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Jerome Powell said the central bank is not considering cutting back on…

Jerome Powell said the central bank is not considering cutting back on asset purchases that have helped the economy recover from the pandemic

20210429
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Market Focus

An exchange-traded fund tracking the Nasdaq 100 Index jumped in late trading after Apple Inc. crushed revenue estimates and Facebook Inc. reported gains in sales and users. Stocks ended the cash session lower after a back-and-forth day.

The S&P 500 reached a session high after Jerome Powell said the central bank is not considering cutting back on asset purchases that have helped the economy recover from the pandemic. Treasuries rose after the Fed kept interest rates at zero and policymakers strengthened their view of the economy.

Here are three takeaways of Fed Chairman speaking and FOMC statement:

  • Federal Reserve Chair Jerome Powell and his colleagues upgraded their assessment of the U.S. economy but said they were not yet ready to consider scaling back pandemic support.
  • The recovery has been faster than expected but “it remains uneven and far from complete” and the economy “is a long way from our goals.” U.S. central bankers repeated they would not change the pace of bond buying until “substantial further progress”.
  • The statement also noted that sectors hit hardest by the Covid-19 pandemic had “shown improvement.” And on the risk of prices rising, policymakers said: “Inflation has risen, largely reflecting transitory factors.”

Main Pairs Movement

The dollar slid to session lows Wednesday as the Federal Reserve signaled risks to the economy from the coronavirus have abated and left the current pace of asset purchases unchanged. Resource-linked currencies led gains, with the Canadian dollar hitting the highest level since 2018 as a key gauge of commodities touched a fresh almost three-year high.

Among G-10 peers, the Norwegian krone, New Zealand, and Canadian dollars led gains. EUR/USD trading +0.3% at 1.2124 in the day as European Central Bank President Christine Lagarde says the region is probably past the peak of the third wave of coronavirus infections, but there are still downside risks in the near term.

ECB’s response to the crisis has proven efficient; the euro area still needs monetary, fiscal stimulus. ECB is closely watching the exchange rate’s impact on inflation.

Technical Analysis

EURUSD (4 hour Chart)

The Eurodollar has soared up to the highest level; earlier fell as much as 0.3% to 1.2056; since March after Fed left the key rate unchanged, trading at 1.2124 as of writing. For the RSI side, the indicator shows 65 figures, suggesting room for the upward side before tapping into overbought sentiment. On moving average price, 15-long SMA indicator turns positive slope and 60-long SMA indicator retaining an ascending movement.

Therefore, we foresee there still have an upper-space as market sentiment remains a benign bullish momentum. Before optimistic views, we need to eyes on the eurodollar whether could emphatically stand above the 1.2106 level.

Resistance: 1.213, 1.22

Support: 1.2106, 1.199, 1.192

USDJPY (4 Hour Chart)

Japan yen wiped out earlier session gains after Fed’s rate decision and chairman’s dovish statement, trading near day low at 108.618 as of writing. Meantime, 10 years Treasuries yields turn negative territory at 1.611% which once pick up today high 1.664%. For the RSI side, the indicator was close to the neutral area at 55 around which suggests a mixed movement in the forthcoming market. On the other hand, the 60-long SMA indicator holds an opaque movement but the 15-long SMA indicator seems is going to the golden cross with the 60 one.

Continuing our yesterday perspective, we deem market bounced up was too rapidly thence a correction is necessary, yet, for bullish aspect, 108.37 have to be defended. Currently, we expect the market will intend to choppy in a tiny range which between the neckline at 108.37 and first resistance.

Resistance: 108.93, 109.22

Support: 108.37, 107.936

USDCAD (4 Hour Chart)

Loonie finally breakthrough the critical support at 1.238, of course, driven by Fed’s rate decision, trading at 1.23144 nearly all-time low in these 2 years. In the meantime, the Dollar index drops to a nadir of price actions since March. For the moving average side, 15 and 60-long SMAs remaining a descending trend. For the RSI side, the indicator has slipped into the over sought territory at 23 figure, suggesting an over pessimistic at the moment.

To sum up the aforementioned, we expect the loonie will have substantial space for a downward trend as it penetrated 2 years neckline. Therefore, the 1.238 level would be the vital resistance for our perspective.

Resistance: 1.238, 1.246, 1.2491

20210429
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The Nasdaq 100 dropped for the first time in three sessions, weighed…

The Nasdaq 100 dropped for the first time in three sessions, weighed down by declines in tech heavyweights including Tesla Inc. and Alphabet Inc.

20210428
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Market Focus

U.S. technology stocks fell as investors turned their attention to a batch of earnings from industry heavyweights that have helped drive the market to all-time highs.

