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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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The equities market whipsawed this week as Joe Biden plans to propose…

The equities market whipsawed this week as Joe Biden plans to propose almost doubling the capital gain tax rate for the wealthy

20210426
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Market Focus

US stocks market edged higher after strong economic data added to evidence that the recovery is gaining momentum, with a batch of earnings sessions are coming up. The Dow Jones Industrial Average climbed 227.59 points, led by the financial sector. The S&P 500 edged 1.1% while the Nasdaq climbed 1.4%.

Economic data on US new home sales rebounded sharply in March to the highest since 2006; by this, it suggested that the housing market is back on track. At the same time, output at American manufacturers and service providers reached a record high in April. As a result, both economic data appear to show that the economy is gradually back on track in the US.

President Joe Biden wanted to end the preferential US tax treatment of investment income. With that, the White House planned to propose almost doubling the capital gains tax rate for those earning more than 1 million to 39.6%. This proposal will send the top federal rate on the appreciation in assets sold as high as 43.4%, almost doubling.

The equities market whipsawed this week as Joe Biden plans to propose almost doubling the capital gain tax rate for the wealthy. As stocks traded near all-time highs, investors reacted to get a sense of the pace of rebound inactivity.

Main Pairs Movement

The precious metal, gold slid as the US bond yields rose today. The yield on benchmark 10- year Treasuries is heading for its first positive move in four days, making gold less attractive. Moreover, gold’s bullion shrugged off news that Joe Biden will propose the new tax rates on capital gains for wealthy individuals, which hammered both stocks and gold.

The Canadian dollar climbed against the US dollar for a third straight weekly gain amid the US dollar losses and as a key gauge of commodities touched the highest since 2018.

Aussie gains after Westpac’s influential economist Bill Evans forecast an improving employment profile for the nation and higher bond yields. The Australian unemployment rate is forecasted to get better, cutting to 5% from the original 5.7%, while also raising three-year bond forecasts.

The eurodollar edged higher amid positioning ahead of next week’s Fed meeting and expectations that the common currency will receive ongoing support from reserve asset diversification.

Technical Analysis

EURUSD (4 Hour Chart)

EURUSD has shown a strong rebound since the beginning of April. The pair’s bulls are in charge, currently trading at 1.2070. With its current bullish momentum, the pair is hovering around the immediate resistance at 1.2070. If the pair can successfully breach the resistance, it will accelerate toward the next level at 1.2175 as the upward momentum will lead the pair to trade above both 20 SMA and 50 SMA. Moreover, the technical indicator, the MACD continues to lend support to the bulls while the RSI has not yet reached the overbought condition. That being said, EURUSD still sustains its upward traction.

Resistance: 1.2071, 1.2106

Support: 1.199, 1.192, 1.1877

GPBUSD (4 Hour Chart)

GBPUSD extends decline towards the 1.3800 regions despite a pullback later in the day. The pair are fighting to hold onto the 50 SMA on the four-hour chart. Momentum has turned to the downside after the pair fails to challenge the resistance level at 1.3879, signaling that bears are gaining ground. At the moment, the MACD is in the stage of lending supports to bears whilst the RSI is neither overbought nor oversold. That being said, the near-term outlook is mixed, but the downside looks more appealing.

Resistance: 1.3879, 1.3929, 1.4009

Support: 1.3839, 1.3799, 1.3749

XAUUSD (Daily Chart)

Gold loses its traction after contesting psychological resistance in 1800. It seems like the bullish trend from the previous double bottom has been diminished, and needs a temporary adjustment. However, in a bigger picture, the bullish momentum from gold can still be seen, moving further north toward 1800 again, as the technical indicator, RSI, is still outside of the overbought territory on the daily chart, giving the pair rooms to extend further north; at the same time, the MACD continues to lend support to bulls as the MACD line is still well above the signal line. The temporary adjustment is expected to see in the price range between 1800 and 1749; afterward, the bullish trend should not be a surprise to see.

Resistance: 1800, 1861, 1953.46

Support: 1749.27, 1684.94

20210426
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U.S. stocks had their biggest slide in five weeks after President Joe…

U.S. stocks had their biggest slide in five weeks after President Joe Biden was said to propose almost doubling the capital-gain tax for the wealthy

20210423
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Market Focus

U.S. stocks had their biggest slide in five weeks after President Joe Biden was said to propose almost doubling the capital-gain tax for the wealthy. The dollar advanced.

The S&P 500 turned lower after Bloomberg News reported that for those earning $1 million or more, the new top rate, coupled with an existing surtax on investment income, means that federal tax rates for rich investors could be as high as 43.4%. Speculation arose that some traders may sell shares before any change is made to capture the lower rate.

