 resistance at 1.3919 and H1 resistance from 1.3929, as these levels could pull price higher to collect more sellers (and trip 1.39 stops) before driving lower.

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.

USD/CAD Daily Forecast – Canadian Dollar Moves Lower As Demand For Riskier Currencies Declines

USD/CAD Video 04.05.21.

U.S. Dollar Gains Ground Against Canadian Dollar

USD/CAD is trying to settle above the resistance at 1.2310 while the U.S. Dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is currently testing the resistance at the 20 EMA at 91.35. This resistance level has already been tested several times in recent trading sessions and proved its strength. In case the U.S. Dollar Index gets above this level, it will move towards the resistance at 91.50 which will be bullish for USD/CAD.

Today, the U.S. reported that Factory Orders increased by 1.1% month-over-month in March after declining by 0.5% in February (revised from -0.8%). Analysts expected that Factory Orders would increase by 1.3%.

Meanwhile, Canada reported that Building Permits grew by 5.7% month-over-month in March compared to analyst consensus which called for growth of 2%.

The reports had limited impact on USD/CAD as foreign exchange market traders focused on general market sentiment. Safe haven assets like U.S. dollar and U.S. Treasuries were in demand today while riskier currencies found themselves under pressure.

Technical Analysis

usd cad may 4 2021

USD to CAD failed to settle below the support at 1.2280 and is trying to settle above the resistance level at 1.2310. USD to CAD has already managed to test the next resistance at 1.2350 but lost momentum and pulled back closer to 1.2310.

If USD to CAD manages to stay above 1.2310, it will have a chance to get to another test of the resistance at 1.2350. A move above this level will push USD to CAD towards the next resistance which is located at 1.2365.

In case USD to CAD gets above the resistance at 1.2365, it will head towards the resistance at 1.2385. A successful test of this level will open the way to the test of the resistance at 1.2400.

On the support side, a move below 1.2310 will push USD to CAD back towards the support at 1.2280. If USD to CAD settles below this level, it will gain additional downside momentum and head towards the next support at 1.2250.

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

Silver Price Daily Forecast – Test Of Resistance At $27.00

Silver Video 04.05.21.

Silver Gains Ground Despite Stronger Dollar

Silver managed to settle above the resistance at $26.65 and is testing the next resistance level at $27.00 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle above the resistance level which is located at the 20 EMA at 91.35. In case the U.S. Dollar Index manages to settle above this level, it will move towards the resistance at 91.50 which will be bearish for silver and gold price today.

At the same time, it should be noted that Treasury yields have started to move lower which is bullish for precious metals. This positive catalyst may offset the negative impact of stronger dollar during today’s trading session.

Gold is currently trying to get to the test of the resistance at the $1800 level. A move above this level will push gold towards $1820 which will be bullish for silver and other precious metals.

Gold/silver ratio managed to settle below the support at the 67 level and continues its downside move. The next material support level for gold/silver ratio is located at the 66 level. If gold/silver ratio gets to the test of this level, gold/silver ratio will get more support.

Technical Analysis

silver may 4 2021

Silver settled above the resistance at $26.65 and is trying to get above the next resistance level at $27.00. In case this attempt is successful, silver will head towards the next resistance which is located at $27.50.

A move above the resistance at $27.50 will push silver towards the next resistance level at $27.75. If silver manages to settle above this level, it will head towards the next resistance which is located at $28.30.

On the support side, the previous resistance at $26.65 will serve as the first support level for silver. If silver declines below this level, it will move towards the next support at $26.30. A move below the support at $26.30 will push silver towards the support at the 50 EMA at $25.90.

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

Will Biden Build Back Better… Gold?

Last week was full of big events. The FOMC released its newest statement on monetary policy meeting, while Powell held the press conference. On the same day, President Joe Biden made his first speech to Congress . Let’s take a look at his words.

First of all, Biden laid out his American Jobs Plan , which proposes more than $2 trillion to upgrade US infrastructure and create millions of jobs. No matter that infrastructure spending has no stimulus effect, according to economic research .

Second, if you think that $2 trillion is a lot of money, given America’s huge indebtedness, you are clearly wrong. Two trillion is practically nothing and definitely not enough, so Biden proposed another $1.8 trillion American Family Plan in investments and tax credits to provide lower-income and middle-class families with inexpensive childcare.

Third, Biden understands that all these expenditures cannot be funded solely by increasing already huge fiscal deficits (see the chart below) and issuing new bonds.

So, he proposed a hike in tax rates:

It’s time for corporate America and the wealthiest 1% of Americans to pay their fair share. Just pay their fair share (…) We take the top tax bracket for the wealthiest 1% of Americans –
those making $400,000 or more – back up to 39.6%.

