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Forex News Timeline

Monday, May 17, 2021

The USD/CHF pair has been capped below the 200-day average at 0.9082 as expected. Economists at Credit Suisse look for a turn back lower from here. Th

The USD/CHF pair has been capped below the 200-day average at 0.9082 as expected. Economists at Credit Suisse look for a turn back lower from here. The 200-day average at 0.9082 caps “USD/CHF remains capped below the 200-day average and uptrend from the 2021 lows at 0.9082/9119 as expected and we look for a deeper swing lower from here, as the recent break below his level suggested that the broader downtrend has resumed.  “The next support is seen at last week’s low at 0.8985, then 0.8922/10, before 0.8871/62, which is an important price low. A test of the 2021 low at 0.8757 now seems increasingly likely given the deteriorating trend following setup.” “Resistance stays at the 200-day average at 0.9082/9119, which should now ideally cap to keep the risks directly lower. Above here, the next levels are seen at 0.9165.”  

The USD/CAD pair extended its sideways consolidative price action through the mid-European session and remained confined in a narrow trading band abov

A softer tone around oil prices undermined the loonie and extended some support to USD/CAD.Dovish Fed expectations continued weighing on the USD and kept a lid on the attempted bounce.The USD/CAD pair extended its sideways consolidative price action through the mid-European session and remained confined in a narrow trading band above the 1.2100 mark. The pair was last seen hovering around the 1.2120-25 region, up over 0.20% for the day. Having shown some resilience below the 1.2100 mark on Friday, the pair managed to gain some positive traction on the first day of a new week and was supported by a combination of factors. The continuous surge in COVID-19 cases across Asia and the imposition of fresh restrictions fanned worries about fuel demand recovery. Apart from this, underwhelming Chinese Industrial Production data, along with a generally softer risk tone acted as a headwind for crude oil prices. This, in turn, undermined demand for the commodity-linked loonie and extended some support to the USD/CAD pair. That said, a combination of factors capped the upside. The divergence in monetary policies adopted by the Bank of Canada and the Federal Reserve held bullish traders from placing any aggressive bets around the USD/CAD pair. At the April policy meeting, the BoC reduced its weekly asset purchases and brought forward the guidance for the first interest rate hike to the second half of 2022. On the other hand, investors remain convinced that the Fed will keep interest rates low for a longer period. The expectations were reinforced by Friday's disappointing release of the US monthly Retail Sales report, which, along with the ongoing decline in the US Treasury bond yields, continued weighing on the US dollar. Even from a technical perspective, the USD/CAD pair's inability to register any meaningful recovery and the emergence of some fresh selling at higher levels favours bearish traders. This, in turn, suggests that the path of least resistance is down and any attempted recovery might still be seen as a selling opportunity. There isn't any major market-moving economic data due for release on Monday, either from the US or Canada. Hence, the US bond yields and the broader market risk sentiment will play a key role in influencing the USD. Traders might further take cues from crude oil price dynamics to grab some short-term momentum play. Technical levels to watch  

Following his meeting with British Prime Minister Boris Johnson on Monday, Irish Taoiseach (Prime Minister) Micheál Martin said it was not his immedia

Following his meeting with British Prime Minister Boris Johnson on Monday, Irish Taoiseach (Prime Minister) Micheál Martin said it was not his immediate sense that London wanted to completely rewrite the Northern Ireland (NI) protocol, as reported by Reuters. Meanwhile, UK PM Johnson's spokesman reiterated that solutions must be found rapidly to the NI protocol and added that they hope the EU will take a "risk-based approach." Market reaction These comments don't seem to be having a significant impact on market sentiment. The UK's FTSE 100 Index was last seen losing 0.67% on a daily basis at 6,996. Meanwhile, the GBP/USD pair continues to trade in a relatively tight range and stays flat around 1.4100. 

Crude oil prices rose for the third straight week and the barrel of West Texas Intermediate (WTI) gained nearly 1% to settle above $65. With the finan

Crude oil prices fluctuate in a tight range on Monday.Industrial Production in China expanded by 9.8% in April.Investors await weekly crude oil stocks data from US.Crude oil prices rose for the third straight week and the barrel of West Texas Intermediate (WTI) gained nearly 1% to settle above $65. With the financial markets staying relatively quiet at the start of the week, WTI trades in a very narrow range around $65.50. Factory activity in China slows down modestly Earlier in the day, the data from China revealed that Industrial Production in April expanded by 9.8% on a yearly basis following March's increase of 14.1%. Nevertheless, this reading came in line with the market expectation and failed to trigger a meaningful reaction in crude oil prices. In the meantime, investors remain hopeful for a steady recovery in the global energy demand with major economies continuing to soften coronavirus-related restrictions. On the other hand, the Colonial Pipeline recovered from last week's cyberattack and eased concerns over supply shortages, limiting WTI's upside for the time being. Finally, Saudi Arabia announced on Monday that oil products exports in March declined 0.121 million barrels per day to 1.109 million barrels per day, as reported by Reuters. Later in the week, the API's and the EIA's weekly crude oil stock data from the US will be looked upon for fresh impetus. Technical levels to watch for  

EUR/USD extends the rebound from last week’s lows in the 1.2050 region to levels close to 1.2170 at the beginning of the week. The ongoing context all

EUR/USD adds to recent gains well above of 1.2100.Extra gains could see the monthly tops around 1.2180/90 retested.EUR/USD extends the rebound from last week’s lows in the 1.2050 region to levels close to 1.2170 at the beginning of the week. The ongoing context allows for the continuation of the uptrend, at least in the very near-term, with the next hurdle at the so far monthly tops in the 1.2180/90 band (May 11). Above this level, the February’s high at 1.2243 emerges as the immediate resistance for EUR-bulls. The constructive stance on EUR/USD is forecast to remain intact as long as it trades above the 200-day SMA, today at 1.1953. EUR/USD daily chart  

DXY drops for yet another session and gradually approaches the key support in the 90.00 neighbourhood. The continuation of this pullback carries the p

DXY accelerates the downside and trades closer to 90.00.Further south lines up the May’s low at 89.98.DXY drops for yet another session and gradually approaches the key support in the 90.00 neighbourhood. The continuation of this pullback carries the potential to revisit monthly lows in the 90.00/89.95 band (May 11). In the meantime, and looking at the broader scenario, while below the 200-day SMA, today at 91.83, the outlook for the buck is forecast to remain negative. DXY daily chart  

The British Retail Consortium (BRC) called for urgent discussions between the European Union and the UK officials over the proposed post-Brexit Irish

The British Retail Consortium (BRC) called for urgent discussions between the European Union and the UK officials over the proposed post-Brexit Irish Sea border checks for food products, as reported by Reuters. "We have always argued for a long term pragmatic approach to checks and paperwork on food moving from Great Britain to Northern Ireland; one that recognises the need for EU import controls but does not add unnecessary bureaucracy and costs, reducing choice for Northern Ireland consumers," Andrew Opie, director of food & sustainability at the BRC said. Market reaction This headline doesn't seem to be having a significant impact on market sentiment. As of writing, the UK's FTSE 100 Index was down 0.7% on a daily basis at 6,993.

EUR/JPY met some decent resistance after recording new YTD peaks in levels just shy of 133.00 the figure earlier in the session. If the latter is clea

EUR/JPY clinches new 2021 highs just below 133.00.Further north of 133.00 comes in the 133.13 level.EUR/JPY met some decent resistance after recording new YTD peaks in levels just shy of 133.00 the figure earlier in the session. If the latter is cleared, then the buying impulse could push the cross to attempt a move to the September 2018 high at 133.13. Further gains remain likely while above the immediate support line (off the March lows) near 130.50. This area is also reinforced by the 50-day SMA, today at 130.46. In the broader picture, while above the 200-day SMA at 126.68 the broader outlook for the cross should remain constructive. EUR/JPY daily chart  

Economist at UOB Group Barnabas Gan reviews the latest COVID-19 measures implemented in Singapore and the impact on the growth prospects. Key Quotes “

Economist at UOB Group Barnabas Gan reviews the latest COVID-19 measures implemented in Singapore and the impact on the growth prospects. Key Quotes “Singapore’s multi-ministry task force will further tighten social restriction measures effective 16 May 2021. The new measures, coined as Phase Two (Heightened Alert) will be in place until 13 June 2021.” “First-order negative impacts will likely be on Singapore’s retail sector, especially the food & beverage industry.” “We note that Singapore’s economy has shown signs of recovery in the first quarter of 2021. Based on the advance estimates by the Ministry of Trade and Industry (MTI), Singapore’s 1Q21 GDP expanded +0.2% y/y (+2.0% q/q sa), although we think that it may be upgraded to +0.9% y/y (+2.7% q/q sa) given the stronger-than-expected manufacturing growth in 1Q21.” “Despite Singapore’s retail sector possibly seeing further negative effects due to the tightened measures, we note that other key growth pillars such as manufacturing (21.9% of GDP in 2020) and other major services clusters such as finance & insurance (14.3% of GDP), business services (13.0% of GDP), and information & communications (4.8% of GDP) may see little impact from the tightened measures.” “While we projected little impact on Singapore’s GDP in 2021 from the initial announcement of Phase Two (effective 8 May), the further tightening of social distancing measures announced today will likely add some downside impact on Singapore’s retail sector, which in turn could inject marginal downside risk to our full-year GDP outlook of 5.5% in 2021, albeit transitory if the tightened measures last till 13 Jun and are subsequently relaxed. For now, we would prefer to hold our growth forecast at the 5.5%, until further clarity on how the COVID-19 situation evolves in the foreseeable future.”

EUR/JPY closed above our prior 132.55 objective on Friday – the 78.6% retracement of the 2018/2020 bear trend. This should reassert the uptrend for a

EUR/JPY closed above our prior 132.55 objective on Friday – the 78.6% retracement of the 2018/2020 bear trend. This should reassert the uptrend for a test of the key highs of April and September 2018 at 133.13/49 next, analysts at Credit Suisse appraise. Above 132.55 should see resistance next at 133.12/13, then 133.49 “EUR/JPY finally broke above the 78.6 % retracement of the entire 2018/2020 bear trend at 132.55 on Friday. This should bring the brief consolidation to an end and reinforce the broader uptrend, with resistance seen next at the September 2018 highs at 133.12/13, potentially as far as the 133.49 high of April 2018, with another temporary cap expected for now in this 133.13/49 zone.”  “We eventually see scope for a move to the 137.50 2018 high.  “Near-term support stays at 1 2.07 /131.95, with 131.67 ideally holding further weakness. A break though would set a minor top with support then seen next at 131.41/37.”  

One would be hard-pressed to recall a comparable asset in financial history where valuation estimates were as vast as Bitcoin’s has been – ranging fro

One would be hard-pressed to recall a comparable asset in financial history where valuation estimates were as vast as Bitcoin’s has been – ranging from nothing at all to the lofty millions of dollars. Strategists at DBS Bank bring various considerations for both bulls and bears of Bitcoin while keeping in mind the boundless realm of possible outcomes.  See:   Three opportunities that Bitcoin brings – DBS Bank Bitcoin: Three possible roadblocks to widespread adoption – DBS Bank Is Bitcoin just another manic bubble, or the start of a new monetary revolution? “To the bears, it is worth considering that Bitcoin’s blockchain technology is indeed revolutionising finance as we speak, while characteristics of decentralisation, security, limited supply, and digital nature render it unique properties that are near impossible to find substitutes for. To the bulls, the future is still rife with uncertainty with Bitcoin’s scalability, volatility, regulatory, and geopolitical risks all serving as roadblocks to widespread adoption.” “As with most new technologies, investor enthusiasm can be a large factor in asset bubble formation. This certainly does not mean that the underlying technologies do not have value. There is often a wide gap between the value of an idea and the investors’ ability to capture that value. While the idea of Bitcoin is revolutionary with a ‘first mover advantage’, one would also recall that the first web browser or search engine are no longer in existence.” “As rational investors, it is consistent then from a standpoint of diversification to allocate funds to Bitcoin, with full mental acceptance that losing these funds would be well within the realm of possible outcomes. Yet should valuations only rise skyward from here, the investor can stand with pride to say that they were right there when it began, playing their part in ushering in the dawn of the monetary revolution. That, we suspect, is an opportunity that (fiat) money cannot buy.”  

