USD/JPY Price Forecast – US Dollar Rallies Heading Towards Jobs Figure

The US dollar initially pulled back slightly during the course of the trading session on Thursday but then turned around to show signs of strength as we reached towards the ¥109.50 level yet again. At this point, it looks as if we are trying to go looking towards the ¥110 level. Keep in mind that Friday is the Non-Farm Payroll announcement, and that of course is going to continue to be influential as to where we go. Ultimately, this is a bullish run and we recently bounced from the 50 day EMA as well as the 38.2% Fibonacci retracement level that of course is a very positive sign.

USD/JPY Video 07.05.21

If we can break above the ¥110 level, then it is likely that we go looking towards the ¥111 level, which was the recent high. If we can break there, then we have a much longer term run higher. On the other hand, we could very well go back and forth in this general vicinity and simply grind. All things been equal, I have no interest in shorting this market until we break down below those hammers that caused the bounce in the first place. In general, this is a market that is very strong, but certainly will be waiting to see what the jobs number has to say. I would anticipate quite a bit of volatility during the trading session on Friday, as the market will probably have to readjust its expectations depending on whatever number comes out. There are wide and varied expectations for the figure coming out, so I anticipate more chaos than anything else.

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

USD/JPY Forex Technical Analysis – Consolidating Inside 109.223 – 109.634 Ahead of Friday’s US Jobs Report

The Dollar/Yen is edging higher on Thursday while consolidating for a third session ahead of a key U.S. jobs report that may provide clues on when the Federal Reserve will dial back monetary stimulus. This follows weakness on Wednesday that was fueled by a dip in U.S. Treasury yields.

U.S. Treasury yields held steady on Wednesday after private payrolls data showed employers continued to add positions back at a steady clip during the month of April.

At 08:04 GMT, the USD/JPY is trading 109.364, up 0.167 or +0.15%.

Private jobs growth accelerated in April but fell a bit short of lofty Wall Street expectations, according to a report Wednesday from ADP. Additionally, the ISM Services PMI report came in at 62.7, down from the previously reported 63.7 and below the 64.2 forecast.

In other news, Bank of Japan (BOJ) policymakers agreed on the need to focus on keeping interest rates stably low while the economy remains under the strain caused by the COVID-19 pandemic, minutes of the central bank’s meeting showed on Thursday.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, but momentum is trending higher. The USD/JPY was in the midst of a six-session counter-trend rally when a closing price reversal top on Monday stopped the move cold.

A trade through 109.698 will negate the closing price reversal top and signal a resumption of the counter-trend rally.

The main tend changes to up on a trade through 110.966. A move through 107.479 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through 109.698 will signal a resumption of the uptrend. The minor trend will change to down on a move through 108.435.

The short-term range is 110.966 to 107.479. Its retracement zone at 109.223 to 109.634 is currently being tested.

Minor range support is a pair of 50% levels at 108.720 and 108.589. They are followed by a major Fibonacci level at 108.230.

Daily Swing Chart Technical Forecast

The direction of the USD/JPY on Thursday is likely to be determined by trader reaction to 109.223.

Bullish Scenario

A sustained move over 109.223 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into 109.634, followed by 109.698.

Bearish Scenario

A sustained move under 109.223 will signal the presence of sellers. This is a potential trigger point for an acceleration to the downside with 108.720 the next potential downside target.

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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USD/JPY Price Forecast – US Dollar Continues to Levitate Against Yen

The US dollar has gone back and forth against the Japanese yen during trading on Wednesday as we continue to see this market hang around the ¥109.50 level. This is an area where we could see a bit more selling pressure, and the fact that we have the jobs number coming out on Friday will probably continue to cause quite a bit of noise in this market. With that being the case, I think it is only a matter of time before we have to make a bigger move, and the most obvious target above would probably be near the ¥110 level. The ¥110 level has been resistive previously, but we have even broken above there to go towards the ¥111 level, which is my longer-term target if we continue to see upward pressure.

USD/JPY Video 06.05.21

That being said, I do not know that we get a huge move between now and Friday when we get the jobs number. Quite frankly, I think it is going to be difficult to make a big move between now and then, and with that being said I think what we are looking at is a lot of back and forth choppy behavior between now and then. With that in mind, I am somewhat neutral on this pair for the next couple of days, but I recognize that the 50 day EMA underneath could be a target if we do get a selloff, as it should offer support. On the other hand, if we break above the highs of the Monday session, then we will probably go looking towards ¥110, but that is not a very big move.

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/JPY Price Forecast – US Dollar Continues to Run Into Resistance

The US dollar has initially tried to rally during the trading session on Tuesday but found resistance again as we gave up early gains. The ¥109.50 level continues to be an area that a lot of people will be paying close attention to, as it has offered resistance a couple of times now. If we can break above the high of the Monday session, that opens up the possibility of a move to the ¥110 level, but quite frankly we need to see some momentum come back into the market. As things stand now, it certainly looks as if the market is going to continue to see a lot of volatility but at the end of the day as things stand right now it is starting to look like we are making a “lower high.”

USD/JPY Video 05.05.21

I am not ready to call this a reversal again, but if we get some type of impulsive candlestick, that will sell me the idea of going one direction or the other. I believe at this point we are simply sitting around this area trying to figure out where the next move is, and it should show itself rather soon. At this point in time, the market is likely to see a bit of grinding back and forth in order to figure out where we are going longer term. In the short term, it is probably best to simply observe this market as it is obviously at some type of inflection point. At this juncture, I am simply observing but I do believe that we should have a much clearer signal towards the end of the week as we get the jobs figure.

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

USD/JPY Fundamental Daily Forecast – Bulls Hoping for Hawkish Tone from Fed Speakers

The Dollar/Yen is trading higher on Tuesday after posting a dramatic technical closing price reversal top the previous session. Volatility could be highlighted for a second session as Japan remains on a bank holiday and thin trading conditions could lead to a second day of volatile price action. Helping to fuel some of today’s early strength, is a slight rise in U.S. Treasury yields.

At 10:21 GMT, the USD/JPY is trading 109.442, up 0.367 or +0.34%.

The U.S. Dollar is moving higher against the Japanese Yen early Tuesday as investors weigh whether a roaring U.S. economic recovery may force interest rates higher and are looking to upcoming economic data and policy speeches for clues.

Monday Recap

The USD/JPY reversed an earlier rally on Monday as Treasury yields dropped 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 details 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.

U.S. manufacturing activity grew at a slower pace in April, constrained by shortages of supplies as surge in COVID-19 vaccines and massive fiscal stimulus unleashed stifled demand.

The ISM index of national manufacturing activity fell to a reading of 60.7 last month after rising to 64.7 in March, which was the highest level since December 1983. Economists polled by Reuters had predicted that the index would rise to 65 in April.

Daily Forecast

We’re looking for the volatility to continue partly due to the bank holiday in Japan, and Friday’s U.S. Non-Farm Payrolls report that is expected to show job creation continues to be strong.

If the jobs report comes in stronger than expected, then look for the market to start moving toward the idea that the Fed could move on policy sooner than projected in last week’s monetary policy statement.

The comments from several Fed speakers this week could also have an impact on the Dollar/Yen because of signs of division.

As mentioned earlier, New York Fed President John Williams that the recovery so far is “not nearly enough” to prompt monetary policy tightening.

But on Friday, Dallas Fed President caused a stir 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 Kapan 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.”