The Nasdaq 100 dropped for the first time in three sessions, weighed down by declines in tech heavyweights including Tesla Inc. and Alphabet Inc. The S&P 500 closed little changed after swinging between gains and losses throughout the day. United Parcel Service Inc. soared to a record after beating Wall Street’s profit estimates.

Tesla ended a two-day streak of gains after its results failed to impress investors. 3M Co. was the biggest drag on the Dow Jones Industrial Average after it warned that higher costs for raw materials and transportation are a worsening threat. Google parent Alphabet climbed more than 4% post-market, erasing its cash-session decline after profit and revenue exceeded Wall Street’s expectations. Microsoft Corp. reversed again and dropped 3.5% after reporting revenue that missed the highest analysts’ estimates.

While the earnings season has been generally strong so far, investors may be waiting for more robust beats to fan the next move higher. Four out of five S&P 500 companies that have released results have either met or beaten expectations. On average, shares have gained less than 0.1% after the reports, according to data compiled by Bloomberg.

Meanwhile, U.S. data this week are expected to show growth accelerated to an annualized 6.8% in the first quarter. A Conference Board measure Tuesday showed consumer confidence reached the highest since February 2020 as Americans grew more upbeat about the economy and job market.

Main Pairs Movement

The dollar advanced while U.S. 10-year yields touched the highest level in a week as Federal Reserve policymakers began a two-day meeting with a decision Wednesday that may provide insight into their views on tapering asset purchases. The Canadian dollar slipped from the highest level in five weeks as traders await comments Tuesday from the central bank governor.

Among Group-of-10 peers, the Norwegian krone and pound led gains; the Australian and New Zealand dollars were among the laggards. The U.S. 10-year Treasury yield climbed as much as 5.9bps to 1.63%.

The divergence in sentiment for the euro as shown by its volatility skew has reached levels seen only a handful of times in data going back to 2006. The spread between one-year and nine-month risk reversals is trading around 40 basis points in favor of the longer-term puts.

Technical Analysis

EURUSD (4 hour Chart)

EURUSD consecutive two days slightly move in the day market which girds in a tiny horizontal channel, trading at 1.2088 as of writing. Eurodollar bounced back but under 1.21 from an intraday low of 1.2060 while investors awaiting the ECB chairman speaking, the FOMC statement, and the Fed interest rate decision. For the RSI side, an indicator shows 58 which suggests an upward momentum ahead of. On average price aspect, 15 and 60-long SMAs are retaining an ascending trend.

In the light of the aforementioned suggestion, we still expect the market to maintain bull movement at the current stage. It is one thing worth noting that there has a solid threshold at 1.21. In addition, the market could face tumultuous as the central bank governor speaking and any decision.

Resistance: 1.2106

Support: 1.2071, 1.199, 1.192

USDJPY (4 Hour Chart)

Japan yen hovered to close the day in the positive territory, trading at 108.756 level as of writing, whilst the greenback clings in tiny daily gains. In the morning session, the BoJ governor said that the central bank can achieve a 2% inflation target by continuing powerful money easing as at its post-monetary policy meeting that drives devaluation expectation rising. For the RSI side, the indicator is locating at 66 figures, suggesting a bull move in the short run. On the other hand, the yen jumped significantly which drove the 15-long SMA indicator to turn upward way and 60-long remaining a slight move.

At the current stage, yen stands above the month-long neckline at 108.37 level as recovery from days ago low. Therefore, we believe the market has potential upward indication. However, we see the market momentum was pick up too rapidly in the short term that probably will induce some take-profit trade from a long position.

Resistance: 108.93, 109.22

Support: 108.37, 107.936

USDCAD (4 Hour Chart)

Loonie fails to continue its downward momentum as it struggles nearby critical support and the pan-commodities market was lacks any direction, modest recovery above the 1.24 mark. For RSI side, indicator record 34 figure which suggests a downward sentiment in the short term. On the moving average side, both SMA indicators are retaining downside movement.

Integrity all spots, we consist our yesterday view that loonie could cling at the current stage, at 1.238 level, to waiting for another strong bearish signal like greenback devaluation or loose statement from the central bank. Moreover, pan-commodities price rising will appreciate for loonie as well.

Resistance: 1.246, 1.2491, 1.2587

Support: 1.238

20210428
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Data on Thursday may show U.S. gross domestic product increased at a…

Data on Thursday may show U.S. gross domestic product increased at a 6.9% annualized pace from January through March

20210427
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Market Focus

U.S. equities climbed to a record high amid solid corporate earnings and confidence that the Federal Reserve will remain accommodative even as robust growth takes the world’s largest economy back to pre-pandemic levels.