The GBP/JPY cross traded with a mild negative bias through the first half of the European session, albeit lacked any follow-through selling. The cross

A softer risk tone benefitted the safe-haven JPY and exerted some pressure on GBP/JPY.The formation of a rectangle points to a near-term consolidation before the next leg up.Bullish oscillators on the daily chart support prospects for an eventual breakout to the upside.The GBP/JPY cross traded with a mild negative bias through the first half of the European session, albeit lacked any follow-through selling. The cross, so far, has managed to hold its neck above the 154.00 mark and remained confined in a narrow trading band. The range-bound price action over the past one week or so constitutes the formation of a rectangular chart pattern, marking a brief pause in the trend. Given the recent positive move to multi-year tops, the rectangle might still be categorized as a bullish consolidation phase. That said, a softer risk tone around the equity markets extended some support to the safe-haven Japanese yen and capped the upside for the GBP/JPY cross. Apart from this, slightly overbought RSI on the weekly chart further held bulls from placing aggressive bets. Meanwhile, bullish technical indicators on the daily chart, which are still far from being in the overbought territory, add credence to the constructive outlook. This, in turn, supports prospects for an eventual breakout on the upside and additional near-term gains. Hence, any meaningful dip towards the lower end of the mentioned trading range, around the 153.55-50 region might still be seen as a buying opportunity. This should help limit the downside for the GBP/JPY cross near the 153.00 mark, or a previous strong resistance breakpoint. On the flip side, a sustained move beyond the 154.25-30 region will be seen as a fresh trigger for bullish traders and set the stage for a move towards reclaiming the key 155.00 psychological mark. Bulls might further lift the GBP/JPY cross towards the 156.00 round figure. GBP/USD 1-hour chart Technical levels to watch  

AUD/USD is battling the critical short-term 21-daily moving average (DMA) at 0.7762, as the sellers return amid a pause in the US dollar sell-off acro

AUD/USD drops after facing rejection near Friday’s high of 0.7788.The aussie to find strong bids around 0.7720 region. RSI holds above the midline, keeping the buyers hopeful. AUD/USD is battling the critical short-term 21-daily moving average (DMA) at 0.7762, as the sellers return amid a pause in the US dollar sell-off across the board. The aussie fails to benefit from the rise in gold and silver prices, as markets turn risk-averse amid mixed Chinese activity numbers, which suggested an uneven economic recovery in the Australian top export destination. At the time of writing, the aussie is trading around 0.7750, down 0.23% on the day, having faced rejection just shy of Friday’s high of 0.7788. The AUD bulls need to take out the latter to resume its uptrend towards 0.7800. Acceptance above the round figure could call for a meaningful move higher. The Relative Strength Index (RSI) is edging lower but remains above the midline, suggesting that the downside potential could be limited. AUD/USD daily chart Strong support awaits around the 0.7720 region, which is the confluence of the 100 and 50-DMAs. Note that the price hasn’t given a daily closing below these two averages since May 4. A breach of the latter could expose the 0.7700 psychological level. Further south, the May 4 low of 0.7675 could test the bearish commitments. AUD/USD additional levels to watch    

Ultimately, the million (or rather, trillion) dollar question on Bitcoin is whether there is an existing metric by which this new asset class can be a

Ultimately, the million (or rather, trillion) dollar question on Bitcoin is whether there is an existing metric by which this new asset class can be accurately valued. Current attempts at valuation fall under five major categories, as economists at DBS Bank note. See: Bitcoin: Three possible roadblocks to widespread adoption – DBS Bank Three opportunities that Bitcoin brings – DBS Bank Bitcoin’s valuation frameworks “Disruptable markets. Analysts review the potential for disruption of various currency and commodity markets and estimate how much market share Bitcoin will take from fiat (currently c.USD100t of global money supply) or gold (currently valued as a c.USD9t market). For example, estimating that Bitcoin would eventually gain the prominence of gold with a back-of-envelope calculation would see an estimated price of (USD9t ÷ c.18m BTC in existence = USD500k per BTC).” “Costs of production. This is a supply-side consideration applicable to traditional commodities where the equilibrium price of Bitcoin is equivalent to the cost of the last miner to join in producing (in this case, the cost of electricity consumed in mining Bitcoin).”  “Equation of Exchange (MV = PQ). An old macroeconomic equation to value money using the supply of money (M), velocity of money in a given time period (V), the price level (P) and the transaction volume in a given time period (T). With a relatively static M for Bitcoin, estimates of V and T would lead to an approximation for its price P.” “Metcalfe’s law. This was originally applied to telecommunications networks where valuations are proportional to the square of users in the system (n2). For Bitcoin, this implies that a liner increase in adoption would lead to an exponential increase in valuations.  “Stock-to-flow models. The stock-to-flow ratio is used to evaluate the current stock of a commodity against the flow of new production. High ratios are indicative of store-of-value commodities, as production is stored more as a monetary hedge than consumed in industrial application.”  

The USD/CAD pair has shifted into a short-term range between key long-term support at 1.2062/47 and short term resistance at 1.2190/2206. Analysts at

The USD/CAD pair has shifted into a short-term range between key long-term support at 1.2062/47 and short term resistance at 1.2190/2206. Analysts at Credit Suisse stay bearish though – looking for an eventual break below the aforementioned support. USD/CAD remains in a near-term consolidation phase above 1.2062/47 “Post this sideways consolidation phase, we look for a resumption of the strong medium term downtrend and an eventual break below 1.2062/4 7. A weekly close below here would complete a multi - year ‘double top’ to dramatically reinforce our medium term bearish outlook, with the next level at 1.1916.”  “Near-term resistance stays at 1.2190/2206, above which would reassert the corrective potential, with the next levels at 1.2262/80, then more importantly at 1.2350/65, which we look to cap any deeper rebound back higher.”  

The USD/CHF pair struggled to preserve its modest intraday gains and was last seen trading near session lows, just above the key 0.9000 psychological

A combination of factors failed to assist USD/CHF to capitalize on its modest intraday uptick.Dovish Fed expectations, sliding US bond yields undermined the USD and exerted pressure.A softer risk tone benefitted the safe-haven CHF and further contributed to the selling bias.The USD/CHF pair struggled to preserve its modest intraday gains and was last seen trading near session lows, just above the key 0.9000 psychological mark. As investors looked past Friday's disappointing US Retail Sales report, the US dollar edged higher on the first day of a new trading week and extended some support to the USD/CHF pair. However, dovish Fed expectations held the USD bulls from placing aggressive bets and kept a lid on any meaningful upside for the major. Apart from this, a softer tone around the equity markets underpinned the safe-haven Swiss franc and prompted some fresh selling around the USD/CHF pair. The flight to safety was reaffirmed by the ongoing decline in the US Treasury bond yields, which was seen as another factor that acted as a headwind for the USD. Meanwhile, the downside remains cushioned, at least for the time being, warranting some caution for bearish traders. Hence, it will be prudent to wait for some follow-through selling below the 0.9000 mark before positioning for any further depreciating move amid absent relevant market moving economic releases from the US. A sustained break below the mentioned handle will set the stage for an extension of the recent sharp pullback from the 0.9470-75 region, or nine-month tops touched in April. The USD/CHF pair might then accelerate the fall towards intermediate support near the 0.8940 region before eventually dropping to the 0.8900 round figure. Technical levels to watch  

One of the many digital assets under the umbrella term known as cryptocurrency, Bitcoin has become history’s most polarising asset after the tulip in

One of the many digital assets under the umbrella term known as cryptocurrency, Bitcoin has become history’s most polarising asset after the tulip in the mania of the 1630s. Economists at DBS Bank try to gauge the obstacles in having exposure to such a novel asset class. See – Three opportunities that Bitcoin brings – DBS Bank Three views in opposition to Bitcoin “Low transaction speeds – a scalability problem. The Bitcoin blockchain can guarantee only around 4.6 transactions per second, a far cry from the more than 1,700 per second that Visa contends to accomplish on average. Bitcoin, functioning as a currency, appears to run up against a currency ‘impossible trinity’ of being a unit of account, a means of transaction, and a store of value (any currency at best only embodies two out of three); even as it could improve as a store of value vs other fiat currencies, it currently pales in comparison as a means of transaction.” “High price volatility – a poor unit of account. Observing the price movement of Bitcoin in the last three years alone – a range of USD3k to USD63k per BTC – would be sufficient to conclude that it would be a poor substitute for money as a unit of account for goods and services. The daily price volatility of Bitcoin exceeds most Emerging Markets currencies, and exceeds even high beta commodities such as crude oil and silver.” “Regulatory uncertainty – Risk of unfavourable legislature. Authorities unlikely to allow Bitcoin to threaten their monopolistic control over currency, with actions related to heavy taxation and delegitimization a potential scenario.”  

The EUR/USD pair has held above its key uptrend from the 2021 lows at 1.2071/51, which maintains an upward bias within the broader range, according to

The EUR/USD pair has held above its key uptrend from the 2021 lows at 1.2071/51, which maintains an upward bias within the broader range, according to the Credit Suisse analyst team. Support remains at 1.20571/51 initially and then more importantly at 1.1999/86 “Whilst above the 2021 lows at 1.2071/51, the immediate risk can still lean higher. A break above 1.2152, which has stalled the market this morning, would reinforce the upward bias for strength back to 1.2182/85, then what we expect to be tougher resistance at the 78.6% retracement of the Q1 fall and February high at 1.2212/43, where we will look for a fresh cap. Should strength directly extend, this can expose the top of the broader range and YTD high at 1.2325/1.2350.”  “Below 1.2071/51 can clear the way for a test of what we see as more important support at 1.1999/86 – the early May low and 38.2% retracement of the March/May rally.” “Only below 1.1999/86 though would warn of a more important top (and a possible even larger ‘head & shoulders’ top for further weakness to the 200 -day average at 1.195 7 initially, then 1.1943/42.”   

GBP/USD has been trying to find its feet after falling last week. In the view of FXStreet’s Analyst Yohay Elam, sterling is set to benefit from UK reo

GBP/USD has been trying to find its feet after falling last week. In the view of FXStreet’s Analyst Yohay Elam, sterling is set to benefit from UK reopening and global cooldown. Concerns about global growth could keep the dollar depressed “Summer is here – officially there is a month left, but Brits are already taking advantage of the new regulations, which allow for foreign holidays in select countries. The latest round of easing has begun on Monday, and it also includes more leisure activities.”  “Most Fed officials have been reiterating the position that inflation is transitory. Vice-Chair Richard Clarida and several of his colleagues will be speaking today. If they repeat the same message, the dollar could weaken.”  “Taiwan, the world's largest producer of microchips, is suffering from a wave of infections, joining the ranks of Singapore, India, and other countries. While that may support the safe-haven dollar, it may convince the Fed to keep monetary policy highly accommodative. More dollars printed mean a weaker dollar.”  “Cable is suffering from downside momentum on the 4-hour chart but is trading above the 50, 100 and 200 Simple Moving Averages, a bullish sign. With the Relative Strength Index hovering outside overbought conditions, the upside looks more appealing.”  

China’s Finance Ministry: Will extend tariff exemption for some US imported products from May 19 more to come ...

China’s Finance Ministry: Will extend tariff exemption for some US imported products from May 19  more to come ...

It is now nearly impossible to avoid talking about Bitcoin when approaching the topic of investing. Economists at DBS Bank seek to investigate the man

It is now nearly impossible to avoid talking about Bitcoin when approaching the topic of investing. Economists at DBS Bank seek to investigate the many opportunities that Bitcoin brings and highlights three of them. Carry USD1t in your pocket “Decentralisation – Power to the people. Bitcoin functions on open source software, meaning that decisions to maintain or improve the system are transparent and must be agreed on by a large enough consensus of users – a ‘monetary democracy’, if you will. With power in the hands of the people, some form of the ‘Tinkerbell effect’ is also at play here – an effect that describes things that will continue to exist if people continue to believe in them. With Bitcoin, its discontinuation will only occur when its participants no longer believe it to be a viable medium of exchange. As it stands, this outcome is increasingly remote, with choruses of doubters continuing to fall by the wayside.” “Limited supply – Effective store of value. The effect of both the limited absolute stock, decreasing rate of mining production and high energy production requirement serves to constrict supply of Bitcoin with the passage of time. Coupling this with an elevated demand through familiarity and adoption sees Bitcoin increasingly stabilising at higher valuations. Bitcoin is birthed through a huge expense of energy, produced in limited reserve – running in direct contrast to an endless supply of fiat currencies that can be seemingly printed to existence on a whim. It is only causal then, to observe the latter being devalued against the former.” “More Crypto-commodity than Cryptocurrency – High value density increases ease of portability. Theoretically, all the world’s private keys can be stored on a USB drive – valued at c.USD1t. No other physical commodity can rival this portability of wealth.”  

The NZD/USD pair remained depressed through the early European session and was last seen hovering near the lower end of its daily trading range, just

NZD/USD edged lower on Monday amid a generally softer tone around the equity markets.Dovish Fed expectations, sliding US bond yields weighed on the USD and helped limit losses.The NZD/USD pair remained depressed through the early European session and was last seen hovering near the lower end of its daily trading range, just above the 0.7200 mark. The pair witnessed some fresh selling on the first day of a new trading week and eroded a part of Friday's strong positive move, snapping two consecutive days of the winning streak. The downtick was sponsored by a generally softer risk tone, which tends to drive flows away from the perceived riskier kiwi. Worries about the continuous surge in new coronavirus cases in Asia, along with a further escalation of the Israel-Palestine conflict weighed on investors' sentiment. The negative factor, to some extent, was offset by the prevalent bearish sentiment surrounding the US dollar, which helped limit losses for the NZD/USD pair. The USD was being weighed down by Friday's disappointing US Retail Sales data, which reaffirmed the Fed's dovish view and forced investors to trim their bets for an earlier than anticipated tightening. This, along with the ongoing decline in the US Treasury bond yields, further acted as a headwind for the greenback. There isn't any major market-moving economic data due for release from the US on Monday. Hence, it will be prudent to wait for some follow-through selling below the 0.7200 mark before positioning for any further intraday depreciating move. Technical levels to watch  

Silver (XAG/USD) is on the rise for the third straight on Monday, hitting fresh five-day highs near $27.80, as the bulls look to conquer the $28 mark.

Silver (XAG/USD) is on the rise for the third straight on Monday, hitting fresh five-day highs near $27.80, as the bulls look to conquer the $28 mark. Silver is piggybacking on gold’s surge, as the yellow metal extends its break above $1850, fresh three-month highs. Dovish Fed expectations-led decline in the US Treasury yields favors the non-yielding precious metals. How is Silver positioned on the technical graphs? Silver Price Chart: Key resistance and support levels The Technical Confluences Detector shows that Silver is probing minor resistance at $27.80, which is the convergence of the Bollinger Band one-day Upper and previous high one-hour. The next fierce resistance awaits at $27.91, the confluence of the previous high and pivot point one-day R2. Further north, the pivot point one-month R2 at $28.05 could emerge as a strong barrier. A sustained move above the latter could trigger a rally towards $28.35, where the pivot point one-day R3 lies.   Alternatively, immediate support is seen at $27.60, the intersection of the previous low four-hour and SMA10 one-hour. The XAG bears will face a strong hurdle around $27.45, which is a dense cluster of support levels, comprising of the Fibonacci 61.8% one-week, previous day high and Bollinger one-hour Middle. The confluence of the Fibonacci 23.6% one-day, SMA100 one-hour and SMA5 one-day at $27.30 is the level to beat for the sellers. Here is how it looks on the tool        About Technical Confluences Detector The TCD (Technical Confluences Detector) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.