It may be too early for hawkish Fed speakers to fuel a rally, but not too soon to slow down the selling pressure.

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

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.

May 4th 2021: USD on the Backfoot Amid Disappointing Data; DXY Beneath 91.00

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:

The 200-day simple moving average at 1.1937 serves as dynamic support, in the event of a push southbound.

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 movement, last week’s withdrawal from 69.00 took the indicator to within striking distance of support at 51.36.

H4 timeframe:

Europe’s single currency, as can be seen from the H4 chart, eked out modest gains against the US dollar on Monday, leaving 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—unchallenged.

As for risk events, the calendar was somewhat thin. Though according to the Institute for Supply Management (ISM), US manufacturing grew at a slower pace in April (60.7 vs. consensus estimate 65.0).

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

H1 timeframe:

Monday discovered a floor just north of the 1.20 figure, a level stationed above another layer of support at 1.1989 (prior Quasimodo resistance). The bullish stance subsequently elevated EUR/USD to within a whisker of supply at 1.2091-1.2077—houses the 100-period simple moving average at 1.2083. Also of technical relevance is the 1.21 figure located just above current supply.

From the RSI oscillator, we can see the value climbed from oversold space, reclaimed resistance at 35.45 and engulfed the 50.00 centreline. This suggests further upside momentum could be on the cards, with RSI (overbought) resistance arranged at 78.97.

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 1.1937 (daily timeframe).

Shorter-term action, however, has H1 facing supply at 1.2091-1.2077, the 100-period simple moving average and the 1.21 figure as a potential ceiling. This area also brings with it additional fuel in the shape of H4 resistance nearby at 1.2108 and, therefore, could ignite a bearish scenario.

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:

Since mid-April, AUD/USD has been seen 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. North of here, traders are also urged to pencil in trendline resistance, drawn from the high 80.12.

H4 timeframe:

The consolidation visible on the daily scale also dominates the H4, as buyers and sellers square off between 0.7800 Quasimodo resistance and 0.7696-0.7715 demand (blends with trendline support, taken from the low 0.7531).

Should price rupture the noted demand, a Fibonacci cluster between 0.7657 and 0.7672, is seen lying in wait, while demand-turned supply at 0.7848-0.7867 calls for attention north of 0.7800.

H1 timeframe:

Amidst a bout of USD weakness Monday, EUR/USD lifted above resistance at 0.7752 and the 100-period simple moving average at 0.7757, with price action subsequently retesting 0.7752 as support and forming a dragonfly doji candle—bullish signal.

Quasimodo resistance is plotted overhead at 0.7777, with further outperformance casting focus towards the 0.78 figure (also represents H4 Quasimodo resistance).

With respect to momentum, as measured by the RSI, the value recorded a mild top, a stone’s throw from overbought territory.

Observed levels:

0.7800 Quasimodo resistance on the H4 is likely to attract technical attention. Not only does the level represent a psychological base (applied to the H1), 0.7800 aligns closely with daily resistance at 0.7817.

Short-term flow, on the other hand, shows that scaling higher could also be on the table. The retest of H1 support at 0.7752, and nearby 100-period simple moving average, may have intraday bulls take aim at H1 Quasimodo resistance at 0.7777, followed then by the noted 0.78 neighbourhood.

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:

Partly modified from previous analysis.

Despite the monthly timeframe chalking up possible supportive structure, the daily timeframe watched price establish a half-hearted shooting star pattern on Monday—bearish candlestick signal—from supply pinned at 109.97-109.18. As you can see, the bearish formation also snapped a two-day winning streak.

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 engaging resistance at 57.00.

H4 timeframe:

61.8% Fib resistance at 109.60—located under supply at 109.97-109.72—provided a platform for sellers to work with on Monday. This rejuvenated a bearish presence and pencilled in a retreat back to support at 108.99, which, for now, holds.

Space south of 108.99 shines light back on support at 108.50 and neighbouring demand from 108.20-108.43.

H1 timeframe:

Monday’s bearish narrative shaped clear-cut supply at 109.52-109.39—a decision point to break the 109.26 low and trendline support, pencilled in from the low 107.64. Ensuing action observed a 109 test, a level accompanied by the 100-period simple moving average at 108.99.

The lack of buyer intent from 109 unearths potential selling, targeting another trendline support, taken from the low 107.47.

The view from within the RSI has the value attempting to discover support around the 40.00 region. Dipping a toe in oversold waters, however, highlights support from 18.76.

Observed levels:

Though 109 has so far failed to stir much bullish curiosity on the H1, the psychological base still echoes strength, technically speaking, as it joins hands with the 100-period simple moving average, H4 support at 108.99, and also seeing monthly price defending the descending resistance-turned possible support.

H1 failing to hold 109, however, could see a short-term dip to trendline support, taken from the low 107.47, a move that may also stir dip-buying activity.

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:

Partly modified 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. Should sellers fail to find grip from the aforementioned resistance, technicians are likely to watch Quasimodo resistance at 1.4007.

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).

H1 timeframe:

Launching above 1.39 and the 100-period simple moving average on Monday guided H1 candles to neighbouring resistance at 1.3929 and put a cap on intraday gains.

The reaction from 1.3929 witnessed price retreat to within a pip of 1.39 and the 100-period simple moving average. Interestingly, a bullish showing north of 1.39, movement that scales 1.3929, unlocks the possibility of reaching as far north as the 1.40 figure.

From the RSI, we can see the indicator recently forged hidden bearish divergence at overbought territory, with the value settling Monday around the 60.00 region.

Observed levels:

1.39 buyers (H1) face H1 resistance at 1.3929 and H4 resistance at 1.3919. Buyers finding acceptance above the aforesaid resistances brings light to a potential bullish wave towards the 1.40 resistance area (1.40 figure [H1], H4 Quasimodo resistance at 1.4007 and daily resistance at 1.4003).

1.39 giving way, nonetheless, may spark a short-term bearish scenario, targeting at least H1 support at 1.3864.

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/JPY Price Forecast – US Dollar Gives Up Early Gains

The US dollar has initially rally during the trading session on Monday but gave back the gains early in the day. That being said, the market certainly looks as if it is trying to recover the massive amount of bullish pressure it had previously, and as long as we stay above the ¥108.50 level, we should continue to go powering towards the ¥110 level. The ¥110 level of course is a large, round, psychologically significant figure that a lot of people will pay close attention to and breaking above that will probably bring more money into the fold. At that point, I would be looking at this market through the prism of expecting a move towards the ¥111 level which was the most recent high.

USD/JPY Video 04.05.21

Looking at this chart, it does look like the market had gotten far too ahead of itself, so the question now is whether or not it can continue to see that momentum build? I think that is a bit of an open question at this point, but clearly it is worth paying close attention to as the US dollar is moving quite drastically against the yen itself, and of course the yen has been getting pounded against almost everything. If that continues, then by extension this market should continue to go higher as well. With all of this, I think the only thing you can probably count on is going to be a lot of noisy and choppy behavior, but that is not necessarily uncommon for this pair.

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

The Dollar Consolidates Pre-Weekend Advance

The UK holds local elections, and the US and Canada report employment data at the end of the week. In addition, the earnings season continues, while the US will also announce details of its quarterly refunding plans. Several markets are closed for holidays, including China and Japan (through Wednesday). UK markets are closed for a bank holiday.