No matter that corporate taxes are implicit taxes on labor and that the current proposals for tax hikes are unlikely to fund the White House’s ambitious plans.

Biden also proposed several reforms of the labor market: a 12-week paternal leave for families and an increase of the minimum wage to $15 an hour.

So, in short, his speech called for several bold economic policies aiming to increase government spending and strengthen the American welfare state. Sounds good… for gold.

Implications for Gold

What does the Biden speech, and more generally his economic agenda, imply for the precious metals market? Well, it seems that the President cares not only about the workers, but also about the gold bulls. His plan is fundamentally positive for the yellow metal . After all, Biden wants to further increase government spending, which will weaken the long-term pace of economic growth and add to the mammoth pile of the public debt .

There are also hints that this massive government spending flowing directly to the citizens could ignite inflation . After all, the US economy has already recovered from the pandemic recession , at least in the GDP terms, as the chart below shows. So, Biden’s economic agenda risks that the economy will overheat igniting inflation.

He also adopted a more confrontational stance toward China, which could elevate the geopolitical worries and increase the demand for safe-haven assets such as gold .

Another potential benefit is the proposal to raise corporate taxes, which is clearly negative for the US stock market and the greenback . Hence, gold could gain at their expense, especially if we see a pullback in the equity market…

Last but not least, the increase in the minimum wage, and other labor market reforms, will not help in a quick employment recovery, so the Fed will maintain its dovish policy for longer. Indeed, we should look at Biden’s message together with the Fed’s signals. Biden proposed trillions of dollars in new spending, while Powell reiterated no hurry to raise interest rates . What a policy mix! We have both easy monetary policy and loose fiscal policy , a golden policy mix , indeed.

Gold didn’t react strongly to these events, which is a bit disturbing, but this can be explained by the gains on Wall Street, as investors felt reassured that a financial bonanza would last undisturbed. So, the economic confidence remains high, but if it wanes, especially if inflationary threats come to the surface, gold may perform better.

If you enjoyed today’s free gold report , we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today . If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!

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

Arkadiusz Sieron, PhD
Sunshine Profits: Effective Investment through Diligence & Care

 

AUD/USD Daily Forecast – Australian Dollar Moves Lower After RBA Interest Rate Decision

AUD/USD Video 04.05.21.

U.S. Dollar Gains Ground Against Australian Dollar

AUD/USD has recently made an attempt to settle below the support at the 50 EMA at 0.7710 while the U.S. dollar gained ground against a broad basket of currencies.

The U.S. Dollar Index has recently tested the resistance at the 20 EMA at 91.30 but failed to develop sufficient upside momentum and pulled back. In case the U.S. Dollar Index gets above the 20 EMA, it will move towards 91.50 which will be bearish for AUD/USD.

Today, foreign exchange market traders focused on RBA Interest Rate Decision. RBA decided to leave the rate unchanged at 0.1%, in line with the analyst consensus.

RBA noted that the economic recovery in Australia was stronger than expected. RBA also added that the number of people with a job exceeded pre-pandemic level.

RBA revised its central scenario for GDP growth and now expects that Australia’s GDP will grow by 4.75% in 2021 and 3.5% in 2022. Interestingly, RBA believes that inflation will remain modest despite strong employment and GDP growth.

Importantly, RBA reiterated that it was not considering a change of a 0.1% yield target for 3-year government bonds. As a result, low yields will continue to serve as a bearish catalyst for the Australian dollar.

Technical Analysis

aud usd may 4 2021

AUD/USD declined below the support at the 20 EMA at 0.7730 and made an attempt to settle below the support at the 50 EMA at 0.7710. If AUD/USD gets below the 50 EMA, it will test the next support level at 0.7700.

A successful test of the support at 0.7700 will open the way to the test of the support at 0.7665. If AUD/USD declines below this level, it will head towards the support at 0.7635.

On the upside, the 20 EMA will serve as the first resistance level for AUD/USD. A move above the 20 EMA will push AUD/USD towards the resistance at 0.7750. In case AUD/USD settles above this level, it will head towards the next resistance at 0.7775. A successful test of this level will open the way to the test of the resistance at 0.7800.

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

EUR/USD Daily Forecast – Euro Is Under Strong Pressure Against U.S. Dollar 

EUR/USD Video 04.05.21.