Greece Unemployment Rate (MoM) up to 16% in January from previous 15.8%

Julia Goh, Senior Economist, and Economist Loke Siew Ting at UOB Group assess the latest BSP event. Key Quotes “Bangko Sentral ng Pilipinas (BSP), as

Julia Goh, Senior Economist, and Economist Loke Siew Ting at UOB Group assess the latest BSP event. Key Quotes “Bangko Sentral ng Pilipinas (BSP), as expected, maintained its accommodative monetary policy stance for the fourth straight meeting today (12 May). The overnight reverse repurchase (RRP) rate was left unchanged at 2.00%, the overnight deposit rate was kept at 1.50%, while the lending rate was held steady at 2.50%. This decision came after the country posted a steeper-thanexpected GDP contraction in 1Q21 yesterday (11 May) while inflation is heading north due to cost-pushed factors and base effects.” “In the latest monetary policy statement, BSP cited confidence that the prevailing monetary policy settings remain appropriate to facilitate the nation’s economic recovery towards a sustainable path. While the growth outlook is still subjected to downside risks due to rising COVID-19 infections, the central bank expects the government’s targeted fiscal interventions, ongoing rollout of the vaccination program, and an improved external environment to continue reinforcing the domestic economic recovery in the coming months. It added that real GDP growth will turn positive beginning 2Q21 and into 2022, mostly aided by favourable base effects and the continuation of government policy support amid a promising rebound in global demand.” “On the inflation front, BSP is now projecting headline inflation to march up at a slower pace than it previously anticipated, to an average of 3.9% this year (vs. previous estimate of 4.2%; UOB forecast: 4.0%; 2020: 2.6%).” “Nevertheless, the central bank adjusted its 2022 inflation forecast higher by 0.2% point to 3.0% (UOB forecast: 3.0%), largely premised on expectations of higher global oil prices, faster domestic demand expansion, and stronger global growth next year. In other words, BSP sees balanced risks to the overall inflation outlook and projects inflation to settle within its 2.0%-4.0% target range in 2021 and 2022.” “Given that BSP has removed its concerns about the build-up of second round inflationary pressures in today’s statement and remains confident that the domestic economy will continue to improve in the near term, we believe the BSP will keep its power dry and use its ammunition with caution as the year progresses… Hence, we expect the RRP rate to be kept at 2.00% for the rest of the year. The next monetary policy decision will be on 23 Jun.”

“The government is concerned at the increasingly hostile tone of the UK government towards the Northern Ireland Protocol,” RTÉ News reports, citing a

“The government is concerned at the increasingly hostile tone of the UK government towards the Northern Ireland Protocol,” RTÉ News reports, citing a senior Irish source. The source has also described as "irresponsible" the suggestion, as briefed by the British government, that the EU would have to deliver a solution to the issues surrounding the backstop by July 12. This comes after the Taoiseach, Micheál Martin held a wide-ranging discussion on Northern Ireland and British-Irish issues with British Prime Minister Boris Johnson at Chequers on Friday. Martin tweeted out: "We also reaffirmed both governments' commitment to the Good Friday Agreement and its institutions." "The argument [at the meeting] was that Protocol doesn't enjoy the support of one community in Northern Ireland, therefore it's not protecting the Good Friday Agreement," said one source. Market reaction GBP/USD remains on the back foot below 1.4100, divided between looming Brexit concerns and the UK reopening. Meanwhile, a pause in the US dollar sell-off also keeps a check in the cable’s upside attempts.

The single currency looks to add to Friday’s gains and lifted EUR/USD to the 1.2150 region on Monday, just to lose some momentum soon afterwards. EUR/

EUR/USD re-tests the 1.2150 level, retreats afterwards.Dollar, yields struggle for direction at the beginning of the week.Italian final CPI rose 0.4% MoM, 1.1% YoY in April.The single currency looks to add to Friday’s gains and lifted EUR/USD to the 1.2150 region on Monday, just to lose some momentum soon afterwards. EUR/USD focused on dollar, economic recovery Following the strong gains recorded on Friday, EUR/USD starts the new trading week on a mixed mood, although still well above 1.2100 the figure and always against the backdrop of diminishing yields and alternating risk trends. Friday’s strong advance was underpinned by the pick-up in German 10-year Bund yields to the vicinity of the -0.10% zone and the sell-off in the greenback after the higher inflation narrative deflated somewhat. Looking at the broader picture, optimism on the gradual re-opening of economies in the Old Continent remains on the rise and propped up by the firmer pace of the vaccination campaign. Earlier in the euro docket, final Italian inflation figures showed consumer prices rose at a monthly 0.4% and 1.1% vs. April 2020. In addition, ECB’s Board member E. McCaul is due to speak. Across the pond, the NAHB Index will take centre stage later in the NA session followed by the NY Empire State Index and TIC Flows. What to look for around EUR EUR/USD closed last week on a strong footing well past 1.2100 the figure mainly on the back of the weakness surrounding the dollar and the strong bounce in yields of the German 10-year Bund. The generalized upbeat tone in the risk complex sustained the rebound in the pair, always in combination with the investors’ shift to the improved growth outlook in the Old Continent now that the vaccine campaign appears to have gained some serious pace and solid results from key fundamentals pari passu with the surging morale in the bloc.Key events in the euro area this week: Advanced EMU Q1 GDP (Tuesday) – Final EMU April CPI (Wednesday) – German/EMU flash May PMIs, advanced Consumer Confidence (Friday).Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund. German elections. EUR/USD levels to watch So far, spot is losing 0.06% at 1.2137 and a break below 1.1985 (monthly low May 5) would target 1.1953 (200-day SMA) en route to 1.1887 (61.8% Fibo of the November-January rally). On the other hand, the next up barrier emerges at 1.2181 (monthly high May 11) followed by 1.2243 (monthly high Feb.25) and finally 1.2349 (2021 high Jan.6).

Turkey Budget Balance declined to -16.9B in April from previous 23.8B

Interest rates have been in a holding pattern over the past month. Short-term rates remain anchored near zero by Federal Reserve policy, while 10-year

Interest rates have been in a holding pattern over the past month. Short-term rates remain anchored near zero by Federal Reserve policy, while 10-year Treasury yields have traded between 1.5% and 1.7% despite signs of strong growth and rising inflation concerns. Economists at Charles Schwab see this as a pause in the upward trend in yields rather than the start of a reversal for three reasons. Real yields aren't reflecting the strong economic outlook “The global recovery should pick up in the second half of the year as more widespread vaccinations allow economies to open. Bond yields in other major developed countries will likely move higher as economic momentum picks up. In the second half of the year, improving growth should lead to rising global yields, potentially pulling US yields higher as well.” “Fiscal and monetary policies are supportive for growth and inflation. The American Rescue Plan should continue to influence consumer spending and aid small businesses and state and local governments. With the pick-up in activity, yields are likely to keep rising.” “Real interest rates are steeply negative, which isn’t consistent with such strong economic growth prospects. Inflation expectations are rising faster than nominal yields, resulting in negative real yields. Assuming the Fed achieves its 2-2.5% inflation target, nominal yields should rise to at least that level.”  

Italy Consumer Price Index (YoY) meets expectations (1.1%) in April

Italy Consumer Price Index (MoM) meets forecasts (0.4%) in April

Italy Consumer Price Index (EU Norm) (YoY) meets forecasts (1%) in April

Italy Consumer Price Index (EU Norm) (MoM) in line with expectations (0.9%) in April

The upside momentum in USD/CNH is expected to meet the next resistance at the 6.4650 level in the short-term horizon, commented FX Strategists at UOB

The upside momentum in USD/CNH is expected to meet the next resistance at the 6.4650 level in the short-term horizon, commented FX Strategists at UOB Group. Key Quotes 24-hour view: “USD traded between 6.4317 and 6.4510 last Friday before closing slightly lower at 6.4405 (-0.15%). Momentum indicators are mostly neutral and USD is expected to consolidate and trade between 6.4300 and 6.4500 for today.” Next 1-3 weeks: “USD dropped sharply to 6.4039 early last week before rebounding strongly. Despite the relatively sharp bounce, upward momentum has not improved by much. From here, USD could edge higher but any advance is likely limited to a test of 6.4650. There is another strong resistance at 6.4800. On the downside, a breach of 6.4200 (‘strong support’ level) would indicate that the current mild upward pressure has eased.”

The GBP/USD pair faded an early European session spike to three-day tops and quickly retreated below the 1.4100 mark in the last hour. Following a bri

GBP/USD failed to preserve/capitalize on its early European session positive move to three-day tops.Brexit jitters offset renewed USD selling, optimistic outlook for the UK economy and capped the upside.The GBP/USD pair faded an early European session spike to three-day tops and quickly retreated below the 1.4100 mark in the last hour. Following a brief consolidation through the early part of the trading action on Monday, the pair regained traction and build on last week's goodish bounce from the key 1.4000 psychological mark. This marked the second day of a positive move and was sponsored by the emergence of some fresh selling around the US dollar. The USD was being weighed down by Friday's disappointing US Retail Sales data, which reaffirmed the Fed's dovish view and forced investors to trim their bets for an earlier than anticipated tightening. This, along with the ongoing decline in the US Treasury bond yields, further acted as a headwind for the greenback. Even a softer tone around the equity markets – amid worries about the continuous surge in new COVID-19 cases across Asia – did little to lend any support to the safe-haven greenback. On the other hand, the British pound was supported by an optimistic economic outlook amid the gradual easing of restrictions in the UK. In fact, Britain relaxed restrictions on its economy and social contact further, effective this Monday. Among other measures, people will be allowed to hug each other again and pubs and restaurants will be able to serve customers inside. This helped offset worries about the fast-spreading Indian variant of the virus. That said, uncertainty over the post-Brexit agreement on Northern Ireland held bulls from placing aggressive bets around the GBP/USD pair. Reports indicate that Ireland is increasingly concerned that British Prime Minister Boris Johnson wants to completely rewrite the Northern Ireland section of the Brexit deal. In the absence of any major market-moving economic releases from the UK or the US, it prudent to wait for some follow-through buying before positioning for any further appreciating move. Meanwhile, the market risk sentiment and the US bond yields might influence the USD price dynamics, which might provide some trading impetus. Technical levels to watch  

Over the past month, the US dollar has reversed most of its gains posted in the first quarter this year. The drivers of the FX market are steering tow

Over the past month, the US dollar has reversed most of its gains posted in the first quarter this year. The drivers of the FX market are steering towards expected policy normalisation but it is still a long journey. Economists at HSBC still expect modest USD weakness this year, but the greenback could outperform other currencies over the long run. USD could outperform other currencies over the long run “The belief that the global economy is gradually healing should imply that some future degree of monetary policy normalisation will eventually occur, which is then partly discounted by exchange rates today.” “The Federal Reserve (Fed) is only willing to change to a more hawkish stance if the rise in growth and inflation turns out to be durable rather than transitory. Nevertheless, the volatility in recent activity data and noisy inflation base effects imply that this probably will not become clear until later this year.” “As long as US fiscal and monetary stimulus is generating spill overs for the rest of the world, such that there is a synchronous global recovery, albeit at somewhat uneven speeds, the broad USD is to weaken modestly. The other thing to note is that vaccinations in other parts of the world are gradually catching up.” “While the USD is seen underperforming for now, we remain mindful of the conditions that could see it regain its momentum and leapfrog other currencies over the long run.”

EUR/CHF is bid above the 1.0905 six-month uptrend. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to advance

EUR/CHF is bid above the 1.0905 six-month uptrend. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to advance nicely from this level. March high was made at 1.1152 “EUR/CHF is underpinned by the 1.0915 June 2020 high and the 1.0905 six-month uptrend. We look for this to hold the downside and recover.” “A close above the 1.1075, the end of April high will target the 1.1151/52 March high and 200-week ma. Above here will target the 50% retracement of the entire move down from the 2018 peak at 1.1255.” “Longer-term, we target 1.1325.”  

Gold stands out with an upswing, trading above $1,850. As FXStreet’s Dhwani Mehta notes, XAU/USD’s bullish potential is intact despite the US dollar’s

Gold stands out with an upswing, trading above $1,850. As FXStreet’s Dhwani Mehta notes, XAU/USD’s bullish potential is intact despite the US dollar’s bounce. US dollar dynamics and Fed speak in focus for near-term trading impetus “Gold is benefiting from the risk-averse market conditions, thanks to the renewed worries about coronavirus restrictions in Asia. A major covid outbreak haunts Taiwan and Singapore while India and Japan struggle with rising cases and regional lockdowns.” “Dovish Fed expectations and concerns over dwindling Chinese economic recovery also keep the bullish undertone intact in gold. Gold investors now look forward to the Fedspeak and dollar dynamics amid a quiet start to the week.” “Gold prices have confirmed a rectangle breakout on the four-hour chart in early dealing, with additional upside seen towards $1880. However, with the Relative Strength Index (RSI) peeping into the overbought territory, the gold bulls could turn a bit cautious before resuming another leg higher.” “The immediate downside is likely to be cushioned at the pattern resistance now support at $1844. The mildly bullish 21-simple moving average (SMA) at $1831 could be the next significant cap.”  

After consolidating for the past two months, USD rates are starting to stir amidst more intense inflation debates – 10Y US-T yields swung from a low o

After consolidating for the past two months, USD rates are starting to stir amidst more intense inflation debates – 10Y US-T yields swung from a low of 1.46% to a recent high of 1.70%. Economists at DBS bank list five reasons why taper is coming, sticking to the view that 10Y US yields can touch 2% this year and head into the 2-2.5% range thereafter.  10Y US yields to touch 2% in 2021 “Financial conditions are benign. Stresses in the various markets are contained, with implied volatilities in equities and swaps on the low side. Credit and liquidity risks are extremely low in the money markets. Current levels of calm are comparable to 2017 when there was an ongoing global cyclical recovery.” “Vaccinations are going well in the Developed Market space. At the current pace of vaccination (about 10mn shots per week), the US would be on track to achieve herd immunity (close to 70% of population vaccinated) by July. This would allow segments of the economy that previously were unable to normalize to finally stage a meaningful recovery. Note that COVID-19 cases in the US have plummeted as vaccinations accelerate.” “Inflation is uncomfortably high. Sequential inflation of 0.8% MoM and a YoY figure of 4.2% can be difficult to ignore. We would note that core inflation is also much higher than what consensus expected. While April is just one data point, there are concerns that a broadening out of price pressures could take place in the coming months. While realized inflation is important, we do think that the Fed has to pay attention to more timely indicators. Supply shortages and artificial labour market tightness could drive these gauges higher, un-anchoring inflation expectations in the process.” “The labour market is strong, notwithstanding the payrolls stumble in April. To be sure, we are probably not at the Fed’s hurdle where taper is imminent. The economy has recovered about two-thirds of the jobs lost during the Pandemic and the U3 unemployment rate of 6% probably flatters the labour market situation. We reckon that actual unemployment is probably a tad above 8% but this adjusted figure can quickly fall if we get another 2-3 months of strong payrolls. This could set the stage for a Fed pivot in late 3Q. We would also note that a Pandemic crisis is different from a traditional economic or financial crisis.”  “There are signs of excess liquidity and that is probably contributing to froth in selected assets as short-term USD rates get anchored. It is probably easier to taper asset purchases to manage the unwanted influx of liquidity. In any case, UST issuances may have peaked with Pandemicrelated spending likely to ease towards the end of the year. There may not be as strong a need for the Fed to absorb incoming bond supply towards late 2021.” “We see compelling reasons for taper and expect the Fed to pivot (signal) later this year. We reiterate our above consensus 2% 10Y US yield forecast for 2021.”  