After falling 1.15% last week, the MSCI Asia Pacific Index traded heavily today, with only Australia and New Zealand bucking move. Europe’s Dow Jones Stoxx 600 fell for the second consecutive week to the end of April and is struggling to sustain early upticks today. US S&P and Dow futures are trading higher, but the NASDAQ was nearly flat after a mixed performance last week. European benchmark 10-year yields are 1-2 bp firmer.

The US 10-year yield begins the new week around 1.63%. The dollar, which rose sharply ahead of the weekend is narrowly mixed today. Sterling and the Swedish krona are leading European currencies higher, while the yen, and to a lesser extent, the Canadian dollar, are nursing losses. Similarly, among emerging market currencies, eastern and central European currencies are mostly firmer, while Asian currencies are mostly lower, led by a 1% loss of the South Korean won.

The JP Morgan Emerging Market Currency Index is little changed after losing 1% in the last two sessions. Gold is consolidating in last Thursday’s range (~$1756-$1790) and is slightly firmer. Oil prices have slipped lower. Last week, June, WTI tested $65.50 and found support in the $62.90-$63.00 area.

Asia Pacific

Australia reported a small upward revision in April’s manufacturing PMI and a further gain in house prices. The PMI edged up to 59.7 from the preliminary estimate of 59.6 and 56.8 in March. The average in Q1 was 57.0. The rise in house prices is becoming a greater concern to policymakers (in New Zealand and Canada). Prices rose by 1.8% in April after a 2.8% rise in March. Prices have risen steadily since the middle of last year. The average monthly gain over the past six months is 1.5%, while over the past three months, the average has accelerated to 2.2% a month. Tomorrow it reports March trade figures ahead of the central bank meeting.

South Korea is integrated into global supply chains, making its trade figures reported ahead of most other countries a lead indicator. Its April trade figures were released over the weekend, and the 41.1% jump in exports from a year ago exaggerates the strong recovery that is, in fact, taking place. There were two additional working days, which, if adjusted for, still lifted South Korean exports by almost 29.5%.

The second distortion comes from the base effect. The 25.6% year-over-year decline in April 2020 made for a low base. Nevertheless, the takeaway is that the South Korean economy, which returned to its pre-pandemic peak in Q1, is continuing to expand. Exports are averaging about $2.2 bln a day this year. Shipments of semiconductor chips rose by a little more than 30%, and auto exports rose by almost 73.5% from year-ago levels.

Rising South Korean exports to its major trading partners, including China, the US, EU, ASEAN, and Japan, underscore that the global recovery is accelerating. South Korean imports also surged. The nearly 34% year-over-year increase is exaggerated for the same reason imports were flattered. Three forces appear evident. First, South Korea is embarking on a capex cycle for semiconductor chips. Fabrication equipment imports soared by nearly 135%.

Second, importing intermediate goods and components, like display panels, will be used as inputs for exports. Third, the 25% increase in consumer goods imports speaks to the strength of the domestic economy.

The dollar is rising against the yen for the fifth session in the past six again. It reached JPY109.70, its highest levels since April 13, and has met the (61.8%) retracement objective of the decline since peaking near JPY111.00 at the end of March. The JPY110.00-JPY110.10 is the next hurdle. Support is building near JPY109.20.

The Australian dollar retreated from $0.7800 and dipped below $0.7700 at the end of last week. It consolidating in quiet turnover at the lower end of the pre-weekend range. The nearby cap is seen around $0.7740. With Chinese markets closed, the offshore yuan (CNH) weakened for the second consecutive session. It is the first back-to-back decline in three weeks and appears to simply reflect the better tone of the US dollar. The dollar closed at about CNY6.4750 and is trading around CNH6.4760.

Europe

While the final manufacturing PMI was a bit disappointing, the real takeaway is that the eurozone economy is recovering from the Q1 contraction. Moreover, claims about a double-dip recession that the Financial Times called out in a headline are misleading. It is hard to say that it truly recovered from the “first” one. And recall, there is no fixed definition of a recession. Europe’s seven-day vaccination average has surpassed the US and is still accelerating. In the US, nearly all adults who want a vaccine have gotten at least one jab.

EMU’s April manufacturing PMI stands at 62.9 rather than 63.3 of the preliminary estimate and 62.5 in March. It was at 55.2 at the end of last year—slower supply deliveries, which are how the supply chain bottlenecks are expressed with rising prices. German and French flash readings were shaved, and although Italy and Spain showed improvement, it was not quite as much as economists anticipated.

Although last week’s release of Q1 GDP figures takes away some of the interest in the high-frequency data from March, German retail sales were stellar. March retail sales soared by 7.7%, more than twice the median forecast in the Bloomberg survey. Moreover, the February series was revised to show a 2.7% gain instead of 1.2%.

European negotiators appear more restrained than Iranians about the prospect of a deal on the nuclear accord. Separately, Iran’s state television claimed a deal was struck–prisoner swap with the US and UK and as much as $7 bln in funds, which the US quickly denied. Getting the US and Iran back into compliance with the 2015 agreement has ramifications not just for Iran, which apparently has been hit hard by the pandemic, but also for the oil market.

Already, last month, Iranian output is believed to have risen by 200k barrels per day to around 2.5 mln, which would be the largest increase in OPEC. Iran and several small producers were exempt from the OPEC+ output cuts, which are now being slowly reversed. Iran’s capacity is estimated to be a bit higher than 3.5 mln barrels per day, but it needs around 1.2-1.5 mln bpd for its domestic consumption. Estimates suggest Iran has around 70 mln barrels in floating storage. A deal is thought necessary before the end of this month, ahead of the June 18 Iranian elections.

Russia may be withdrawing its forces that had massed on the Ukraine border, but relations with Central and Eastern Europe are the most strained since the annexation of Crimea in 2014. Whatever goodwill Putin sought through is vaccine diplomacy has been undermined its aggressive behavior. Bulgaria and the Czech Republic believe Moscow was behind explosions in arms depots and the 2016 poisoning of an arms dealer.

They expelled some Russian diplomats, and Moscow retaliated in kind, and Prague kicked out more. Of particular note, Lithuania and Slovakia moved in sympathy and also expelled Russian diplomats. There arguably is a lost opportunity for the UK. Eastern and Central European were natural allies for the British on various issues, including a harder line toward Russia. Meanwhile, the Greens, whose fortunes in Germany are rising as the center (CDU/CSU and the SPD) continues to lose support, seems to also take a harder line against Russia (and China).

The euro initially extended its pre-weekend drop but has subsequently rebounded from a little below $1.2015 to about $1.2055 in the European morning. The intraday technicals are stretched, and the $1.2065-$1.2080 area offers a nearby cap. Similarly, sterling successfully tested $1.3800, where a large option (~GBP845 mln) expires tomorrow. It has recovered to around $1.3860, which stretched the intraday momentum indicators.

Resistance is seen in the $1.3860-$1.3880 area. Separately, we note despite a slightly smaller increase than expected in Turkey’s April CPI (17.14% year-over-year from 16.19% in March, and 17.3% median forecast in Bloomberg’s survey), there is little chance that the central bank will cut rates this week. Last week, it raised this year’s inflation forecast. Yet, the drop in the manufacturing PMI (50.4 from 52.6) illustrates how the high rates and pandemic are weighing on the economy. The dollar has traded on both sides of its pre-weekend range against the lira and is firm in the European morning around TRY8.30.