U.S. Dollar Gains Ground Against Euro

EUR/USD is currently testing the support at the 20 EMA at 1.2025 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index has settled back above the 91 level and is testing the resistance at the 20 EMA at 91.30. In case this test is successful, the U.S. Dollar Index will gain additional upside momentum and head towards the resistance at 91.50 which will be bearish for EUR/USD.

Yesterday, EU reported that Euro Area Manufacturing PMI increased from 62.5 in March to 62.9 in April compared to analyst consensus of 63.3. U.S. Manufacturing PMI report was also a bit worse than expected as U.S. Manufacturing PMI increased from 59.1 to 60.5 compared to analyst consensus of 60.6. While the reports did not meet analyst expectations, they highlighted the strength of the rebound in the manufacturing segment.

There are no important economic reports scheduled to be released in the EU today so foreign exchange market traders will focus on the dynamics of U.S. government bond markets. Treasury yields have started to rebound after yesterday’s pullback, and the continuation of this rebound may provide additional support to the American currency.

Technical Analysis

eur usd may 4 2021

EUR/USD faced strong resistance at 1.2060 and pulled back. Currently, EUR/USD is trying to settle below the 20 EMA at 1.2025. If this attempt is successful, EUR/USD will move towards the support at 1.1990.

A successful test of the support at 1.1990 will open the way to the test of the next support level at 1.1965. In case EUR/USD declines below the support at 1.1965, it will head towards the next support at 1.1925.

On the upside, EUR/USD needs to settle back above the 20 EMA to have a chance to develop upside momentum in the near term. The next resistance level is located at 1.2040.

If EUR/USD settles above the resistance at 1.2040, it will head towards the resistance at 1.2060. A move above this level will open the way to the test of the resistance at 1.2090.

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

GBP/USD Daily Forecast – British Pound Pulls Back After Yesterday’s Upside Move

GBP/USD Video 04.05.21.

British Pound Is Losing Ground Against U.S. Dollar

GBP/USD is currently trying to get to the test of the 20 EMA at 1.3870 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to get back above the 91 level and is heading towards the resistance at the 20 EMA at 91.30. If the U.S. Dollar Index manages to settle above the 20 EMA, it will gain upside momentum and head towards the next resistance at 91.50 which will be bearish for GBP/USD.

Yesterday, U.S. reported that Manufacturing PMI increased from 59.1 in March to 60.5 in April compared to analyst consensus of 60.6. Construction Spending grew by 0.2% month-over-month in March while analysts expected that it would grow by 1.9%.

Today, foreign exchange market traders will have a chance to take a look at the final reading of UK Manufacturing PMI report for April. Analysts expect that UK Manufacturing PMI increased from 58.9 in March to 60.7 in April.

Technical Analysis

gbp usd may 4 2021

GBP/USD faced resistance at 1.3900 and pulled back. Currently, GBP/USD is trying to get to the test of the nearest support level which is located at the 20 EMA at 1.3870.

If GBP/USD manages to settle below the support at 1.3870, it will head towards the next support at the 50 EMA at 1.3845. In case GBP/USD declines below the 50 EMA, it will move towards the support level at 1.3800. This support level has been tested several times during recent trading sessions and proved its strength.

On the upside, GBP/USD needs to settle above the resistance at 1.3900 to have a chance to continue its rebound. If GBP/USD gets above this level, it will head towards the next resistance at 1.3920.

A successful test of the resistance at 1.3920 will open the way to the test of the next resistance at 1.3950. If GBP/USD settles above this level, it will head towards the resistance at 1.3980.

From a big picture point of view, GBP/USD remains range-bound, and it will likely need additional catalysts to gain momentum.

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

Dollar Finds Footing as Looming Data Pose Test for Policymakers

By Tom Westbrook

The greenback rose about 0.2% against the yen, euro and pound in trade thinned by holidays in China and Japan. It stepped up slightly further against the trade-sensitive Australian and New Zealand counterparts while the dollar index against a basket of major rivals added 0.2% to 91.151.

The advances partly reverse Monday’s losses and leave the index about 0.8% above a one-month low struck last week. Traders said its next moves hinge on U.S. labour data due Friday and clues in the interim about the thinking of Federal Reserve policymakers.

The euro last sat at $1.2036 while a dollar bought 109.29 yen. The Aussie dollar was 0.3% softer at $0.7740 and the kiwi down 0.4% to $0.7171. [AUD/]

“Markets will not be comfortable pushing the dollar all the way down given this in-your-face U.S. outperformance, and how much longer this may last given outbreaks happening elsewhere,” said Mizuho economist Vishnu Varathan in Singapore.

“If incoming data, whether its services ISM or payrolls shows job creation continues to be strong…I think markets will start gravitating towards the idea that the Fed could move sooner (than projected),” he said, referring to rate rises.