The USD/JPY pair edged lower heading into the European session and dropped to three-day lows, around the 109.15 region in the last hour. The pair stru

A combination of factors dragged USD/JPY lower for the third consecutive session on Monday.Friday’s disappointing US Retail Sales, sliding US bond yields continued undermining the USD.Persistent coronavirus jitters benefitted the safe-haven JPY and contributed to the selling bias.The USD/JPY pair edged lower heading into the European session and dropped to three-day lows, around the 109.15 region in the last hour. The pair struggled to capitalize on its modest intraday uptick, instead met with some fresh supply near mid-109.00s and has now drifted into the negative territory for the third straight session. Friday's disappointing US Retail Sales figures reaffirmed the Fed's dovish view and kept the US dollar bulls on the defensive. This, in turn, capped the upside for the USD/JPY pair. In fact, the headline sales remained virtually unchanged during the reported month, marking a sharp deceleration from March's upwardly revised reading of 10.7% (9.8% estimated previously). Adding to this, sales excluding autos decline 0.8% MoM in April, while the closely watched Retail Sales Control Group also fell short of market expectations and came in at -1.5%. Bearish traders further took cues from the ongoing decline in the US Treasury bond yields, which was seen as another factor that acted as a headwind for the USD. On the other hand, worries over the continuous surge in new coronavirus cases in Asia underpinned the safe-haven Japanese yen and further contributed to the USD/JPY pair's intraday decline back closer to the 109.00 round figure. There isn't any major market-moving economic data due for release from the US on Monday. Hence, the US bond yields will play a key role in influencing the USD price dynamics. Apart from this, the broader market risk sentiment will drive demand for the safe-haven JPY and allow traders to grab some short-term opportunities on the first day of a new trading week. Technical levels to watch  

USD/JPY saw a decent rebound off the 108.50 uptrend last week. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pai

USD/JPY saw a decent rebound off the 108.50 uptrend last week. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to reach the 110.97 March high once above the 109.96 April 9 high. Break below uptrend at 108.50 to alleviate upside pressure “USD/JPY last week eased back to and recovered from the 2021 uptrend at 108.50.”  “Attention is on the 109.96 April 9 high, which remains the barrier to the 110.97 March high and the 111.13/38 October 2018 low and mid-February 2019 high. Below 108.50 will alleviate immediate upside pressure for a slide back to the 107.48 April low.” “Our medium-term target is 112.23/50, which represents the April 2019 high, the 2020 high and a long-term Fibonacci retracement.”  

The greenback, in terms of the US Dollar Index (DXY), alternates gains with losses around the 90.30 region at the beginning of the trading week. US Do

DXY struggles for direction around 90.30 on Monday.US 10-year yields drift lower and approach the 1.60% mark.NY Empire State Index, NAHB Index, TIC Flows next on tap.The greenback, in terms of the US Dollar Index (DXY), alternates gains with losses around the 90.30 region at the beginning of the trading week. US Dollar Index looks to yields, data The index navigates the lower end of the recent range amidst inconclusive risk trends and the persistent corrective downside in yields of the US 10-year reference. In the meantime, the US economic outperformance plus renewed market chatter regarding higher inflation in the next months (particularly following the publication of April’s CPI las week) appear to contain further selling pressure around the buck for the time being, leaving the 90.00 neighbourhood as quite a tough support for dollar bears. In the US data space, the NAHB Index will take centre stage later in the NA session seconded by the NY Empire State Index and TIC Flows. What to look for around USD The index has fully faded the rally seen during March and returns to the vicinity of the psychological 90.00 neighbourhood despite the reluctance of US yields to grind lower. Looking at the broader scenario, the negative stance on the currency seems to prevail among market participants. This view has been exacerbated following April’s Payrolls, hurting at the same time the sentiment surrounding the imminent full re-opening of the US economy, which is in turn sustained by the unabated strength in domestic fundamentals, the solid vaccine rollout and once again the resurgence of the market chatter regarding an anticipated tapering. The latter comes in despite Fed’s efforts to talk down this scenario, at least for the next months.Key events in the US this week: NAHB Index (Monday) – Building Permits, Housing Starts (Tuesday) – FOMC Minutes (Wednesday) – Initial Claims, Philly Fed Index (Thursday) – Flash Manufacturing PMI, Existing Home Sales (Friday).Eminent issues on the back boiler: Biden’s plans to support infrastructure and families, worth nearly $4 trillion. US-China trade conflict under the Biden’s administration. Tapering speculation vs. economic recovery. US real interest rates vs. Europe. Could US fiscal stimulus lead to overheating? US Dollar Index relevant levels Now, the index is losing 0.04% at 90.27 and faces the next support at 89.98 (monthly low May 11) followed by 89.68 (monthly low Feb.25) and then 89.20 (2021 low Jan.6). On the other hand, a breakout of 90.90 (weekly high May 11) would open the door to 91.07 (100-day SMA) and finally 91.43 (weekly/monthly high May 5).

EUR/JPY is approaching tough resistance at 133.13/48. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to see

EUR/JPY is approaching tough resistance at 133.13/48. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to see some selling pressure at this point. Bullish while above the uptrend at 130.55 “EUR/JPY remains bid and is on course for 133.13/48, these are the highs from April 2018 and September 2018 and we suspect that they may provoke some profit-taking.”  “Our longer-term target is the 137.51 2018 high.”  “Uptrend support at 130.55 is reinforced by the 55-day ma at 130.37 and while above here, attention remains on the topside.”  

Fed officials continue to repeat the word transient with respect to inflation pressures. This has had a fair amount of success in depressing fears abo

Fed officials continue to repeat the word transient with respect to inflation pressures. This has had a fair amount of success in depressing fears about price pressures and reeling back moves in both market rates and the USD. That said, the re-inflation/inflation debate is unlikely to fade meaning that pockets of USD strength are likely in the coming months, according to Jane Foley Senior FX Strategist, Head of FX Strategy at Rabobank. Fed officials are sticking to the script “Almost irrespective of whether or not the Fed is correct in its assessment that this year’s inevitable spikes in inflation will pass, there are sufficient doubts over whether all price pressures will be fleeting to keep the market anxious. This suggests scope for choppy trading which implies that there are likely to be pockets of support for the USD in the coming months”   “In the bond market, a moderate move higher in real yields would generally be taken as a signal that the market is expecting a decent economic recovery, meaning that expectations about an increase demand will be outstripping those related to higher inflation. This scenario should therefore be broadly welcomed.” “Whichever side of the US inflation debate proves correct it is difficult to deny that the arguments are likely to prevail for some time. This suggests scope for choppy trading conditions in the weeks ahead and, if US real rates rise again, the possibility of another break below EUR/USD 1.20.”  

Biden’s infrastructure package is ambitious, but economists at Capital Economics doubt it will pass in its current form. If it did pass, the impact on

Biden’s infrastructure package is ambitious, but economists at Capital Economics doubt it will pass in its current form. If it did pass, the impact on energy markets could be large but they doubt it would be too significant for industrial metals markets. American Jobs Plan towould impact commodity markets through a variety of channels “It is unlikely the Plan will pass as a standalone bill, especially not in its current form. To do so, the President would have to garner support from at least 10 Republican senators or eliminate the filibuster, both of which appear unlikely. As a result, we think the most likely outcome is that the Plan is passed through budget reconciliation sometime after October this year, in a bill that would probably include aspects of the American Jobs Plan and Made in America Tax Plan.” “On the energy side, it would pose a significant downside risk to our long-term oil, natural gas and coal price forecasts through an accelerated adoption of electric vehicles and the replacement of fossil fuels in electricity generation. However, we are particularly sceptical about whether the carbon-free electricity generation target will end up being included in any final bill.” “While there could be a sizeable impact on the prices of nickel and cobalt from faster EV adoption, we think that the impact on most industrial metal prices would be fairly small. First, there is a lack of ‘shovel ready projects’ to build, which means that any boost to demand will only come to fruition at the tail-end of the Plan, when supply may have had time to adjust. And second, compared to some energy commodities, China is a significantly bigger end-user of most industrial metals than the US and the expected downturn there will more than offset any boost to US consumption, even if the American Jobs Plan is passed in full.”  

The USD/CAD pair retreated around 25-30 pips from daily tops and refreshed session lows in the last hour, with bears now eyeing weakness below the 1.2

USD/CAD continued with its struggle to register any meaningful recovery from multi-year lows.Dovish Fed expectations, sliding US bond yields weighed on the USD bulls and capped gains.Softer crude oil prices undermined the loonie and helped limit losses amid coronavirus jitters.The USD/CAD pair retreated around 25-30 pips from daily tops and refreshed session lows in the last hour, with bears now eyeing weakness below the 1.2100 mark. The pair struggled to capitalize on its modest Asian session uptick to the 1.2135 region and remained well within the striking distance of near six-year lows touched last week. A combination of factors held the USD dollar bulls from placing any aggressive bets and capped the upside for the USD/CAD pair. However, a softer tone around crude oil prices undermined the commodity-linked loonie and helped limit any deeper losses, at least for the time being. The USD was being weighed down by Friday's disappointing US Retail Sales data, which reaffirmed the Fed's dovish view and forced investors to trim their bets for an earlier than anticipated tightening. This, along with the ongoing decline in the US Treasury bond yields, further acted as a headwind for the greenback. That said, worries about the continuous surge in new coronavirus cases in Asia might extend some support to the safe-haven greenback. From a technical perspective, the recent price action over the past one week or so might still be categorized as consolidative. Apart from this, the USD/CAD pair's inability to register any meaningful recovery suggests that the near-term bearish trend might still be far from being over. This, in turn, indicates that the path of least resistance remains to the downside. Hence, any attempted recovery might still be seen as an opportunity for bearish traders. There isn't any major market-moving economic data due for release on Monday, either from the US or Canada, leaving the USD at the mercy of the US bond yields. Traders might further take cues from the broader market risk sentiment and oil price dynamics to grab some short-term impetus. The key focus, however, will remain on the release of FOMC monetary policy meeting minutes on Wednesday, which will be looked upon to determine the next leg of a directional move. Technical levels to watch  

The AUD/USD pair is accumulating losses on Monday in the early European session. The pair failed to capitalize on Friday’s gains and confided in a nar

AUD/USD remains on the downside in the European session.US dollar gains on market risk and geopolitical concerns.Mixed Chinese economic data weighs on the aussie.The AUD/USD pair is accumulating losses on Monday in the early European session. The pair failed to capitalize on Friday’s gains and confided in a narrow trade band between 0.7745-0.7785 for the time being. At the time of writing, the AUD/USD pair is trading at 0.7763, down 0.17% on the day. The Aussie pared some of the previous day’s gains on mixed Chinese economic data. Retail Sales in China disappointed the market as it grew 17.7% YoY in April as compared to 34.2% in  March, much below the market expectations of 24.9% growth estimates. The heavy deviation in the reading took a toll on the performance of the AUD against the US dollar, as China is the biggest market for  Australian exports. Meanwhile, the National Bureau of Statistics of China said on Monday that the Chinese economy maintained a steady pace of economic growth. The Industrial Output edged higher to 9% YoY in April and matched market expectations.  Additionally, retreating iron ore prices also drag the pair lower, as lower commodity prices directly affect the commodity-linked aussie. On the other hand, the US dollar gained on the market volatility amid escalating Middle East tensions, erasing some of Friday’s losses. The greenback index (DXY) gained 0.09% to 90.39 on Monday. The disappointing US Retail Sales data on Friday echoed the continuation of the Fed’s ultra-easy monetary policy, which drove investors away from the greenback on improved risk appetite. In the absence of any major fundamental catalyst, investors turn their attention to the Fed’s speech by Vice-Chairman Richard Clarida today at 14:05 GMT. As for now, the dynamics around the US dollar should keep the pair’s performance under control.
  AUD/USD Additional Levels  

EUR/USD is trading below 1.2150 amid the rush to the dollar and despite Europe's accelerating vaccination campaign. Perhaps not all euro bulls have be

EUR/USD is trading below 1.2150 amid the rush to the dollar and despite Europe's accelerating vaccination campaign. Perhaps not all euro bulls have begun the week with fresh energies, however, the shared currency is set to resume its gains for three reasons, as FXStreet’s Analyst Yohay Elam lays out.  Weaker US inflation fears “China reported an annual increase of 17.7% in April's Retail Sales data, substantially below an increase of roughly 25% projected. There is no commodity ‘supercycle’ without China – a rethink about inflation could embolden doves at the Fed and soften the hawks. Federal Reserve Vice-Chair Richard Clarida and several of his colleagues are set to speak out later in the day and they will likely repeat their message that inflation is transitory. That could weigh on the dollar.”  “The old continent has been accelerating its vaccination campaign, reaching over a third of the population with at least one dose. Moreover, the campaign is bearing fruit, pushing infections sharply lower. That is allowing countries to open up and visitors from abroad to revive the beaten tourism industry.”  “The 4-hour chart is showing that momentum has turned positive. Moreover, the pair trades above the 50 and 100 simple moving averages (SMAs). Some resistance awaits at 1.2150, which was the peak in late April and also on Monday. It is followed by 1.2180, which capped EUR/USD last week. Some support is at the daily low of 1.2125, followed by 1.2110, which held it down last week.”