America

The US has a packed economic diary this week, with the April employment report at the end of the week, the highlight. Another gain of around a million jobs is expected. Today features the final April manufacturing PMI report and the initial ISM manufacturing index, and the economists in Bloomberg’s survey look for a 60k jump in manufacturing jobs last month.

The preliminary look at Q1 GDP last week gives good reason to expect a sharp recovery in construction spending in March after a 0.8%, weather-induced decline in February. April auto sales will trickle in over the course of the North American session. Recall that in March, they jumped to a 17.75 mln seasonally adjusted annual rate. It was the most since December 2017. It may be difficult to have sustained that level in April.

Canada sees its manufacturing PMI today, but the Canadian dollar does not seem particularly sensitive to this report. The March merchandise trade balance is out tomorrow, but the week’s highlight is the employment report at the end of the week. In March, Canada grew a dramatic 303k jobs. The risk is of a weaker report. Note that the better part of three rate hikes has been discounted over the next two years.

Mexico reports its PMIs today, but the focus may be on March worker remittances after President AMLO tipped a record of $4.128 bln. Last year, worker remittances were a greater source of capital inflows than Mexico’s trade surplus ($40.6 bln vs. $34.5 bln). The highlight of the week, though, maybe the CPI report and another gain will solidify ideas that its rate cycle is over. Brazil has a full economic diary, including what is expected to be a record trade surplus. Still, little will distract the market from Wednesday’s central bank meeting, which is expected to signal another 75 bp rate hike.

The US dollar has carved out a small shelf against the Canadian dollar in the CAD1.2265-CAD1.2275 range. Initial resistance near CAD1.2320 has already been tested. A break of it could see the greenback firm to around CAD1.2400. Meanwhile, the dollar is extended last week’s 2.1% gain against the Mexican peso that halted a four-week slide. Today’s high near MXN21.3150 is the best level of the US dollar since early April. The next technical target is a little above MXN21.37. At the end of last week, the dollar jumped 1.8% against the Brazilian real to around BRL5.4450. A move above there will target the BRL5.49 area.

This article was written by Marc Chandler, MarctoMarket.

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

A Busy Economic Calendar Puts the EUR and the Dollar in Focus

Earlier in the Day:

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

For the Aussie Dollar

In April, the AIG Manufacturing Index rose from 59.9 to 61.7.

According to the AIG report,

  • April’s PMI hit the highest level since Mar-2018 and the third highest under the current format of the report.
  • All six manufacturing sectors expanded, as did all seven activity indicators.
  • Australia’s capacity utilization index hit a record high, suggesting a need for increased employment and / or investment.

The Aussie Dollar moved from $0.77167 to $0.77170 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.10% to $0.7724.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.21% to ¥109.54 against the U.S Dollar, with the Kiwi Dollar up by 0.18% to $0.7175.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic data front. Manufacturing PMI figures for Italy and Spain and finalized PMIs for France, Germany, and the Eurozone are due out.

German retail sales figures will also be in focus ahead of the PMI numbers.

Barring marked revision to prelim figures, Italy and the Eurozone’s manufacturing PMIs and German retail sales will be key.

At the time of writing, the EUR was up by 0.01% to $1.2021.

For the Pound

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

There are no material stats to provide the Pound with direction, with the UK markets closed.

At the time of writing, the Pound was up by 0.01% to $1.3824.

Across the Pond

It’s a busy day ahead on the economic calendar. The market’s favored ISM Manufacturing PMI figures for April are due out. Finalized Markit survey manufacturing PMI figures are also due out though we would expect the ISM number to be key.

Late in the day, FED Chair Powell is also scheduled to speak. Expect any deviation from the recent guidance to influence.

At the time of writing, the Dollar Spot Index was up by 0.02% to 91.298.

For the Loonie

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

Expect Manufacturing PMI numbers and COVID-19 news updates to influence.

At the time of writing, the Loonie was up by 0.09% to C$1.2295 against the U.S Dollar.

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

The Dollar can Build on the Pre-Weekend Gains

The Japanese yen was a notable exception. The rise in US yields helped lift the greenback nearly a percent against the yen. The Fed’s standpat stance in light of the surging economy and signals the Norwegian central bank and the Bank of Canada seemed dovish. The contrast carried the Norwegian krone and Canadian dollar to new three-year highs last week. Even if the greenback’s pre-weekend advance was exaggerated, it looks to be turning after trending lower in April.

The Federal Reserve’s broad trade-weighted nominal dollar index fell by about 7.5% in the last three quarters of 2020 after rising by 4.6% in Q1 as the pandemic struck and the dollar was bought partly as a safe haven. In addition, it was partly a function of unwinding structured positions that used the greenback as a funding currency. It gained 1.3% in Q1 21 but traded with a heavier bias in April and surrendered most of the Q1 gains, falling over 1%. Moreover, the technical indicators for the dollar have been stretched by its persistent decline in recent weeks. Frequently, it seems that the short-term trends in the dollar are reversed or consolidated around the US employment data. The April report is released on May 7, and another strong report is anticipated.

Our broad macro view is that given the large US fiscal and trade deficit (the March goods balance reported last week widened to a new record high deficit of a little more than $90 bln) requires higher yields or a weaker dollar, or some combination thereof. The fact that the US 10-year yield rose nearly 83 bp in Q1 and the dollar strengthened, and the yield fell in April, and so did the dollar is not coincidentally. We do not want to overstate the link between exchange rate and yields. The long-term relationship does not appear linear but cyclical. However, when trying to discern the recent broad trend, the foreign exchange market seems particularly sensitive to US rates.

Dollar Index

The Dollar Index fell by about 2.5% in April, essentially unwinding the March gain. The pre-weekend advance, helped apparently by month-end position adjustments, was the most since early March. Tentative support was found near 90.40. The MACD looks poised to turn higher, but the Slow Stochastic has flatlined in the overextended territory. The close above 91.15 may help stabilize the tone. To signal a correction to April, the 91.55 area may be overcome. Above there, 92.00 comes back into view.

Euro

The dovish Fed lifted the euro to $1.2150, its highest level since the end of February. Sellers greeted it and pushed it back to around $1.2015 ahead of the weekend. The move seemed exaggerated by month-end adjustments. Follow-through selling will likely test support is likely in the $1.1980-$1.2000 area. The momentum indicators are stalling. In the near term, we are more inclined to sell into strength than buy dips. Three-month euro volatility (implied) slipped below 5.5% before the weekend, its lowest level since March 2020, but closed near session highs.

Japanese Yen

The dollar bounced smartly against the yen last week. It had finished the previous week below JPY108, but the rise in US yields seemed to fuel the greenback’s recovery. After falling in nine of the past ten sessions, the dollar rose at the beginning of last week and recorded higher highs until consolidating ahead of the weekend and month-end. The MACD and Slow Stochastics have turned up, suggesting the dollar’s recovery will continue.

The dollar rose above JPY109.30 before the weekend to push and closed above the (50%) retracement of April’s decline. The next retracement target (61.8%) is near JPY109.65, and then the JPY110 level beckons. Implied vol trended lower in April alongside the dollar. The dollar’s recovery is likely to see higher implied vol, which at a little below 6%, is also near its 20-day moving average.

British Pound

A five-day advance rally was halted before the weekend as it pulled back and slipped below the 20-day moving average (~$1.3850). Once again, the market was reluctant to push it above $1.40. Sterling has not closed above that threshold since the end of February, though it has flirted with it several times. The pre-weekend drop succeeded in turning sterling lower for the week after threatening to extend its weekly advance to three. The momentum indicators stalled. Many observers see the local elections, and the election in Scotland, in particular, as a risk to sterling.