The S&P 500 rose after notching its first weekly decline since mid-March. Most of the main 11 industry groups gained, with energy and consumer-discretionary shares jumping the most. Small-cap stocks in the Russell 2000 outperformed the broader market. The U.S. 10-year Treasury yield hovered around its 50-day moving average. Copper, seen as a barometer of growth, surged to the highest in a decade.

Investors this week will focus on corporate earnings and U.S. economic data even as the Fed primes them to expect no change to policy at their two-day meeting ending Wednesday. While emerging economies from India to Brazil are grappling with a Covid-19 surge or renewed curbs, the developed world is on a firmer recovery path with a faster pace of vaccination.

Data on Thursday may show U.S. gross domestic product increased at a 6.9% annualized pace from January through March after a more moderate 4.3% rate in the previous quarter. Other reports this week may show a pickup in consumer confidence and robust personal spending. Recent indicators cemented economic optimism, with durable goods orders rebounding in March and output at manufacturers and service providers reaching a record high in April.

European stocks advanced Monday, as gains for banks and travel companies offset losses for food companies and utilities. The dollar was little changed after initially falling to a two-month low. It was still on course for the biggest monthly drop this year.

Main Pairs Movement

The Canadian dollar touched a five-week high, while the Australian dollar topped all Group-of-10 peers Monday, as a key index of commodities climbed to the highest since June 2018. A gauge of the dollar hit the lowest in two months as the Federal Reserve is set to begin a two-day meeting that ends Wednesday with a decision that could provide clues on its tapering stance.

Among G-10 peers, the Australian, Canadian, and New Zealand dollars outperformed amid a surge in copper and iron ore prices; the yen and euro led losses.

EUR/USD -0.1%; earlier climbed to 1.2117, the highest since Feb. 26. Short-dated risk reversals ease with gamma around EUR2.6 billion of 1.20 strikes and EUR2 billion of 1.19 strikes rolling off Wednesday.

AUD/USD advanced 0.8% to 0.7803; NZD/USD rose 0.5% to 0.7238. Pair likely capped by ~AUD1.1 billion of 0.7830 options expiring Tuesday, according to DTCC data. GBP/USD +0.2%; rose as much as 0.4% to 1.3929; a move through 1.40 is likely.

Technical Analysis

EURUSD (4 hour Chart)

EURUSD slightly move in the day market which girds in a tiny horizontal channel, trading at 1.2086 as of writing. As the latest CFTC report, the EUR net speculator’s positioning increasing sharply. For RSI side, indicator show 59 figure at the moment, suggest a bullish momentum in the short run. Furthermore, 15 and 60-long SMAs indicators are remaining ascending trend. Therefore, we still optimistic for the next bullish momentum base on the current thread. However, there has a pursuant resistance at 1.2106 on the north side. If the euro penetrate the resistance, we believe the euro would hold the bull movement ahead.

Resistance: 1.2106

Support: 1.2071, 1.199, 1.192

AUDUSD (4 Hour Chart)

The Aussie dollar has remained on an upward track to post strong daily gains around 0.78 level which amid weakness greenback and benefit by booming commodities price as it commodities-linked characteristic. In the absence of worth nothing news, the pickup witnessed in copper prices provided a boost to the Aussie. For the technical side, the RSI indicator has risen to 68 figures which suggests a bullish guideline. On average price view, 15 and 60-long SMAs indicators are both sprawling upward trend.

Overall, we expect the market still has room for the upper side if the greenback remaining weakness and the rising price of the commodities marketplace. Elsewhere, we see there has strong resistance in a short distance on 0.783 around. Moreover, unstoppable bullish sentiment will drive RSI too quick to over-bought thresholds that might spur some sell-off orders to the market.

Resistance: 0.783

Support: 0.775, 0.7695, 0.7656

USDCAD (Daily Chart)

Just like other commodities-linked currencies, the loonie is also driven by weak greenback and inflation expectation of the commodities market. As of writing, the loonie tumbled during the North American session, reaching the lowest level since March 18th and also the multi-year low. Pair broke 1.246 then close around 1.2394 level. From the RSI perspective, the indicator has dropped to 30 figures which pretty close to the over sought barrier. Moreover, 15 and 60-long SMAs indicators have a death cross in recent days.

Integrity all spots, we foresee the market will reverse currently a movement in short term as trigger the critical support level. On the slip side, if the market successive tamp down over nadir level, there will extend the plummet momentum and sentiment because there lacks a price cluster support.

Resistance: 1.246, 1.2491, 1.2587

Support: 1.238

20210427
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