Gold managed to stage a rebound and rose to $1,840, closing in the positive territory for the second straight week, after coming under strong bearish

Gold managed to stage a rebound and rose to $1,840, closing in the positive territory for the second straight week, after coming under strong bearish pressure on Wednesday. Key resistance and support levels for gold remain intact, FXStreet’s Eren Senvgezer briefs. US inflation expectations and T-bond yields continue to drive XAU/USD movements “Investors will remain focused on developments surrounding inflation expectations. The inverse correlation between the gold price and the 10-year US Treasury bond yield is expected to remain intact.” “Strong resistance seems to have formed at $1,850, where the 200-day SMA and the Fibonacci 61.8% retracement of the January-March downtrend meets. A daily close above that level could attract buyers and open the door for additional gains toward $1,860 (static level) and $1,875 (static level, January 21 high, January 29 high). “ “$1,820 (Fibonacci 50% retracement) could be seen as the initial support ahead of $1,800 (psychological level, 100-day SMA, 20-day SMA). With a convincing drop below the latter, additional losses toward $1,780 (Fibonacci 38.2% retracement) could be witnessed.” “The Relative Strength Index (RSI) indicator stays between 60 and 70, suggesting that XAU/USD has more room on the upside before becoming technically overbought.”  

Switzerland Producer and Import Prices (MoM): 0.7% (April) vs 0.6%

India WPI Inflation above forecasts (9.05%) in April: Actual (10.49%)

Switzerland Producer and Import Prices (YoY): 1.8% (April) vs -0.2%

UOB Group’s FX Strategists now see USD/JPY trading between 108.50 and 109.95 in the next weeks. Key Quotes 24-hour view: “USD traded mostly sideways b

UOB Group’s FX Strategists now see USD/JPY trading between 108.50 and 109.95 in the next weeks. Key Quotes 24-hour view: “USD traded mostly sideways between 109.19 and 109.65 last Friday. Momentum indicators are mostly neutral and further sideway-trading would not be surprising. Expected range for today, 109.05/109.60.” Next 1-3 weeks: “Our latest narrative was from last Wednesday (12 May, spot at 108.70) where we highlighted that ‘downward bias is intact but prospect for USD to move to 108.20 has diminished somewhat’. However, USD subsequently rebounded strongly but so far has not been able to build on its advance. In other words, USD is likely not ready to move higher in a sustained manner. From here, USD is more likely to consolidate and trade between 108.50 and 109.95.”

According to advanced prints from CME Group, open interest in Natural Gas futures markets went up for the second straight session on Friday, this time

According to advanced prints from CME Group, open interest in Natural Gas futures markets went up for the second straight session on Friday, this time by around 1.4K contracts. Volume, on the other hand, dropped by around 46.1K contracts, reversing the previous day’s build. Natural Gas still stays capped by $3.00 Prices of Natural Gas failed once again to test/surpass the key $3.00 hurdle on Friday, closing the session with modest losses. The downtick was accompanied by rising open interest, indicative that a probable correction lower lies ahead in the very near-term. On the flip side, the upside momentum is expected to gather extra steam once the $3.00 mark per MMBtu is cleared.

Japan Machine Tool Orders (YoY) rose from previous 65% to 120.8% in April

EUR/GBP struggles to extend the previous week’s recovery moves above 0.8600, around 0.8610 ahead of Monday’s European session. Although bullish MACD s

EUR/GBP defends 0.8600 despite failures to back the bulls.Confluence of 200-SMA, 50% Fibonacci retracement guards immediate upside.Bears have a bumpy road to the south, 0.8590 offers nearby support.EUR/GBP struggles to extend the previous week’s recovery moves above 0.8600, around 0.8610 ahead of Monday’s European session. Although bullish MACD signals back rebound from monthly low, the early May’s lows surrounding 0.8625 tests intraday buyers ahead of a 200-SMA and 50% Fibonacci retracement convergence near 0.8640. Even if the EUR/GBP prices cross the 0.8640 hurdle, 61.8% Fibonacci retracement of the pair’s fall from late April, around 0.8660, will be another key barrier before the monthly top of 0.8700. Should EUR/GBP fails to stay on the road to recovery, the 0.8600 round figure will precede multiple supports around the 0.8590 level to test the short-term downside. Additionally, the monthly low near 0.8560 precedes the mid-March bottom surrounding 0.8530 and the 0.8500 threshold, not to forget the yearly low of 0.8472, offer a troubled journey to the south. EUR/GBP four-hour chart Trend: Further recovery expected  

In opinion of FX Strategists at UOB Group, AUD/USD is now forecast to navigate between 0.7680 and 0.7830 in the next weeks. Key Quotes 24-hour view: “

In opinion of FX Strategists at UOB Group, AUD/USD is now forecast to navigate between 0.7680 and 0.7830 in the next weeks. Key Quotes 24-hour view: “AUD rose to 0.7788 last Friday before easing off. Despite the relatively strong advance, upward momentum has not improved by much. AUD is unlikely to advance much further. For today, AUD is more likely to trade between 0.7730 and 0.7790.” Next 1-3 weeks: “AUD dropped sharply to 0.7688 last Thursday (13 May) before rebounding strongly on Friday. The sharp but short-lived swings have resulted in a mixed outlook and AUD is likely to trade within a broad 0.7680/0.7830 range for now.”

CME Group’s flash data for Crude Oil futures markets noted open interest reversed the previous drop and went up by around 30.2K contracts at the end o

CME Group’s flash data for Crude Oil futures markets noted open interest reversed the previous drop and went up by around 30.2K contracts at the end of last week. On the opposite direction, volume reversed five consecutive daily builds and retreated by around 217.5K contracts. WTI looks consolidative very near-term Prices of the WTI closed last week on a positive footing amidst increasing open interest. The uptick, however, was within the broad choppy performance of open interest, which should be supportive of further rangebound in the very near-term. On the upside, there are no hurdles of note until the YTD high near the $68.00 mark per barrel (March 8).  

Here is what you need to know on Monday, May 17: The week begins with a moderate risk-off mood as Chinese data has missed estimates and Friday's miss

Here is what you need to know on Monday, May 17:  The week begins with a moderate risk-off mood as Chinese data has missed estimates and Friday's miss in US retail sales. Tesla's Musk hinted he is selling Bitcoin, triggering a crypto sell-off. A long list of Fed speakers is eyed.S&P 500 futures are down on Monday and the safe-haven dollar is rising in a risk-off mood. China reported an increase of 17.7% YoY in April's retail sales, well below expectations. The parallel release in the US also missed estimates by remaining flat last month. The publication included a sharp drop in the Control Group of sales and was accompanied by a fall in consumer confidence. On the other hand, the University of Michigan's consumer sentiment data also showed a leap in inflation expectations, adding to concerns that the Federal Reserve would be forced to raise rates sooner rather than later. Vice-Chair Richard Clarida and several of his colleagues are scheduled to speak later in the day. Can the Fed keep US rates in check?EUR/USD is trading below 1.2150 amid the rush to the dollar and despite Europe's accelerating vaccination campaign. GBP/USD is also pressured under 1.41, shrugging off Britain's new step in reopening, which includes international flights. COVID-19 cases have risen in Asia, which had spared the worst of the first wave of the disease. An outbreak in Taiwan is wracking havoc, while China has ramped up its immunization campaign. Elon Musk, the founder of Tesla and SpaceX, spent his weekend bashing Bitcoin, also hinting his company is selling its holdings in the granddaddy of cryptocurrencies. BTC/USD extended its falls, nearing $42,000. Ethereum was dragged lower to below $3,400 and XRP to under $1.40. Dogecoin, which Musk has been hailing, is also on the back foot, changing hands at around $0.48.  See Bitcoin price extends sell-off after Elon Musk implies Tesla may have sold BTC holdingsGold stands out with an upswing, trading above $1,850. Several metals such as copper and iron ore advanced last week.  Week Ahead on Wall Street (SPX, QQQ): Don’t fight the Fed continues to be the narrative as data disappoints

One-month risk reversal of USD/CHF, a gauge of calls to puts, rose the most in May by the end of Friday’s trading, per the latest data from Reuters. T

One-month risk reversal of USD/CHF, a gauge of calls to puts, rose the most in May by the end of Friday’s trading, per the latest data from Reuters. This goes against the USD/CHF rebound from the monthly low, up 0.14% intraday near 0.9025 by the press time of early Monday. Risk reversals flashed +0.025 figure for Friday, suggesting the buyers are gradually firming up controls and/or a short-covering move is building. Technically, USD/CHF remains pressured unless crossing a confluence of 100-day and 200-day SMA around 0.9080-85. Meanwhile, 0.8990 holds the key to the fresh downside.

The prospects for the continuation of the uptrend in Cable appear mitigated below the 1.4000 yardstick, noted FX Strategists at UOB Group. Key Quotes

The prospects for the continuation of the uptrend in Cable appear mitigated below the 1.4000 yardstick, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “The rapid advance in GBP to 1.4111 last Friday is overbought and this coupled with waning momentum suggests GBP is unlikely to advance much further. GBP is more likely to trade with a downward bias but any decline is unlikely to threaten the support at 1.4040 (1.4060 is already quiet a strong support level). Resistance is at 1.4100 followed by 1.4115.” Next 1-3 weeks: “Our latest narrative was from early last week where we highlighted that GBP ‘is still strong and the focus is at the year-to-date high of 1.4235’. Since then, GBP has not been able to make much headway on the upside. We continue to hold the same view for now but GBP has move and stay above 1.4160 within these few days or the prospect for further GBP strength would diminish quickly. Conversely, a breach of the ‘strong support’ level at 1.4000 would indicate that the upside risk has dissipated.”

These are the main highlights of the CFTC Positioning Report for the week ended on May 11th: Speculators markedly increased their gross longs position

These are the main highlights of the CFTC Positioning Report for the week ended on May 11th: Speculators markedly increased their gross longs positions in EUR for the fourth consecutive week, taking net longs to levels last seen in early March. Increased optimism on a full re-opening of the economy appears supported by the improved pace of the vaccination campaign, all amidst the steady hand of the ECB. Net longs in USD ticked higher to 2-week highs along with rising open interest and the decline in the US Dollar Index (DXY). Diminishing US yields coupled with the confirmation of the dovish stance at the Fed’s event in late April weighed on the buck. Occasional bouts of strength in the dollar came on the back of the sharp rebound in volatility (gauged by the VIX index).GBP gross longs rose considerably and took the net position to 2-week highs. Rising hopes on a strong recovery of the UK activity, the firm pace of the vaccine rollout and the shift of the Bank of England (BoE) to a less-dovish stance have all lent support to the quid. The uptick in Cable to levels beyond 1.4100 echoes this view along with the selling pressure in the dollar. Net longs in Gold increased to levels last seen in late February. The downtrend in US yields lent wings to the precious metal and finally pushed the ounce troy above the key $1,800 mark.

Traders increased their open interest positions for the second session in a row on Friday, this time by around 9.5K contracts considering preliminary

Traders increased their open interest positions for the second session in a row on Friday, this time by around 9.5K contracts considering preliminary readings from CME Group. Volume, instead, shrunk for the second consecutive day, now by around 45.3K contracts. Gold faces interim hurdle around $1,880Gold prices extended the upside momentum on Friday amidst rising open interest, which is indicative of further gains in the very near-term. That said, a sustainable breakout of the 200-day SMA ($1,846) should sustain the continuation of the uptrend, with the next minor resistance around $1,880 per ounce troy (tops seen in late January).  

Palladium (XPD/USD) defends $2,900, up 0.38% intraday around $2,908, during early Monday. The precious metal recently crossed a one-week-old falling t

Palladium picks up bids after crossing near-term key hurdle.Key Fibonacci retracement, HMA stand tall to test upside.Momentum line suggests weakness in the recent upside trend.Palladium (XPD/USD) defends $2,900, up 0.38% intraday around $2,908, during early Monday. The precious metal recently crossed a one-week-old falling trend line resistance, now support. However, downbeat Momentum may stop the XPD/USD bulls from crossing the $2,935-40 resistance area comprising 61.8% Fibonacci retracement of May 04-13 downside, as well as 200-HMA. Also acting as upside barriers are the levels marked during the last week surrounding $2,960 and the $3,000, not to forget the record top near $3,020. Meanwhile, pullback moves below the immediate support line, previous resistance, near $2,900 have multiple supports around $2,890 and $2,850 before directing Palladium sellers toward the monthly bottom close to $2,805. The bearish impulse may gain momentum and test March’s high near $2,755 on the break of $2,805. Palladium hourly chart Trend: Further recovery expected  

Extra gains seen in EUR/USD above the 1.2180 levels, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “EUR rose to 1.2149 last Friday b

Extra gains seen in EUR/USD above the 1.2180 levels, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “EUR rose to 1.2149 last Friday before closing on a firm note at 1.2140 (+0.51%). Further advance is not ruled out but last week’s high at 1.2180 is unlikely to come into the picture (1.2160 is already quite a strong level). On the downside, a breach of 1.2100 (minor support is at 1.2120) would indicate that the current upward pressure has eased.” Next 1-3 weeks: “Last Monday (10 May, spot at 1.2165), we highlighted that ‘while EUR could move above 1.2200, the prospect for a rise to 1.2240 is not that high for now’. Since then, EUR has not been able to make much headway on the upside. Upward momentum is lackluster and EUR has to close above the major resistance at 1.2180 before a sustained advance can be expected. The prospect for EUR to close above 1.2180 is not high for now but it would remain intact as long as it does not move below 1.2065 within these several days.”