On the other hand, the Bank of England is expected to be upbeat as the fiscal stimulus and vaccine will spur a recovery sooner and stronger than previously projected. If $1.40 is the upper end of the range, then the $1.3670 area has been the lower end of the range. Initial support is seen around $1.3800. Three-month sterling vol fell below 7% last week to make a marginal new low since last March.

Canadian Dollar

The Canadian dollar was easily the strongest currency last week, gaining 1.5% against its US counterpart. It the fourth consecutive weekly advance, and it was the biggest of the year. The central bank has begun tapering, rising commodity prices is seen as constructive, and its 1.6% expansion in Q1 matches the US. However, a note of caution is generated as the US dollar closed below the lower Bollinger Band every day last week and finished the week on its lows. Another note of caution comes from the market that may be getting ahead of itself as it prices in three rate hikes by the end of 2023.

The momentum indicators are still falling, and the Slow Stochastic is stretched, and the US dollar still made new three-year lows ahead of the weekend. Initial resistance is seen near CAD1.2335 and then CAD1.2400. The low from 2018 is about CAD1.2250, and below there, chart support is sparse until the 2017 low of almost CAD1.2060. Implied volatility has begun rising. It had briefly fallen below 6% near-mid April, its lowest level since last July, but finished above 6.5%.

Australian Dollar

Rising commodity prices, including industrial metals, and a dovish Federal Reserve failed to sustain an Aussie rally above $0.7800. While it flirts and penetrates it on an intraday basis, it has failed to close above it since the end of February. Indeed, it finished the week close at its lowest level in about two and a half weeks, a tad above $0.7700, briefly dipping below it in a thin NY Friday afternoon. The momentum indicators a mixed. The Aussie spent April mostly in the $0.7600-$0.7800 range and largely above $0.7700 since mid-monthly. A break warns of a return to the lower end of the range.

The RBA meets on May 5 in Sydney. It may be a bit early for it to signal that it too wants to pull back from its extraordinary monetary support, but it seems like a good candidate for later Q3. The central bank will publish new economic projections at the end of the week, ahead of the government’s budget announcement the following week. Three-month vol is trading in its trough below 9.0%. It reached 8.75% last week, its lowest level since last March.

Mexican Peso

The peso had its worst week in a couple of months, falling in four of the five sessions. It snapped a four-week advance with a 2,1% decline, making it the second-worst performing emerging market currency after the Colombian peso (~-2.4%). Higher global interest, including a modest rise in US yields and the prospect of another 75 bp hike in Brazil in the week ahead, encouraged some profit-taking.

News of a large and unexpected trade deficit ($3 bln in March) was not helpful, but the surprising expansion in Q1 (0.4% quarter-over-quarter GDP) did not prevent the peso from extending its losses. The US dollar finished the week around MXN20.2460, its best level since April 16. The MACD and Slow Stochastic have turned up. It met the (38.2%) retracement objective of the decline since late March high near MXN20.2350. The halfway mark is about MXN20.3730.

Chinese Yuan

The broad dollar gains ahead of the weekend halted the yuan’s four-day advance. It was only the second session that the greenback gained over the redback in three weeks. Still, the dollar fell for the fourth consecutive week, which followed a six-week advance. Over the four-week streak, the yuan rose by 1.6%, making it the second strongest currency in the region after the Taiwanese dollar (~2.1%).

If the dollar strengthens in the near term, as it looks likely against a range of currencies, it can return to the CNY6.50 area. The yuan and the euro remain highly correlated. On a purely directional basis, the correlation over the past 30 and 60 days is slightly more than 0.85. The onshore market will be closed the first part of next week to celebrate the May Day holiday.

This article was written by Marc Chandler, MarctoMarket.

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

USD/JPY Fundamental Weekly Forecast – US Non-Farm Payrolls Report Will Be Market Moving Event

The Dollar/Yen rose last week, driven higher by a dovish outlook by the Bank of Japan, stronger-than-expected U.S. economic data and worries over rising COVID-19 cases in Japan. Ultimately, it came down to a rise in yields, which widened the spread between U.S. Government bond yields and Japanese Government bond yields, making the U.S. Dollar a more attractive investment.

Last week, the USD/JPY settled at 109.334, up 1.457 or 1.35%.

Bank of Japan Sees Weak Inflation

The Bank of Japan projected last Tuesday that inflation will fail to reach its 2% target during its governor’s term through early 2023, as fresh curbs to combat a spike in COVID-19 cases overshadow the boost to growth from solid global demand.

While the central bank kept policy steady, Governor Haruhiko Kuroda signaled his readiness to extend a pandemic-relief program beyond the current September deadline, as slow vaccine rollouts and a spike in new virus strains hit retailers.

“If some service sectors remain under strong funding stress, we will of course consider extending the program,” he told a news briefing, warning of uncertainty over the economic outlook.

In a quarterly report released after Tuesday’s rate review, the BOJ revised up its growth forecasts and stuck to its view the world’s third-largest economy would recover as robust U.S. and Chinese demand underpins exports.

But the BOJ cut this year’s price forecast and predicted for the first time that inflation would stay well short of its 2% target beyond Kuroda’s term, which ends in early 2023.

“It’s true that under the current forecasts, inflation won’t reach 2% even in fiscal 2023. That means achievement of our 2% target will be beyond fiscal 2024,” Kuroda said.

Strong US Economic Data Underpins Yields

Investors shrugged off a dovish U.S. Federal Reserve, focusing instead on the strengthening economy.

On Wednesday, the Fed left policy unchanged as expected. Additionally, Fed Chairman Jerome Powell acknowledged the U.S. economy’s growth, but said there was not enough evidence of “substantial further progress” toward recovery to warrant a change to its ultra-loose monetary settings.

Despite the Fed’s dovish tone, U.S. Treasury yields inched higher last week on the back of stronger-than-expected U.S. economic data.

Last week, the U.S. Commerce Department said first-quarter gross domestic product rose 6.4%, versus the 6.5% expected by economists polled by Dow Jones. The Labor Department reported that 553,000 new jobless claims were filed last week, just above the 528,000 estimated by economists.

On Friday, data showed a 4.2% rebound in U.S. consumer spending in March, amid a 21.1% surge in income as households received additional COVID-19 relief money from the government, supported the dollar. That led to a 0.4% rise in the core personal consumption expenditures (PCE) index, compared with a gain of 0.3% the previous month.

Weekly Forecast

With Japan on a bank holiday early in the week and the lack of fresh economic data, the focus for USD/JPY investors will remain on U.S. economic reports and their impact on Treasury yields.

Early in the week, traders will get their cues from the US ISM Manufacturing PMI report. It is expected to come in at 65.0, up from 64.7. The US ISM Services PMI report is expected to rise from 63.7 to 64.2.

The major reports are linked to the labor market. They include the ADP Non-Farm Employment Change, Weekly Unemployment Claims and Friday’s U.S. Non-Farm Payrolls report.

Non-Farm Payrolls are expected to show the economy added 975,000 new jobs in April. This will be up from 916,000 in March. The Unemployment Rate is expected to show a drop from 6.0% to 5.7% and Average Hourly Earnings are expected to have risen from -0.1% to 0.0%.