Equities whipsawed throughout the session amid mixed economic data and renewed concern the pandemic was worsening. All major groups in the S&P 500 fell, led by material, energy, and tech shares. AT&T Inc. jumped after beating earnings estimates. Intel Corp. — the biggest chipmaker — slid in after-hours trading as it reported a drop in data-center revenue and a steep slump in gross profit margin.

Elsewhere, Bitcoin declined for the sixth time in seven days, extending losses after the higher capital gains proposal was revealed. Investors already face a capital gains tax if they hold the cryptocurrency for more than a year.

Main Pairs Movement

The dollar rose as reports of President Joe Biden considering almost doubling the capital gains tax rate weighed on risk appetite, with U.S. stocks headed for worst day in four weeks. The euro slipped after the European Central Bank confirmed that it was not yet discussing a phase-out of its emergency bond purchases. U.S. 10-year bond yields slid for a third day, edging lower to 1.55%; U.S. stocks headed for their biggest drop since mid-March.

Here are the takeaways from the ECB decision and news conference.

  • The ECB kept policy steady as widely expected, confirming that the latest incoming information pointed to a continued need for “significantly higher” emergency bond purchases;
  • Pressed on whether the last weeks’ purchase figures really constituted a “significant” increase, President Christine Lagarde stressed the focus must be on monthly numbers, rather than weekly;
  • She also said it would be premature to discuss phasing out the crisis tool, and offered a downbeat assessment of the short-term risks to the economy. A number of analysts expect buying to slow again in the third quarter;
  • Lagarde highlighted that she doesn’t see the ECB and the U.S. Federal Reserve moving in tandem, as the two economies are “not on the same page”;
  • Market moves were limited, with the euro erasing again to trade around 1.2026 versus the dollar; German and Italian bonds also reversed earlier.

USD/JPY is little changed at 108.09, dropped as much as 0.2% as Tokyo Governor Yuriko Koike sought to reimpose a state of emergency. NZD/USD sinks 0.8% to 0.7159 to be the worst performer in G10. The kiwi’s decline was led by sales against the Aussie, according to an Asia-based FX trader. AUD/NZD snapped a three-day drop to rise 0.1%.

Technical Analysis

EURUSD (4 Hour Chart)

The European Central Bank had a monetary policy meeting. As widely anticipated, European policymakers decided to leave the rate unchanged. President of ECB said it would be premature to discuss phasing out the crisis tool, and a pessimistic assessment of the short-run risks to the economy. On the technical side, the RSI indicator has fallen below the neutral line to 49.7 figures as of writing, suggesting a shred of bearish movement. On the other hand、, the 15-long SMA indicator turn side to south way but the 60-long SMA indicator remains north way.

On price action, it is obvious that the eurodollar attains strong downside support after correction to 1.199 level a couple of times. As the mixed information, we foresee the market still have a north side chance. However, poor indicator suggestion is pinning the marketplace. Therefore, 1.19 is still a vital first support level that needs immediately to be defended. If penetrate downward further, 1.192 will be the next support level.

Resistance: 1.2071, 1.2106

Support: 1.199, 1.192, 1.1877

GPBUSD (4 Hour Chart)

At the time of writing, the pound slip to 1.3839. It seems lost the gravity that down from 1.9349 to low 1.3826 while U.S. session. In imminent sessions, UK Retail Sales is due on Friday, along with the flash PMIs data. Reuters reported that “British manufacturing’s expectations of an economic rebound rose to highest since 1973 this month as the country began recovery from COVID-19 pandemic”. However, we need to faint wary of UK PM was warning the next pandemic wave probably forthcoming.

For the RSI side, the indicator has dropped to 37.8 figures, suggesting a bearish momentum ahead. From on price average perspective, 15-long SMA turns negative slope whilst 60-long SMA retains upward movement. Currently, we see the price has plummeted over the former critical support level at 1.39 which is the neckline of a previous double bottom. Therefore, we expect the market will choppy in a tiny range between first resistance and support gauge. On the slid way, if consecutive go down after 1.3822 level, it could induce continuously downward movement.

Resistance: 1.4, 1.3959, 1.39

Support: 1.3822, 1.3796

XAUUSD (4 Hour Chart)

Gold stopped the previous two days’ snap up the momentum that slipped to alongside 15-long SMA indicator; at the meantime, 15 and 60-long SMAs indicator are remaining the ascending trend. The gold market has been dragged down by overwhelming greenback after U.S. president Joe Biden wants to rose the tax. For the RSI view, an indicator shows 56 figures as of writing which suggests a glimmer of bullish momentum.

All in all, we still feel optimistic about the upcoming market bull movement. Therefore, if we have to keep upward momentum, any correction needs to stop at the $1759.7 level on slid way.

Resistance: 1800.7, 1812.8

Support: 1759.7, 1754.5, 1722.75

20210423
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