Asian shares struggle for clear direction between Friday’s upbeat Wall Street performance and the recent mild losses of S&P 500 Futures amid a quiet M

Asian equities fail to track Wall Street’s gains as virus woes battle China’s downbeat economics.Six prefectures in Japan escalate covid-led restrictions on Sunday, doubts over Olympics grow.Uneven vaccinations, reflation fears and geopolitical risks also test market sentiment.Fed keeps rejecting the pressure to adjust monetary policy amid mixed data.Asian shares struggle for clear direction between Friday’s upbeat Wall Street performance and the recent mild losses of S&P 500 Futures amid a quiet Monday. In addition to the broad theme of the coronavirus (COVID-19) resurgence in Asia and inflation fears in the West, China’s April month Retail Sales and Industrial Production offer extra filters to the market moves, making it harder to portray unidirectional momentum. That said, MSCI’s index of Asia-Pacific shares outside Japan drops 0.15% on a day while Japan’s Nikkei 225 marks 1.30% intraday loss by the press time. Further, Chinese stocks remain on the front foot, up an average +1.0%, as downbeat economics reject odds against the People’s Bank of China’s (PBOC) easy monetary policy. Elsewhere, Australia’s ASX 200 gains 0.30% as gains from Beijing counter fears of escalating Aussie-China tussles. Though, New Zealand’s NZX 50 benefits from upbeat visitor arrivals to better copy the dragon nation’s moves. Furthermore, Hang Seng follows China but South Korea and Indonesia remain pressured amid the covid woes at home, also due to slow vaccinations. Additionally, India’s BSE Sensex, however, prints mild gains even as covid concerns join cyclone Taute. It’s worth mentioning that markets in the US cheered downbeat Retail Sales, Michigan Consumer Sentiment Index and Industrial Production data on Friday as the same helped the US Federal Reserve (Fed) to defend the easy money policies. Even so, the S&P 500 Futures and the US 10-year Treasury yields remain pressured, which in turn helps the US dollar index (DXY) while writing. Moving on, market sentiment can keep following the inflation and covid headlines for fresh impulse whereas the geopolitical tussles in the Middle East can offer an extra catalyst to the traders.

A mild bid tone around the US dollar keeps GBP/USD in a consolidation mode below 1.4100 in the early European session. The pair refreshed the daily hi

GBP/USD maintains a bearish tone in the early European session.A modest rebound in the US dollar keeps the advance limited for the pair.New COVID-19 variant might disrupt the UK's plans for easing restrictions.A mild bid tone around the US dollar keeps GBP/USD in a consolidation mode below 1.4100 in the early European session.  The pair refreshed the daily high’s near 1.4110, having touched the intraday low at 1.4078, now bouncing back to 1.4090. The US dollar index (DXY), which tracks the greenback performance against its counterparts, rose to 90.38, with modest gains at 0.8%.  The index lost ground on Friday post US Retail Sales data, which disappointed the market expectations of a1% rise. The sluggish data reaffirmed the Fed’s commitment to stick to its current monetary policy, owing to the uneven economic recovery. This, in turn, made the US dollar less attractive to investors. Meanwhile, the escalated Middle East tensions offered some constructive bids for the greenback at the start of the new week, which kept the gains in the pair limited.
On the other hand, the UK Prime Minister Boris Johnson said on Friday that the new COVID-19 strain, the first detected in India, could pose a serious threat on stage four easing restrictions in June. He expressed his concerns over the speed of the transmission of the new variant. In addition to that, the time interval between the two-covid vaccine shots will now be decreased from the current 8 weeks to 12 weeks.  Lately, the cable also benefited from some Brexit optimism after UK-Ireland agreed to work smoothly together on post-Brexit trade. As for now, traders turn their attention to the Fed and Bank of England official’s upcoming speeches in the economic docket.  GBP/USD Additional Levels  

USD/INR holds lower ground near 73.25, down 0.05% intraday, amid the initial Indian trading session on Monday. The Indian rupee pair failed to keep th

USD/INR battles six-week-old horizontal support amid downward sloping Momentum.Failures to stay beyond key Fibonacci retracement levels, sustained trading below 200-SMA favor bears.USD/INR holds lower ground near 73.25, down 0.05% intraday, amid the initial Indian trading session on Monday. The Indian rupee pair failed to keep the bounce off short-term key horizontal support during the last week and the downbeat Momentum line also backed the resulted weakness, which in turn keeps USD/INR bears hopeful. However, a clear downside break of 73.20 becomes necessary for the sellers before targeting the 73.00 threshold, not to forget the late March tops surrounding 72.70. It should, however, be noted that March’s low near 72.25 and February’s bottom close to 72.17 may test the USD/INR bears before directing them to the 72.00 round figure. Alternatively, 61.8% Fibonacci retracement of March-April upside and 200-SMA, respectively near 73.55 and 74.20, become the key upside hurdles to watch during the quote’s fresh run-up, not to forget the recent highs near 73.70. Overall, USD/INR remains bearish but the sellers seem tired of late. USD/INR four-hour chart Trend: Bearish  

EUR/USD drops back towards the intraday low of 1.2129, down 0.14% on a day, heading into Monday’s European open. In doing so, the currency major pair

EUR/USD fades bounce off intraday low, snaps two-day uptrend.Risk dwindles amid economic concerns over China, UN headlines.US data helped Fed to defend an easy money policy, for now.Fedspeak, geopolitics and second-tier US economics should offer fresh impulse.EUR/USD drops back towards the intraday low of 1.2129, down 0.14% on a day, heading into Monday’s European open. In doing so, the currency major pair consolidates gains earned during the previous two-day run-up amid the US dollar’s corrective pullback. The US dollar index (DXY) rises 0.10% to 90.38 by the press time as market sentiment seeks clear direction after the latest optimism favored bulls. Also challenging the mood could be the downbeat data from China as well as the one-week-old Israel-Palestine tussles. Although Friday’s downbeat US Retail Sales and Michigan Consumer Sentiment Index, not to forget Industrial Production, saved the Fed policymakers from another laborious day. Markets players reassess the US central bank’s rejection to tapering and/or rate hike odds afterward. Further, comments from China’s National Bureau of Statistics (NBS) suggesting economic recovery remains uneven, mainly due to the recently sluggish Retail Sales and Industrial Production, also weigh on the sentiment. Elsewhere, the United Nations (UN) rejection to any direct meddling in Gaza, due to the US as per China, joins the coronavirus (COVID-19) woes in Asia and uneven vaccinations, not to forget covid variant woes in the West, to exert additional downside pressure on the previous optimism. It should, however, be noted that the Fedspeak suggesting the need for “multiple data of more months” for any policy adjustments seem justified, which in turn keeps bears cautious. Amid these plays, S&P 500 Futures print mild losses whereas the US 10-year Treasury yields drop 1.5 basis points (bps) to 1.62% by the press time. Looking forward, New York Empire State Manufacturing PMI and US NAHB Housing Market Index for May, expected 24 and 83 versus 26.3 and 83 priors in that order, will decorate the calendar. However, major attention will be given to the Fedspeak. Fed’s Vice Chairman Richard Clarida is likely to reiterate his cautious optimism while defending the no policy adjustments, in absence of which the EUR/USD may witness further downside towards short-term key support. Technical analysis A pullback from the 1.2180 hurdle favors EUR/USD sellers targeting an ascending support line from March-end, around 1.2080.  

The NZD/USD pair maintains a subdued tone and trades on a lower note in the Asian session. Having opened higher, the pair failed to hold onto the posi

NZD/USD is trading decisively below the session’s high in the Asian session.USD gains strength on geopolitical and market risk concerns.Mixed Chinese economic data also weigh on the pair.The NZD/USD pair maintains a subdued tone and trades on a lower note in the Asian session. Having opened higher, the pair failed to hold onto the positive trajectory and touched the intraday low at 0.7215. At the time of writing, the NZD/USD pair is trading at 0.7223, down 0.39% on the day. The mixed Chinese economic data took a toll on the Kiwi, being China's biggest trading partner. The slowdown in the Chinese economy indirectly affects the NZD sentiment. China’s Retail Sales rose to 17.1% in April YoY below the previous 34.2% jump and much below the market expectations of 24.9% growth. Industrial Production jumped to 9.8% matching the market expectations. The mixed data weighed on the sentiments surrounding the Kiwi and pushed the pair lower. Meanwhile, on the domestic front, the Business NZ performance of Service Index rose to 61.2 in April as compared to 52.9 in the previous month. Overseas visitor arrivals in New Zealand fell 97.4% YoY. On the other hand, the US dollar index rose modestly and stands around 90.38 with 0.03% gains. The downbeat US Retail Sales data released on Friday failed to encourage the market, while the University of Michigan’s Consumer Sentiment fell below forecasts due to rising inflation. Against this backdrop, the escalating tension in the Middle East aided the attractiveness of the greenback on its safe haven appeal. In the latest development, US Secretary of State Antony Blinken discussed the concerns in Israel, the West Bank, and GAZA with Qatari, Egyptian, and Saudi foreign ministers on Sunday, as per Reuters. As for now the dynamics around the US dollar continues to influence the pair’s performance for the time being.  NZD/USD Additional Levels
 

S&P 500 Futures mark the first downside in three days while taking offers around 4,162, down 0.18% intraday, during early Monday. The risk barometer r

S&P 500 Futures remain depressed near intraday low.China data disappoints, UN refrains from Gaza meddling.Wall Street cheered downbeat US data, Fed’s defense of easy money.Fedspeak, geopolitics will offer fresh impulse amid a light calendar.S&P 500 Futures mark the first downside in three days while taking offers around 4,162, down 0.18% intraday, during early Monday. The risk barometer recently reacted to downside data from China as well as geopolitical headlines from the Middle East while reversing recent gains. With the downbeat Industrial Production and Retail Sales joining chip shortage, China’s National Bureau of Statistics (NBS) said, “China's economic recovery remains uneven.” This contrasts with upbeat signals from the US and the UK that have earlier boosted market sentiment. Read: China’s NBS: Economic recovery remains uneven Also on the risk-negative side is the United Nations (UN) rejection to intermediate directly in the Israel-Palestine tussle, for which China alleges the US. This could keep the one-week-old war extended and risk more lives in the Middle East, indirectly helping oil prices. Elsewhere, chatters surrounding extension to China’s trade-negative measures for Australia and the Fed’s battle versus inflation keep the traders troubled after witnessing risk-on mood during Friday. US Retail Sales and Michigan Consumer Sentiment Index helped the US Federal Reserve (Fed) policymakers to defend easy money policies, turning down the tapering and/or rate hikes woes, on Friday. This helped Wall Street benchmarks while weighing on the US dollar index (DXY) and the Treasury yields. It’s worth mentioning that the US 10-year Treasury yields remain pressured around 1.62% but the DXY consolidates Friday’s losses around 90.40 by the press time. Moving on, multiple Fed policymakers are up for speeches and will be observed for fresh direction. Also, the ongoing battle in Gaza and China’s recently downbeat signals can weigh on the market sentiment.

Following the release of the April activity numbers, China’s National Bureau of Statistics (NBS) released a statement, via Reuters, expressing their a

Following the release of the April activity numbers, China’s National Bureau of Statistics (NBS) released a statement, via Reuters, expressing their assessment of the economy. China's economy showed steady improvement in April. Foundation for economic recovery not solid. New problems in economy emerging. China will keep its economic operations within a reasonable range. China's economic recovery remains uneven. AUD/USD remains depressed around mid-0.7700s on downbeat China data

US dollar index (DXY) stays firmer around 90.40, up 0.11% intraday, while consolidating Friday’s losses during early Monday. Although MACD seems to re

DXY picks up bids to refresh intraday high, consolidates Friday’s losses.MACD teases bulls but multiple hurdles to the north keep bears hopeful.US dollar index (DXY) stays firmer around 90.40, up 0.11% intraday, while consolidating Friday’s losses during early Monday. Although MACD seems to return in favor of the bulls, 100-HMA and previous support line from May 11, respectively around 90.45 and 90.58, tests the short-term corrective pullback of the greenback gauge. Also, 200-HMA and a two-week-old horizontal area, near 90.70 and 90.90 in that order, add to the upside filters while challenging the buyers. On the contrary, Friday’s low near 90.30 can serve as a trigger to a fresh downside towards the multi-day low near the 90.00 threshold. However, any further weakness past-90.00 will not hesitate to challenge February’s low near 89.68. DXY hourly chart Trend: Bearish  

The AUD/JPY cross is trading in negative territory on the first day of the fresh week. The cross opened above the 85 mark. However, not able to hold o

AUD/JPY accumulates losses in the Asian session.More downside if price breaks below 84.70Oversold momentum oscillator caution on aggressive bids.The AUD/JPY cross is trading in negative territory on the first day of the fresh week. The cross opened above the 85.00 mark. However, not able to hold onto the gains and move south while touching the session’s low at 84.74. At the time of writing, the AUD/JPY cross is trading at 84.80, down 0.25% on the day. AUD/JPY 4-hour chart On the 4-hour chart, the cross has been accumulating losses near the 85.15 mark. The cross approaches the 20-hour Simple Moving Average (SMA) at 84.76. If price breaks below the mentioned level, then the next stop for price would be the 84.55 horizontal support level. Market participants would next target for Thursday’s low at 84.29. The oversold Moving Average Divergence (MACD) indicator suggests the stretched selling opportunities. Any uptick could reverse price towards the 84.95 horizontal resistance zone followed by Wednesday’s high at 85.26. The next area of resistance could be Tuesday’s high at 85.44. AUD/JPY Additional Levels
   

AUD/USD takes offers around 0.7750, down 0.31% intraday, as data from largest customer China disappoints Aussie traders during early Monday. The pair’

AUD/USD refreshes intraday low as China flashes weak economics.China’s Retail Sales drop to 17.7%, Industrial Production eases to 9.8% in April.Mixed risk catalysts, trade tussle with China earlier snapped two-day uptrend.Inflation concerns, geopolitical updates can entertain traders amid a light calendar.AUD/USD takes offers around 0.7750, down 0.31% intraday, as data from largest customer China disappoints Aussie traders during early Monday. The pair’s downside could also be termed as a consolidation to Friday’s heavy run-up, earlier backed by the risk-on mood, amid mixed sentiment. China Retail Sales slip beneath 34.2% prior and 24.9% forecast to 17.7% YoY whereas Industrial Production matches 9.8% market consensus versus 14.1% previous readouts. Read: Chines data dump misses expectations, AUD a touch softer Other than the scheduled data, mixed plays between the geopolitical tussles in the Middle East and fears of escalating Aussie-China tension, as signaled by Friday’s WoodMackenzie report, also trouble the AUD/USD bulls. Although the United Nations (UN) refrained from any direct meddling into the Gaza affair, China blames the US for the same tames the upbeat sentiment. Also on the risk-negative side were fears that China’s informal ban on Aussie coal imports will stay until 2022. Elsewhere, the reflation woes remain on the table but the Fedspeak seems successful in defending the easy money policies after Friday’s downbeat US data. Additionally, the coronavirus (COVID-19) troubles in Asia contrast faster vaccinations in the West and hopes of stronger economic recovery in the UK and the US. Amid these plays, S&P 500 Futures and Australia’s ASX 200 both print mild gains by the press time. However, the US dollar index (DXY) consolidates Friday’s losses while the US 10-year Treasury yield remains pressures around 1.62% while writing. Moving on, a light calendar can keep AUD/USD traders searching for clues. However, headlines concerning inflation and Fed’s next move, not to forget geopolitics and trade, could offer intermediate moves. Overall, US dollar weakness may keep AUD/USD buyers hopeful unless any extreme risk-off mood, which is less likely. Technical analysis Unless breaking a confluence of 50-day and 100-day SMA around 0.7710-20, AUD/USD stays directed towards 0.7820 hurdle, comprising multiple tops marked since January. However, sluggish oscillators indicate weakness in short-term trading momentum.  