A stronger-than-expected payrolls number should drive yields sharply higher on the thought that the Fed may have to start seriously considering tapering its bond purchases sooner than expected. This would be bullish for the Dollar/Yen.

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

The Week Ahead – Central Banks, Economic Data, and COVID-19 in Focus

On the Macro

It’s a quieter week ahead on the economic calendar, with 57 stats in focus in the week ending 7th May. In the week prior, 61 stats had been in focus.

For the Dollar:

In the 1st half of the week, private sector PMIs and ADP nonfarm employment change figures are in focus.

Expect the market’s favored ISM Non-Manufacturing PMI and ADP figures to be key.

The focus will then shift to the weekly jobless claim figures on Thursday ahead of the NFP numbers on Friday.

Expect nonfarm payroll figures and the unemployment rate to be the main area of focus late in the week.

On the monetary policy front, FED Chair Powell is scheduled to speak early in the week. The markets will be looking for any break from the script.

In the week, the Dollar ended the week up by 0.46% to 91.280.

For the EUR:

It’s also a busy the week on the economic data front.

Monday through Wednesday, private sector PMIs for Italy and Spain and German retail sales figures are in focus.

While retail sales are key, expect Italy and the Eurozone’s private sector PMIs to be key.

Late in the week, the German economy is back in focus.

German factory orders, industrial production, and trade data are due out. Following some disappointing GDP numbers last week, we can expect EUR sensitivity to the stats.

On the monetary policy front, ECB President Lagarde is due to speak at the end of the week…

The EUR ended the week down by 0.64% to $1.2020.

For the Pound:

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

Finalized private sector PMIs will be in focus in a shortened week.

Expect any revisions to the services PMI to be key.

The main event of the week, however, is the BoE’s monetary policy decision on Thursday.

While the BoE is expected to stand pat, any dissent and hawkish talk give the Pound a boost.

The Pound ended the week down by 0.39% to $1.3822.

For the Loonie:

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

On Tuesday, trade data for March will influence ahead of April employment and Ivey PMI figures on Friday.

Expect the employment figures to be the key driver at the end of the week.

The Loonie ended the week up 1.51% to C$1.2288 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week ahead.

Key stats include manufacturing data at the start of the week and trade data on Tuesday.

Building approvals are also due out on Wednesday but will likely have a muted impact on the Aussie Dollar.

While we can expect the trade data to have the greatest impact, the RBA monetary policy decision is the main event of the week on Tuesday.

Any hawkish chatter and expect the Aussie Dollar to eye a return to $0.80 levels.

The Aussie Dollar ended the week down by 0.30% to $0.7716.

For the Kiwi Dollar:

It’s a relatively quiet week ahead.

On Wednesday, employment figures for the 1st quarter are due out ahead of building consent numbers on Thursday.

Expect the employment change figures to be key in the week. The markets will be looking from a pickup in hiring to support a sustainable economic recovery.

The Kiwi Dollar ended the week down by 0.51% to $0.7162.

For the Japanese Yen:

It is a quiet week ahead, with the Japan markets closed Monday through Wednesday.

Economic data is limited to finalized private sector PMIs for April. Barring any marked revision from prelim figures, however, we don’t expect too much impact on the Yen.

The Japanese Yen rose by 0.85 to ¥107.88 against the U.S Dollar.

Out of China

It’s a busy week ahead.

Through the 1st half of the week, the market’s preferred Caixin survey PMI numbers are due out. Expect the manufacturing PMI for April to have the greatest impact on Tuesday.

At the end of the week, April trade figures will also be in focus.

A continued surge in both imports and exports would support riskier assets.

The Chinese Yuan ended the week up by 0.33% to CNY6.4749 against the U.S Dollar.

Geo-Politics

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

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

Corporate Earnings

While a number of the big names have released earnings results, a large number are still scheduled to release results in the week ahead.

From the U.S, big names include CVS Health Corp (Tues), ICHOR Holdings (Tues), and FOX Corp (Wed).

US Dollar Index Spikes Higher as Major Currencies Give Back Weekly Gains

The U.S. Dollar closed higher last week with all of its gains coming on Friday. The headlines said the rally was fueled by month-end profit-taking, but Treasury yields edged higher for the week and most of the U.S. economic reports beat the forecasts so there may be more to the move than end-of-the-month position-squaring.

The Fed was dovish as expected but this wasn’t news since Fed Chairman Powell and his policymaking colleagues have been telegraphing this for months. Nonetheless, the headliner writers blamed central bank policy for the weakness ahead of Friday.

Last week, the June U.S. Dollar Index settled at 91.270, up 0.431 or +0.47%.

Dollar Index Component Breakdown

Breaking down the week into the Dollar Index’s main components the Euro lost 0.63%, the British Pound fell 0.51% and the Japanese Yen closed 1.35% lower. The Canadian Dollar rose 1.46% and the Swiss Franc was up 0.07%.

The Australian and New Zealand Dollars were down 0.49% and 0.47% for the week, respectively. However, the commodity-linked currencies aren’t a component of the dollar index.

The Euro fell sharply on Friday, erasing all of its weekly gains just one day after reaching its highest level since February 26.

Reuters reported on Friday that the Euro Zone economy dipped into a second technical recession after a smaller than expected contraction in the first quarter, but is now firmly set for a recovery as pandemic curbs are lifted amid accelerating vaccination campaigns, economists said.

The British Pound also wiped out its weekly gains on Friday as investors dumped the Sterling ahead of next week’s Bank of England policy meeting. Few analysts expect major changes to the Bank of England’s policy settings next Thursday, although some see the central bank slowing its bond-buying.

The Japanese Yen was weak against the U.S. Dollar all week as rising Treasury yields helped widen the spread over Japanese Government bond yields, making the U.S. Dollar a more attractive asset.

The Canadian Dollar rose against the greenback in a move that was sparked on Wednesday as investors cheered domestic retail sales data and the Federal Reserve stuck to its dovish stance, trailing the Bank of Canada on moves to reduce emergency support for the economy.

The Fed held interest rates and its monthly bond-buying program steady, nodding to the U.S. economy’s growing strength but giving no sign it was ready to reduce its support for the recovery.

In contrast, the Bank of Canada signaled the prior week it could start hiking rates from their record lows in late 2022 and cut the pace of its bond purchases.

Essentially, Canadian Government bond yields rose faster than U.S. Government bond yields, making the Canadian Dollar a more attractive asset.

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

Weekly Technical Market Insight: 3rd – 7th May 2021

Charts: Trading View

US Dollar Index (Daily Timeframe):

The US dollar, according to the US dollar index (DXY), marched north last week, adding 0.5 percent and snapping a three-week losing streak. The bulk of the weekly ascent emerged on Friday, inspired amidst healthy data on personal income and spending in March, in addition to a positive Chicago PMI print—the highest reading in decades.

The technical framework reveals Friday’s spirited advance—formed just north of trendline support, taken from the low 89.20—elevated the DXY to within touching distance of resistance at 91.36, a prior Quasimodo support level.

Interestingly, the 200-day simple moving average circles above the aforesaid resistance level at 91.98. Additional upside this week, therefore, could have USD bulls confront the SMA (note that moving averages frequently deliver dynamic support and resistance).

Long-term trend studies show the USD has been underwater since topping ahead of 103.00 in March 2020—many analysts likely refer to this downward movement as a primary trend on the daily scale. Also worth highlighting is the 93.43 31st March peak, and subsequent slide in April, which echoes seller strength within the downtrend.