Benchmark ten-year U.S. Treasury yields had dropped on Monday following softer-than-expected U.S. manufacturing data and reassurance from New York Fed President John Williams that the recovery so far is “not nearly enough” to prompt monetary policy tightening.

But the detail in the Institute of Supply Management’s survey showed transport snarls and raw material shortages caused the dip in output, rather than any faltering demand and there are hints of division at the Fed over the best course of action.

Dallas Fed President Robert Kaplan caused a stir on Friday by calling for beginning the conversation about tapering. He is due to appear again at a Q&A session at 1700 GMT on Tuesday and a slew of Fed speakers are scheduled to talk in coming days.

“Non-voting hawks like Kaplan and (Loretta) Mester could repeat Kaplan’s call for a conversation about tapering,” Westpac analysts said in a note.

“The Fed’s dovish influential core won’t have any of it, but expectations for solid U.S. data this week and likely more hawkish regional Fedspeak leave the dollar index positioned for more two-way price action.”

Elsewhere central bank meetings are coming in to focus. The Aussie dollar was unmoved by an expected decision from the Reserve Bank of Australia on Tuesday to leave policy settings unchanged. The bank did, however, upgrade some headline economic forecasts and more detailed projections are due on Friday.

Sterling dipped marginally to $1.3870 with a Bank of England meeting on Thursday the main event in traders’ diaries. Analysts reckon the bank might announce a slowdown in its bond buying programme as vaccinations have bolstered Britain’s economy.

“The rapidly improving economic outlook in the UK amid general dollar weakness may just be the catalyst to move sterling back above 1.40 in the coming weeks,” said Commonwealth Bank of Australia analyst Kim Mundy.

Elsewhere cryptocurrency ether powered to another record peak, this time nearing $3,500 as speculators drive white-hot crypto markets higher. It last sat at $3,373.

 

(Reporting by Tom Westbrook; Editing by Shri Navaratnam)

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Economic Data Puts the Loonie and the Greenback in Focus

Earlier in the Day:

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

Later this morning, the RBA is also in action. With the markets expecting the RBA to stand pat, the rate statement will be key.

For the Aussie Dollar

In March, the trade surplus narrowed from A$7.529bn to A$5.574bn. Economists had forecast a widening to A$8.000bn.

According to ABS,

  • Goods and services credits fell A$681m (-2%) to A$38,274m.
    • An A$708m fall in the export of non-monetary gold contributed to the fall in total exports.
    • Rural goods exports saw a modest A$28m fall, while the exports of general merchandise rose by A$128m.
    • Total services credits also weighed, falling by A$101m.
  • Imports rose by A$1,340m (4%) to A$32,700m.
    • General merchandise debits jumped by A$790m, with non-monetary gold imports up A$529m.
    • There were also increases in the imports of consumer goods (A$147m), capital goods (A$309m), and intermediate and other merchandise goods (A$334m).

The Aussie Dollar moved from $0.7745 to $0.77434 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.26% to $0.7743.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.17% to ¥109.25 against the U.S Dollar, with the Kiwi Dollar down by 0.21% to $0.7186.

The Day Ahead:

For the EUR

It’s a quiet day ahead on the economic data front. There are no material stats due out of the Eurozone to provide  to provide the EUR with direction.

The lack of stats will leave the EUR in the hands of market risk sentiment on the day. Following disappointing GDP numbers from last week, the EUR could come under more scrutiny with little else to consider.

At the time of writing, the EUR was down by 0.13% to $1.2048.

For the Pound

It’s a quiet day ahead on the economic calendar. April’s finalized Manufacturing PMI is due out later today.

Barring a marked revision from prelim figures, however, the numbers should have a muted impact on the Pound.

With the UK economy continuing to open up, market optimism should continue to support the Pound at current levels ahead of the BoE policy decision on Thursday.

At the time of writing, the Pound was down by 0.20% to $1.3883.

Across the Pond

It’s a quieter day ahead on the economic calendar. March trade data and factory orders are due out later today.

While trade data will be of interest, factory orders will have the greatest influence on market risk sentiment.

At the time of writing, the Dollar Spot Index was up by 0.16% to 91.091.

For the Loonie

It’s a relatively busy day ahead on the economic calendar. Building permit figures and trade data are due out later today.

Expect the trade data to have the greatest impact on the Loonie. With the BoC’s shift in policy outlook, a marked widening in the trade surplus would deliver the Loonie with another boost.

At the time of writing, the Loonie was down by 0.12% to C$1.2294 against the U.S Dollar.

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