China’s April activity data has been released with a focus on the Retail Sales and Industrial Production data in the main. Chinese data arrived as fol

China’s April activity data has been released with a focus on the Retail Sales and Industrial Production data in the main. Chinese data arrived as follows: Chinese Surveyed Jobless Rate Apr: 5.1% (exp 5.2%; prev 5.3%). Chinese Fixed Assets Ex-Rural YTD (YoY) Apr: 19.9% (exp 20.0%; prev 25.6%) - Property Investment YTD (YoY) Apr: 21.6% (exp 20.0%; prev 25.6%). Chinese Retail Sales (YoY) Apr: 17.7% (exp 25.0%; prev 34.2%) - Retail Sales YTD (YoY) Apr: 29.6% (exp 31.9%; prev 33.9%). Chinese Industrial Production (YoY) Apr: 9.8% (exp 10.0%; prev 14.1%) - Industrial Production YTD (YoY) Apr: 20.3% (exp 21.1%; prev 24.5%) Analysts at Westpac explained, prior to the release, that the momentum will remain strong with capacity and income gaining at a robust pace. AUD/USD update Technically, the price is on the verge of a significant correction to test the 61.8% Fibonacci on the daily time frame:       About the Retails Sales report The Retail Sales report released by the National Bureau of Statistics of China measures the total receipts of the retailed consumer goods. It reflects the total consumer goods that the various industries supply to the households and social groups through various channels. It is an important indicator to study the changes in the Chinese retail market and reflecting the degree of economic prosperity. In general, A high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY.
 

China Fixed Asset Investment (YTD) (YoY) above forecasts (19%) in April: Actual (19.9%)

China Industrial Production (YoY) meets forecasts (9.8%) in April

China Retail Sales (YoY) below expectations (24.9%) in April: Actual (17.7%)

The market is in favour of the bulls at this stage following a full-on sure to the downside. The following illustrates the daily support vs the 4-hour

EUR/NZD bulls are moving in at this juncture after a significant correction.Bulls will look for an upside continuation to break the highs.The market is in favour of the bulls at this stage following a full-on sure to the downside. The following illustrates the daily support vs the 4-hour resistance that needs to give for the bulls to be back in full control: Daily chart 4-hour chart The bulls have work to do still but a break of the 10-EMA on the 4-hour chart will be significant and make for a compelling case to the upside.     

USD/CAD battles short-term key resistance while taking rounds to 1.2120, up 0.13% intraday, during early Monday. The Loonie pair’s rebound from one-we

USD/CAD consolidates Friday’s losses, recently easing from intraday top.Bullish chart pattern needs validation from 200-HMA, one-week-old horizontal line.Upbeat Momentum backs the buyers, sellers have a bumpy road ahead.USD/CAD battles short-term key resistance while taking rounds to 1.2120, up 0.13% intraday, during early Monday. The Loonie pair’s rebound from one-week-old horizontal support zone, portrayed on Friday, takes clues from an upbeat Momentum indicator to back the bulls. However, a clear break above 1.2125 isn’t enough to confirm the pair’s rally as 200-HMA and multiple resistances from May 06, respectively near 1.2160 and 1.2200, will test the USD/CAD buyers afterward. Meanwhile, pullback moves could retest the 1.2100 threshold before Friday’s low near 1.2080 challenges the quotes’ further weakness. Also acting as the key downside filter is the support line of the falling wedge formation, formed since last Thursday, as well as the recently flashed multi-month low, near 1.2065 and 1.2045 in that order. To sum up, USD/CAD portrays a corrective pullback that needs validation. USD/CAD hourly chart Trend: Further recovery expected  

The AUD/USD pair is accumulating losses on the first day of the week in the Asian session. The pair opened higher, albeit frizzels rather quickly to t

AUD/USD lost previous week momentum in the Asian session.More downside on the cards if price breaks below 0.7750.Negative MACD tilts in favor of the downward momentum.The AUD/USD pair is accumulating losses on the first day of the week in the Asian session. The pair opened higher,  albeit frizzels rather quickly to touch the session’s low at 0.7756. At the time of writing, the AUD/USD pair is trading at 0.7758, down 0.24% on the day. AUD/USD daily chart On the daily chart, the pair is consolidating near the 20-day Simple Moving Average (SMA) at 0.7757. If price breaks below the mentioned level, then the next stop for it would be the 0.7720 horizontal support level followed by Thursday's low at 0.7687. The receding Moving Average Convergence Divergence (MACD) indicator signals at more downside price action towards the 0.7650 horizontal support level. Alternatively, on moving higher, the first area of resistance could be the 0.7800 horizontal resistance zone followed by Wednesday’s high at 0.7847 for AUD/USD bulls. The next area of the resistance would be the February 26 high at 0.7884. AUD/USD Additional Levels
 

China House Price Index : 4.8% (April) vs 4.6%

Early Monday in Asia, the Financial Times (FT) came out with headlines suggesting online job advertisements in the UK’s hospitality sector jump above

Early Monday in Asia, the Financial Times (FT) came out with headlines suggesting online job advertisements in the UK’s hospitality sector jump above pre-pandemic levels for the first time since the start of the crisis. The analysis depends upon the Adzuna data while saying, “The total number of vacancies had risen 18 percent in the same period, and was ‘approaching the milestone of 1.0 million’.” The report also mentions, “The rush to hire goes well beyond the sectors that are reopening. A monthly survey by the Chartered Institute of Personnel and Development and Adecco, the recruitment group, shows optimism about staffing at an eight-year high, with two-thirds of employers aiming to recruit in the next three months, and just one in 10 cutting jobs.” “Gerwyn Davies, a CIPD analyst, said it was “inevitable” that the surge in hiring linked to reopening would level off later in the year, adding that it remained to be seen whether pay awards would keep pace with inflation,” said FT. Market implications Given the UK employment data scheduled for publishing on Tuesday, upbeat headlines help GBP/USD to bounce off an intraday low of 1.4084. Read: GBP/USD Price Analysis: Bulls battle key hurdle around 1.4100

In recent trade today, the People’s Bank of China (PBOC) set the yuan mid-point at 6.4307 vs the previous fix of 6.4499 and the previous close of 6.43

In recent trade today, the People’s Bank of China (PBOC) set the yuan mid-point at 6.4307 vs the previous fix of 6.4499 and the previous close of 6.4375. About the fix China maintains strict control of the yuan’s rate on the mainland. CNY differs from its offshore yuan, or CNH, which is not as tightly controlled as the onshore yuan. Each morning, the People’s Bank of China (PBOC) sets a so-called daily midpoint fix, based on the yuan’s previous day closing level and quotations taken from the inter-bank dealer.

GBP/NZD is on the verge of a compelling bullish scenario as illustrated in the following daily and 4-hour chart analysis: Daily chart From a daily per

GBP/NZD bulls are stepping in at a critical support structure.The bears need to make or break at this juncture, as evident across the charts. GBP/NZD is on the verge of a compelling bullish scenario as illustrated in the following daily and 4-hour chart analysis: Daily chart From a daily perspective, the price has hit a critical support level and the bulls would be expected to be active at this juncture.  A significant surge to the upside will pressure key lower time resistances as follows... 4-hour chart From a 4-hour perspective, the support structure is even more evendent but there is work to do from the bulls. The 4-hour resistance guards the last stop for an onwards bullish move to new highs. 

Early Monday, the market sees the annualized figures of April month Retail Sales and Industrial Production from the National Bureau of Statistics of C

China Economic Data Overview Early Monday, the market sees the annualized figures of April month Retail Sales and Industrial Production from the National Bureau of Statistics of China at 02:00 GMT. Investors would emphasize more on the data considering the latest reflation chatters. Industrial Production (IP) and Retail Sales figures bear down forecasts of 9.8% and 24.9% on a YoY basis versus 14.1% and 34.2% respective priors. Further, Fixed Asset Investment is also likely to weaken from 25.6% previous readouts to 19% on a Year-To-Date (YTD) basis for the said month. Westpac follows the market forecasts while saying: Momentum will remain strong with capacity and income gaining at a robust pace. Industrial production growth is seen easing to 10.0%yr from 14.1%yr in March, retail sales softening to a still stellar 25.0%yr growth pace from 34.2%yr in March (massive lockdown impact still in the y/y comparisons) and fixed asset investment 20.0% year to date vs Jan-Apr 2020. How could it affect the markets and US dollar? As upbeat China trade numbers battle chip shortage, today’s Industrial Production figures could portray an upside surprise amid an economic recovery in the West. The data will be looked upon inflation concerns and hence any more strengthening of the data from Beijing could test the latest risk-on mood, which in turn can help the US dollar index (DXY) to recover some of the recent losses. On the contrary, traders should be relaxed in case of mixed data and could keep the US dollar heavy. While China data can indirectly affect the US dollar, via risk signals, the Australian dollar (AUD) has a stronger correlation with the scheduled figures due to the Canberra–Beijing trade ties. Hence, firmer data may help the AUD/USD to stay on the front foot even as the anticipated US dollar strength could pose a downside risk for the Aussie pair. That said, AUD/USD consolidates Friday’s gains around 0.7760 by the press time while the DXY prints mild gains near 90.40 by the press time. Technically, AUD/USD remains above a confluence of 50-day and 100-day SMA around 0.7710-20, suggesting another attempt to cross the resistance around 0.7820, comprising multiple tops marked since January. However, sluggish oscillators indicate weakness in trading momentum to break the key hurdle to the north. Key Notes AUD/USD Forecast: Aussie up with gold and equities recovering AUD/USD remains on the way to 0.7820 hurdle ahead of China data dump About China's Industrial Production Industrial output is released by the National Bureau of Statistics of China. It shows the volume of production of Chinese Industries such as factories and manufacturing facilities. A surge in output is regarded as inflationary which would prompt the People’s Bank of China would tighten monetary policy and fiscal policy risk. Generally speaking, if high industrial production growth comes out, this may generate a positive sentiment (or bullish) for the CNY (and AUD), whereas a low reading is seen as negative (or Bearish) for the CNY (and AUD). About China's Retail Sales The Retail Sales report released by the National Bureau of Statistics of China measures the total receipts of the retailed consumer goods. It reflects the total consumer goods that the various industries supply to the households and social groups through various channels. It is an important indicator to study the changes in the Chinese retail market and reflecting the degree of economic prosperity. In general, A high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY.

Silver reverses the early Asian session gains, recently declining to $27.40, amid early Monday. In doing so, the white metal takes a U-turn from a dow

Silver steps back from short-term key hurdle, hangs in balance.Pullback eyes two-week-old horizontal support but MACD probes the bears.Monthly peak, $28.00 offer extra filters to the north.Silver reverses the early Asian session gains, recently declining to $27.40, amid early Monday. In doing so, the white metal takes a U-turn from a downward sloping trend line from last Monday even as the MACD stays bullish. Hence, the pullback moves may have a limited downside, until a short-term horizontal support zone near $27.10. Even if the commodity prices fail to bounce off $27.10, an upward sloping trend line from April 27 and 100-SMA, respectively around $26.90 and $26.70, could challenges silver sellers. On the contrary, an upside break of $27.50 immediate hurdle needs to refresh the monthly peak near $27.90, also cross the $28.00 threshold, before directing the silver bulls toward late February top near $28.30. Overall, silver prices remain strong but intermediate pullback can’t be ruled out. Silver four-hour chart Trend: Pullback expected  

USD/JPY differs from the previous two-day declines while taking bids near 109.45, up 0.13% intraday, as Tokyo opens for Monday. While Japan’s Producer

USD/JPY snaps two-day downtrend, refreshes intraday top.Japan PPI came in better than forecast in April.Nikkei 225, S&P 500 Futures print mild gains amid risk-on mood.China data, risk catalysts should be watched for fresh impetus.USD/JPY differs from the previous two-day declines while taking bids near 109.45, up 0.13% intraday, as Tokyo opens for Monday. While Japan’s Producer Price Index (PPI) for April could be cited as the latest push to the north, risk-on sentiment helps the yen pair to please the bulls. Japan PPI crosses 0.5% MoM and 3.1% YoY forecasts with 0.7% and 3.6% figures respectively. The upbeat data helps extend Friday’s risk-on mood despite the coronavirus (COVID-19) woes in Japan. Friday’s downbeat US data favored the Fed policymakers to defend the easy money framework and helps boost the market sentiment. Also on the positive side could be the steady vaccinations in the West and the recently announced mask mandate in the US. Alternatively, strict activity measures commenced in Japan’s six prefectures this Sunday as the government struggles to tame the coronavirus (COVID-19) cases ahead of the scheduled Olympics. Also on the risk-negative side could be the geopolitical unrest in the Middle East. Despite mixed catalysts, Japan’s Nikkei 225 prints 0.40% intraday gains while S&P 500 Futures remain 0.10% up by the press time. It should, however, be noted that the US dollar index (DXY) consolidates Friday’s losses whereas US Treasury yields struggle for fresh clues while writing. Looking forward, the covid updates from Japan and Fedspeak could be the key for USD/JPY traders. However, China’s April month’s Industrial Production and Retail Sales, expected 9.8% and 24.9% YoY respectively versus 14.1% and 34.2% in that order, can offer immediate direction to the risk-barometer. Technical analysis A three-week-old rising wedge formation restricts short-term USD/JPY moves between 109.80 and 108.90.  