Meanwhile, as measured by the RSI indicator, momentum recently gathered traction to the upside after discovering a bottom ahead of oversold settings. The value settled the week within close proximity of the 50.00 centreline, yet a break here may uncover resistance at 55.67.

  • Despite Friday’s bold moves, the space between the 200-day simple moving average at 91.98 and resistance from 91.36 delivers a potential ceiling to be mindful of this week, strengthened on the back of a clear-cut downtrend since early 2020.

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 breached trendline resistance, taken from the high 1.6038, in July 2020.

Daily timeframe:

A combination of month-end flows and Friday’s healthy USD bid watched Europe’s shared currency decline 0.8 percent against the buck, and finish around session lows.

Leaving Quasimodo resistance at 1.2169 unchallenged, EUR/USD bears have the 200-day simple moving average on the radar this week (1.1935). Technical analysts will note moving averages have a tendency to deliver dynamic support and resistance when tested.

Upside momentum levelled off in the latter part of last week—topping within a whisker of RSI overbought territory—withdrawing back to the 55.00ish range. RSI support at 46.23, therefore, deserves attention this week.

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.

H4 timeframe:

Friday’s one-sided decline landed candle action within a stone’s throw from support at 1.1990. Technical elements also bring light to 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 this week unearths additional support at 1.1937 (aligns closely with the 200-day simple moving average on the daily scale at 1.1935), while a rotation to the upside exposes resistance at 1.2108.

H1 timeframe:

The euro found itself on the backfoot against the greenback heading into US hours on Friday, establishing a supply at 1.2091-1.2077 and dethroning demand coming in from 1.2049-1.2061.

Technically speaking, this could have EUR/USD bump heads with the key figure 1.20 early week.

While the round number is likely a watched base in this market, traders are urged to pencil in the possibility of a whipsaw through the level. Orders are likely to crowd this area, welcoming movement known as a stop run. Bids, assuming heavyweight orders, from both H1 support at 1.1989 (prior Quasimodo resistance) and H4 support between 1.1971 and 1.1990, therefore may welcome the stops (sell orders) beneath 1.20.

In terms of the RSI indicator, the value voyaged deep into oversold territory and came within striking distance of support at 13.07.

Observed levels:

Long term:

April showing some life out of monthly demand from 1.1857-1.1352 reinforces a possible retest (dip-buying scenario) of the 200-day simple moving average at 1.1935 this week.

Short term:

H4 structure reveals support resides between 1.1971 and 1.1990. A test of this area ignites a potential stop run through the 1.20 figure on the H1 timeframe—movement that could motivate a bullish presence back to at least 1.2050ish.

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.

April ended the month higher by 1.5 percent.

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:

Resistance at 0.7817, as you can see, welcomed sellers in the second half of last week, with Friday exacerbating losses amid healthy USD demand and declines observed in major US equity benchmarks (the Australian dollar often reacts to risk moves). Down by 0.7 percent at the close, further downside this week shines the technical spotlight on February’s low at 0.7563.

RSI movement elbowed through trendline support, extended from the low 36.55, as well as nudging marginally under the 50.00 centreline, which suggests increased downside momentum could be on the cards.

H4 timeframe:

Since mid-April, AUD/USD has been busy forging a consolidation between 0.7696-0.7715 demand and Quasimodo resistance at 0.7800.

What’s technically interesting is the unit concluded the week within the walls of the aforementioned demand, shaped by way of a hammer candle pattern (bullish signal). Should price rupture the noted base this week, trendline support, taken from the low 0.7531, and a Fibonacci cluster between 0.7657 and 0.7672, is seen lying in wait.

H1 timeframe:

Bearish forces modestly surpassed 0.77 on Friday and shook hands with a 1.272% Fib projection at 0.7697 (plotted ahead of familiar demand at 0.7679-0.7695). Leaving behind a moderate hammer candle pattern, you will note follow-through buying emerged into the close.

Beneath 0.7679-0.7695, support at 0.7668 is seen (previous Quasimodo resistance), while demand-turned supply at 0.7725-0.7737 is visible overhead, closely followed by resistance at 0.7752.

In conjunction with Friday’s 0.77 test, RSI action dipped a toe in oversold waters and challenged support at 19.40. The RSI value, albeit mildly reacting from the aforesaid support, remained within oversold terrain at the close.

Observed levels:

Long term:

Daily resistance at 0.7817 holding firm last week reflects a bearish climate and, given the room to manoeuvre lower to February’s low at 0.7563 on the daily scale, additional bearish flow may be in the offing this week.

Short term:

0.77 highlighting support Friday—along with H4 action forming a hammer candle pattern within demand at 0.7696-0.7715—could have short-term bulls climb to H1 supply at 0.7725-0.7737 early week.

Alternatively, elbowing through 0.77 and neighbouring H1 demand at 0.7679-0.7695 to test H1 support at 0.7668 (conveniently housed within the H4 Fib cluster at 0.7657-0.7672) could also attract bullish focus.

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:

107.58-106.85 demand—joined by a 38.2% Fib level at 107.73 and trendline support, extended from the low 102.59—sparked decisive recovery gains last week, with enough force to lift the currency pair to supply pinned at 109.97-109.18.

Further outperformance this week casts light towards longer-term supply at 110.94-110.29, stationed just under another supply at 111.73-111.19.

Trend studies show the unit has been trending higher since the beginning of 2021, therefore the recent recovery could be the beginning of a dip-buying scenario.

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

H4 timeframe:

Mid-week trading witnessed support pinned at 108.50 and neighbouring demand from 108.20-108.43 (the decision point to climb 108.50) make a show, which consequently motivated a bullish wave in the second half of the week.

Having navigated through resistance at 108.99 on Friday (now labelled support), an acceleration to the upside shines light on a 61.8% Fib level at 109.60, sheltered beneath supply at 109.97-109.72.

H1 timeframe:

In line with the RSI oscillator marginally exiting overbought space, price action entered into a narrow range heading into US hours on Friday.

The technical framework shifts focus to Quasimodo resistance at 109.44, while a bearish stance draws attention to 109 and trendline support, etched from the low 107.64. Traders will also note that unseating 109.44 perhaps paves the way north to resistance at 109.95 and the 110 figure.

Observed levels:

Long term:

Monthly flow testing descending resistance-turned possible support places a question mark on daily supply at 109.97-109.18 this week. For that reason, bearish action from the aforesaid supply may be short-lived.

Short term:

H1 Quasimodo resistance at 109.44, although the base could trigger mild bearish interest, is likely to surrender, according to chart studies. Not only do we have monthly price showing signs of supportive structure, the H4 scale displays scope to advance at least to the 61.8% Fib level at 109.60 and nearby supply at 109.97-109.72.

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:

Resistance at 1.4003 has proved a stubborn hurdle since March, capping upside attempts on multiple occasions. Friday’s 0.9 percent decline, as you can see, 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:

Friday’s single-sided decline plummeted into 1.3809-1.3832 demand and clipped the lower side of the base. This 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).

H1 timeframe:

Friday ran through a number of key supports, including a trendline formation, extended from the low 1.3668, and cemented a mild bottom a few pips north of the 1.38 figure. Territory south of the aforementioned round number opens chart space to Quasimodo support at 1.3752—plotted just north of the H4 Quasimodo at 1.3750.

RSI support at 12.22, located deep within oversold space, made an appearance on Friday. It’s important to note that although the value responded from the said support, the indicator remained within oversold into the closing bell.

Observed levels:

Long term:

Despite recent hesitation within February’s range, the monthly timeframe shows a trendline resistance breach occurred late 2020. Should the 1.4376 top be engulfed, longer-term buying may become a key theme in this market.

Daily areas to watch this week are Quasimodo support at 1.3609 and resistance at 1.4003

Short term:

H4 demand at 1.3809-1.3832 taking on a mild breach Friday suggests buyers are likely to remain on the ropes in early trade this week, targeting H4 Quasimodo support at 1.3750 and associated Fib studies around 1.3744.

By the same token, therefore, H1 sellers could tunnel through 1.38 and make a run for Quasimodo support at 1.3752.

DISCLAIMER:

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

The Weekly Wrap – Impressive Stats from the U.S Give the Greenback a Much-Needed Boost

The Stats

It was a busier week on the economic calendar, in the week ending 30th April.

A total of 61 stats were monitored, following 46 stats from the week prior.

Of the 61 stats, 30 came in ahead forecasts, with 23 economic indicators coming up short of forecasts. There were 8 stats that were in line with forecasts in the week.

Looking at the numbers, 38 of the stats reflected an upward trend from previous figures. Of the remaining 23 stats, 22 reflected a deterioration from previous.

For the Greenback, a run of 3 consecutive weekly losses came to an end. In the week ending 30th April, the Dollar Spot Index rose by 0.46% to 91.28. In the previous week, the Dollar had fallen by 0.76% to 90.859.

Out of the U.S

It was a busier week on the economic data front.

In the 1st half of the week, core durable goods and consumer confidence figures were in focus.

The stats were skewed to the positive. Core durable goods reversed a 0.3% fall, with a 1.6% rise in March.

More significantly, the CB Consumer Confidence Index jumped from 109.0 to 121.7.

In the 2nd half of the week, GDP, jobless claims, personal spending, and inflation figures were in focus.

The stats were also skewed to the positive, supporting market optimism towards the economic outlook.

In the 1st quarter, the economy expanded by 6.4%, following 4.3% growth in the 4th quarter of last year.

Jobless claims figures were also positive, with initial jobless claims falling from 566k to 553k in the week ending 23rd April.

At the end of the week, personal spending also impressed, jumping by 4.2% to reverse a 1% fall from February.

Inflationary pressures were on the rise, with the FED’s preferred Core PCE Price Index rising by 1.8% in March, year-on-year. In February, the index was up by 1.4%. Following the FED’s assurances from earlier in the week, however, the uptick had a muted impact on the markets.

On the monetary policy front, the FED stood pat on policy, which was in line with expectations. FED Chair Powell continued to reassure the markets that there would be no tapering to the asset purchasing program or shift in interest rates any time soon.

The assurances had left the Greenback on the backfoot in response.

In the equity markets, the Dow and the NASDAQ fell by 0.50% and by 0.39% respectively, while the S&P500 eked out a 0.02% gain.

Out of the UK

It was a particularly quiet week.

There were no material stats to provide the Pound with direction in the week.

The lack of stats left the Pound in the hands of market optimism towards the reopening of the economy.

In the week, the Pound fell by 0.39% to end the week at $1.3822. In the week prior, the Pound had risen by 0.70% to $1.3876.

The FTSE100 ended the week up by 0.45%, partially reversing a 1.15% fall from the previous week.

Out of the Eurozone

It was a busy week on the economic data front.

In the 1st half of the week, German business and consumer confidence waned as a result of the latest spike in new COVID-19 cases.

In the 2nd half of the week, stats were also skewed to the negative weighing on the EUR.

While the French economy managed to avoid a contraction in Q1, both Germany and the Eurozone’s economies contracted.

The contraction was aligned with ECB President Lagarde’s outlook and the latest downward revision to Germany’s economic forecasts.

Inflation for the Eurozone and member states, unemployment figures from Germany and the Eurozone, and French consumer spending figures also drew attention.

Consumer spending hit reverse in France while inflationary pressures picked up in France and across the Eurozone.

Unemployment from Germany disappointed, while the Eurozone’s unemployment rate declined from 8.2% to 8.1%.

For the week, the EUR slipped by 0.64% to $1.2020. In the week prior, the EUR had risen by 1.00% to $1.2097.

The CAC40 rose by 0.18%, while the DAX30 and EuroStoxx600 ended the week down by 0.94% and by 0.34% respectively.

For the Loonie

It was a busier week.

Retail sales figures impressed mid-week, with core retail sales and retail sales both jumping by 4.8% in February. In January, core retail sales had fallen by 1.2% and retail sales by 1.1%.

At the end of the week, February GDP and March RMPI numbers were also in focus.

The economy expanded by a further 0.4%, following 0.7% growth in January. In March, the RMPI rose by 2.3% following a 6.6% jump in February.

Continued market reaction to the previous week’s BoC outlook and policy decision also supported the Loonie.

In the week ending 30th April, the Loonie jumped by 1.51% to C$1.2288. In the week prior, the Loonie had risen by 0.22% to C$1.2476.

Elsewhere

It was a bearish week for the Aussie Dollar and the Kiwi Dollar, with a Friday pullback leaving the pair in the red.

In the week ending 30th April, the Aussie Dollar fell by 0.39% to $0.7716, with the Kiwi Dollar ending the week down by 0.51% to $0.7162.

For the Aussie Dollar

It was a quiet week.

1st quarter inflation and private sector credit figures for March were in focus in the week.

The stats were skewed to the negative, pegging the Aussie back in the week.

In the 1st quarter, the trimmed mean CPI rose by 1.1% year-on-year, its lowest annual movement on record.

Private sector credit figures were positive, however, with both personal and business credit on the rise.

For the Kiwi Dollar

It was also a quiet week.

Trade data and business confidence figures were in focus.

A narrowing of New Zealand’s trade surplus was Kiwi Dollar negative, while a pickup in business confidence provided support late in the week.

The narrowing of New Zealand’s trade surplus came as imports surged at the end of the 1st quarter. Year-on-year, New Zealand’s trade surplus narrowed from NZ$2,380m to NZ$1,690m.

In April, the ANZ Business Confidence Index rose by 6 points from a prelim -8.4 to -2.0.

For the Japanese Yen

It was a busy week.

Mid-week, retail sales figures impressed. In March, retail sales were up by 5.2%, year-on-year. In February, sales had been down by 1.5%.

At the end of the week, industrial production increased by 2.2%, reversing a 1.3% decline from February.

Deflationary pressures picked up in April, however, with Tokyo core consumer prices falling by 0.2%, year-on-year. In March, core consumer prices had fallen by 0.1%.

The Japanese Yen fell by 1.33% to ¥109.31 against the U.S Dollar. In the week prior, the Yen had risen by 0.85% to ¥107.88.

Out of China

It was a quiet week on the data front.

NBS private sector PMIs were in focus at the end of the week. The stats were skewed to the negative, however, with both service and manufacturing sector growth easing in April.

The Manufacturing PMI fell from 51.9 to 51.1, with the Non-Manufacturing PMI falling from 56.3 to 54.9.

In the week ending 30th April, the Chinese Yuan rose by 0.33% to CNY6.4749. In the week prior, the Yuan had risen by 0.37% to CNY6.4963.

The CSI300 slipped by 0.23%, with the Hang Seng ended the week down by 1.22%.