Japan Producer Price Index (MoM) came in at 0.7%, above expectations (0.5%) in April

GBP/JPY takes the bids around 154.25, up 0.12% intraday, during the early Asian session on Monday. In doing so, the pair keeps Friday’s bounce off the

GBP/JPY keeps short-term triangle breakout, pokes intraday high of late.Upbeat Momentum, successful trading above key SMA favor bulls.GBP/JPY takes the bids around 154.25, up 0.12% intraday, during the early Asian session on Monday. In doing so, the pair keeps Friday’s bounce off     the previous resistance line amid upbeat Momentum. Not only a sustained trading above short-term hurdle but a clear run-up past-100-HMA also back the GBP/JPY bulls targeting the monthly top of 154.45, also the highest since February 2018. It should, however, be noted that the 155.00 threshold and January 2018 high near 156.10 become strong resistances to cross before challenging the year 2018 peak surrounding 156.60. On the flip side, pullback moves need to break the resistance-turned-support line around 154.00 whereas the 100-HMA and an ascending trend line from May 11 offer extra support to the south, respectively around 153.90 and 153.70. In a case where GBP/JPY stays depressed below 153.70, lows marked since May 10 near 153.10 could test the bears before directing them to the early month tops close to 152.20-30. GBP/JPY hourly chart Trend: Bullish  

United Kingdom Rightmove House Price Index (MoM) fell from previous 2.1% to 1.8% in May

Japan Producer Price Index (YoY) came in at 3.6%, above expectations (3.1%) in April

WTI wavers around $65.50, easing of late, during Monday’s Asian session. In doing so, the energy benchmark struggles to justify the market’s optimism

WTI holds onto Friday’s recovery moves, firmer after four-week uptrend.UN refrains from direct meddling into Gaza, China blames the US for that.US data cools down inflation concerns, weighs on DXY.China data, risk headlines become the key as bulls battle key hurdle.WTI wavers around $65.50, easing of late, during Monday’s Asian session. In doing so, the energy benchmark struggles to justify the market’s optimism towards further easy money policy from the Fed as well as geopolitical tension in the Middle East. The reason could be traced from the cautious sentiment ahead of China data. Friday’s downbeat US Retail Sales and Michigan Consumer Sentiment Index, not to forget the Industrial Production, gave another chance to the US Federal Reserve (Fed) policymakers in defending the easy money policy. The Fed aptly took the advantage of recently mixed data to shrug off the push towards policy adjustments. As a result, the global markets turned positive and weighed on the US dollar index (DXY) as well as the US Treasury yields. The same favored commodity prices and boosted WTI to post the heaviest daily gain in a week. While oil traders keep searching for fresh clues, no fresh challenges to the Fed’s easy money policies favor risk-on mood. Also on the positive side was the news suggesting that the United Nations (UN) refrains from any direct meddling in Gaza, due to the US as per China. The Israel-Palestine tussles are turning scary of late, which in turn suggests the oil supply hurdles and back the energy bulls. It should, however, be noted that China’s Industrial Production and Retail Sales for April, expected 9.8% and 24.9% YoY respectively versus 14.1% and 34.2% in that order, will be the key for oil prices amid fears of the downbeat outcome. Meanwhile, upbeat figures could keep the market optimism intact and offer extra support to the oil buyers. Technical analysis A daily closing beyond the $66.15-25 area, comprising multiple tops marked since early March, becomes necessary for the WTI bulls before targeting the yearly high of $67.86.  

GBP/USD bounces off intraday low to 1.4095, keeping late Friday’s 10-pip trading range, amid Monday’s Asian session. In doing so, the cable stays near

GBP/USD stays inside a choppy range near 1.4100.One-week-old horizontal area, short-term falling trend line guards immediate upside.MACD conditions suggest bulls rolling up the sleeves.Sustained trading above key support lines, 100-SMA favor buyers.GBP/USD bounces off intraday low to 1.4095, keeping late Friday’s 10-pip trading range, amid Monday’s Asian session. In doing so, the cable stays near the short-term horizontal and trend line hurdle amid the receding bearish bias of the MACD. Other than the MACD conditions, the quote’s successful trading above immediate support lines and 100-SMA also back the GBP/USD bulls. Hence, GBP/USD buyers are waiting for a clear break above 1.4115 to refresh the monthly top, also the highest since late February, near 1.4165. However, the pair’s further upside needs to cross the 1.4200 threshold before targeting the yearly peak surrounding 1.4245. Alternatively, pullback moves may aim for a one-week-old support line near 1.4050 before challenging the 1.4000 round figure and the monthly trend line support close to 1.3975. Also acting as the key support is the 100-SMA level of 1.3960, as well as the multiple tops marked during early May around 1.3930. GBP/USD four-hour chart Trend: Bullish  

AUD/NZD is stalling as the bears thin out on the advance to the critical daily demand area on the charts. The following illustrates the prospects of a

AUD/NZD bears take on the bullish commitments at critical support.Bulls have their eyes on a meaningful correction target.AUD/NZD is stalling as the bears thin out on the advance to the critical daily demand area on the charts. The following illustrates the prospects of an upside correction in the pair. AUD/NZD daily chart As illustrated, the daily chart sees the price meeting support and there are prospects of a correction back to test the prior lows. However, when measured against the Fibonaccis, the lows are only a small 23.6% retracement and considering the amount of demand, there are prospects of a greater correction. This puts the confluence of the 21-day EMA and the 38.2% Fibo in focus as the next port of call. 

EUR/USD eases from the intraday top, stays around 1.2150, amid the initial Asian session trading on Monday. In doing so, the currency major consolidat

EUR/USD holds onto Friday’s recovery moves despite struggling to refresh intraday top.S&P 500 Futures remains bid for third consecutive day, mixed US data cools down tapering concerns.UN refrains from direct meddling in Gaza, China blames US.China data, Fedspeak could entertain traders amid a likely quiet start to the week.EUR/USD eases from the intraday top, stays around 1.2150, amid the initial Asian session trading on Monday. In doing so, the currency major consolidates Friday’s heavy gains but remains positive amid the recent risk-on mood, backed by the receding hopes of the Fed’s tapering and/or rate hikes. Friday’s US Retail Sales and Michigan Consumer Sentiment Index offered an extra reason for the US Federal Reserve (Fed) policymakers to defend the easy money practices in America. With mixed economics raising doubts over the reflation concerns, the Fedspeak suggesting the need for “multiple data of more months” for any policy adjustments seem justified. The same joins steady vaccinations in the West and hopes of the strong economic recovery of the pandemic to back the market sentiment in recent days. It should, however, be noted that the bulls are worried over the Israel-Palestine tussle but have recently been relieved as the United Nations (UN) refrains from any direct meddling in Gaza, due to the US as per China. Additionally, the coronavirus (COVID-19) woes in Asia also daunt the market sentiment. Even so, S&P 500 Futures print 0.1% intraday gains after upbeat Wall Street performance during the previous two days. It’s worth mentioning that the US dollar index (DXY) and the US 10-year Treasury yields were offered on Friday amid risk-on mood. Looking forward, China Industrial Production and Retail Sales for April, expected 9.8% and 24.9% YoY respectively versus 14.1% and 34.2% in that order, will provide immediate direction to the market sentiment, in turn to the EUR/USD prices. However, the Fedspeak scheduled for later in the US session could be more important to watch. Technical analysis Unless dropping back below an ascending trend line from March 31, around 1.2080, EUR/USD remains on the way to 1.2200.  

New Zealand Visitor Arrivals (YoY) climbed from previous -98.6% to -97.4% in March

NZD/USD is starting the day flat in a quiet beginning to the week while investors concentrate on what may come of a mix of conflicting US and global d

NZD/USD meets a critical resistance area for the start of the week.Breas are lurking for a downside continuation while the focus stays on the theme of the relation.NZD/USD is starting the day flat in a quiet beginning to the week while investors concentrate on what may come of a mix of conflicting US and global data vs reflationary prospects. NZD/USD is currently trading at 0.7247 between a range of 0.732/48. The greenback has been the focus as it edged lower against major currencies on the last trading day of the week. The report that US Retail Sales unexpectedly stalled in April due to the fears of accelerating inflation receding is a double-sided sword in that inflation is at height vs poorer data. On Friday, the Commerce Department said that Retail Sales were unchanged in April after recording a 10.7% surge in March, but this was boosted by stimulus checks.  All in all, however, investors expect another acceleration in such data as US Retail Sales because the global recovery is being priced in as inevitable as leading nations, such as the US economy, reopen and populations spend the savings they have been amassing.  Domestically, the New Zealand economy is regaining momentum as well after a soft patch over the summer months as evident in the latest electronic card spending that printed strong for April, while housing market data remained perky. NZD/USD technical analysis Meanwhile, from a technical perspective, the price has made a full retracement to the neckline of the M-formation.  This means that the next day or so is critical. A break of the neckline will be highly bullish, but a correction from here will be bearish.   

Gold bulls keep the reins around $1,848 as traders extend Friday’s risk-on sentiment amid the early Monday morning in Asia. Although recent headlines

Gold takes the bid after two consecutive weekly run-ups.Risk-on mood favors gold buyers amid downbeat US dollar, Treasury yields.Sluggish US data cools down inflation concerns, helps Fed to defend easy money policies.Geopolitical, covid headlines can offer intermediate moves but nothing major to keep a tab on.Gold bulls keep the reins around $1,848 as traders extend Friday’s risk-on sentiment amid the early Monday morning in Asia. Although recent headlines from China and the United Nations (UN) test the market optimism, receding fears of reflation back the gold buyers amid a quiet start to the key week. Fed’s dilemma seems priced in… As the economies in the West rebound, inflation concerns jump back to the table as central banks and governments around the globe have pumped the system with money during the pandemic. The US Federal Reserve (Fed) has a more challenging task to defend the easy money policy after the Bank of Canada (BOC) and Bank of England (BOE) altered their bond purchases and renewed tapering talks. Also on the negative side could be expectations of further stimulus from US President Joe Biden’s table. Even so, the market players seem to have already prepared for the Fed’s play down as the US dollar index (DXY) has been on a back foot since late March, which in turn backs the gold prices. The greenback gauge got another jab on Friday when the US Retail Sales and Michigan Consumer Sentiment Index figures, for April and May respectively, slipped below forecast, easing the way for the Fed policymakers seeking “multiple data” to confirm the policy adjustments. The upbeat sentiment ignored the geopolitical tussles between Israel and Palestine that recently pushed the United Nations (UN) for an emergency meeting. However, nothing important came out of the meeting, due to the US as per China. Also challenging the mood could be the headlines suggesting that China’s ban on Aussie coal import could extend into 2022. While the S&P 500 Futures look for more push towards the north, eyeing China data dump for April, gold buyers remain hopeful as recent data from the US favor the Fed. Against this backdrop, the Australia and New Zealand Banking Group (ANZ) said, “Whilst we give weight to re-opening and noise arguments, the evolution of core services inflation merits very close monitoring, as it makes up 60% of the US CPI. Long-term inflation expectations are also moving up, as shown in the consumer survey this week. And central banks are also increasingly concerned about frothy asset prices, as evidenced by the April ECB minutes last week. We have recently seen both the BoE and BoC start to gently dial back weekly bond purchases. Inevitably, policymakers are increasingly debating the merits versus risks of monetary policy ‘super-max’.” Looking forward, China’s April month data dump could help the gold prices extend recent upside, should the figures cross downbeat forecasts. However, gold’s major upside may await the Fedspeak scheduled during the US session. Technical analysis Gold battles 200-day SMA for the first time since early February amid stronger oscillators than those dragged the quote back in the last attempt. Also favoring the gold bulls could be near-term support lines as well as the risk-on mood. However, a clear break above the immediate $1,846-47 hurdle, comprising the key SMA, becomes necessary for the bulls before targeting the late January tops surrounding $1,875. During the run-up, February 10 swing high near $1,855, the previous attempt to cross the 200-day SMA, could act as an intermediate halt. Meanwhile, a two-week-old support line near $1,820 can keep the gold sellers away amid a fresh pullback, if any. Also acting as a downside filter is an upward sloping trend line from March 31, around the $1,800 threshold. Gold daily chart Trend: Bullish  

AUD/USD begins the week mostly unchanged, around 0.7770-80, as bulls stay hopeful after Friday’s upbeat mood. Fresh hopes backing the US Federal Reser

AUD/USD wavers around Friday’s top after posting the heaviest weekly loss in 11 weeks.Market sentiment improved after US data came in weaker, backing the Fed’s defense to easy money policy.Covid, geopolitical plays probe bulls amid cautious mood ahead of the top-tier data from the key customer China.AUD/USD begins the week mostly unchanged, around 0.7770-80, as bulls stay hopeful after Friday’s upbeat mood. Fresh hopes backing the US Federal Reserve’s (Fed) easy money policies, due to the recent weakness in American data, helped the quote on Friday. The Aussie pair’s recent strength could also be considered as a consolidation to the last week’s heavy fall, the biggest since late February. Can China spoil the mood? On Friday, no growth of the US Retail Sales for April joined May’s downbeat Michigan of Consumer Sentiment Index backed the Fed policymakers trying to defend versus the rate hike and/or tapering woes. The positive sentiment could also be traced to the modest strength in the US Industrial Production, a 0.7% upside, for April. With the inflation concerns seem mostly priced, coupled with the recently mixed data and the Fed’s strong defense to monetary policy, US equities managed to close the week on the positive side. Also portraying the risk-on mood was the US dollar index (DXY) that dropped the most in a week on Friday while the US 10-year Treasury yield also shed 3.3 basis points to 1.635% by the end of the week’s trading. Other than the reflation fears, geopolitical unrest in the Middle East and covid woes in Asia remains the challenging factors for the markets. However, steady vaccinations and hopes of strong economic recovery in the West outweigh them. Hence, the commodities remained mostly on the front foot, mainly the gold prices, which in turn offered extra support, in addition to the upbeat trading sentiment, to the AUD/USD bulls. It should, however, be noted that the pair traders currently await China’s Industrial Production and Retail Sales for April, expected 9.8% and 24.9% YoY respectively versus 14.1% and 34.2% in that order. Although the key figures from Australia’s major customer are likely to come in weaker, suggesting a downside risk to the AUD/USD prices and market sentiment, any upside surprise will be welcomed with zeal. Technical analysis AUD/USD remains above a confluence of 50-day and 100-day SMA around 0.7710-20, suggesting another attempt to cross the resistance around 0.7820, comprising multiple tops marked since January. However, sluggish oscillators indicate weakness in trading momentum to break the key hurdle to the north.  
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