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Tesla Inc. slipped after Chief Executive Officer Elon Musk said the electric-car…

Tesla Inc. slipped after Chief Executive Officer Elon Musk said the electric-car maker is suspending purchases using Bitcoin

20210514
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Market Focus

Stocks halted a three-day slide, with investors migrating to value from growth companies as signs of a strengthening labor market tempered inflation worries.

Industrial and financial shares led to gains in the S&P 500, while energy producers joined a slump in oil. The tech-heavy Nasdaq 100 underperformed major equity benchmarks as Tesla Inc. slipped after Chief Executive Officer Elon Musk said the electric-car maker is suspending purchases using Bitcoin. In late trading, Coinbase Global Inc. sank as the biggest U.S. cryptocurrency exchange reported revenue below Wall Street estimates.

Confidence in an economic revival that’s reigned supreme amid continued Federal Reserve stimulus has been recently jolted. Data Thursday showed producer prices rose by more than forecast in April, and jobless claims fell. While some investors insist the surge in inflation is a one-off reopening burst, the broader markets are hedging against the possibility it may persist and force the central bank to take action.

Officials have been trying to drive home the message that they see inflation spikes this year as transitory, in contrast with heightened Wall Street concern about runaway prices. Increases above the central bank’s 2% goal should be temporary but may last through 2022, said Fed Governor Christopher Waller.

The Fed tweaked its plans for buying Treasuries, keeping the monthly pace at about $80 billion but focusing more attention on securities maturing in seven years or longer.

Main Pairs Movement

A gauge of the dollar’s strength stalled Thursday on the back of the biggest rally in two weeks, with traders weighing signs of a reopening economy against the risk that higher inflation may persist. U.S. 10-year Treasury yields slid and the benchmark S&P 500 rose. 10-year Treasury yields slid to 1.67% as commodity prices eased.

Still, an index measuring the three-month implied volatility of the Bloomberg Dollar Spot Index retreated after reaching the highest since April; the Bloomberg Commodity Index fell.

Traditional haven currencies such as the Swiss franc and Japanese yen advanced as commodity-linked peers, such as the Canadian and Australian dollars slipped versus the dollar. USD/JPY slid 0.2% to 109.50; Pair may be supported by a substantial amount of short-dated forward hedging at the 109.58 spot equivalent level, DTCC data shows. AUD/USD rose as much as 0.4% to 0.7746, erasing an earlier loss.

The New Zealand dollar was among the day’s top-performing Group of 10 currencies amid a better risk tone, though nearly NZD1.3b of 0.7260/70 strikes expiring May 18 may slowly climb. NZD/USD jumped 0.3% to 0.7180 after earlier rising 0.5%, the most since May 7.

Technical Analysis

USDJPY (4 hour Chart)

Japan yen remains struggling in a tiny way with consolidative movement throughout the day market, losses -0.14% while trading at 109.449 as of writing. Meantime, the U.S. shares market convalesced from yesterday bleak as initial jobless claim data beat expectation led greenback to enact risk-on sentiment intraday. For the technical aspect, the RSI indicator shows 59 figures, which suggests a bullish momentum sentiment. On average price view, 15-long SMA indicator is an ongoing upper slope in day market and 60-long SMA turned slightly upside slope.

According to price action, it seems the yen built comfortable short-term support in 109.45 around which is the lowest point in the day. For long-term views, we believe yen will go along with indicators momentum, namely, ratch up to the higher floor. Therefore, the first immediately is on 109.45 and the critical support level will be 109.042.

Resistance: 110

Support: 109.45, 109.042, 108.37, 107.937

GBPUSD (4 Hour Chart)

The pound traded with stress below the recently low level as U.S. PPI rose 0.6% in April after surging to 1% in March. For the YoY aspect, the PPI boom to 6.2% which is the biggest rise record since 2010. Pound trading at 1.4053 with withholding unmove in the day market. For the RSI side, the indicator shows a 49 figure, suggesting a neutral momentum at this stage. On the other hand, 15-long SMA indicators retain the south side trend after hard struck in the day, and 60-long SMA indicators remaining a teeny-tiny ascending movement.

Overall the market move-in day, pound once poised to testing 1.4 level but pull up after mire in the daily low. In light of recent perspective, we still foresee 1.4 level would be and have to be the strong support for bullish favor despite faltering movement.

Resistance: 1.4155, 1.42

Support: 1.3959, 1.4

USDCAD (4 Hour Chart)

Loonie continues it bounced up the trail which once achieved weekly high above 1.22 level then slightly retreated modestly, trading at 1.216 with up 0.24% as of writing. Bank of Canada Governor noted on Thursday that further loonie strength could impact policy decisions. Meantime, WTI crude oil drop 3.51% in the day, industrial material wide-ranging retreat it upside traction as greenback missed bullish movement.

For the RSI side, the indicator continues to rally to a higher stage, shows a 56 figure which suggests a slightly bull movement. For moving average side, 15-long SMA indicator remaining upside movement and 60-long SMAs indicator turn it slope to positive way.

As we mentioned recently, loonie successive correction of bearish traction to a higher level, yet, undermine the momentum after touched 60 SMA indicator. For currently, we expect the market will extend its consolidation movement in a range between 1.2264 and 1.2079.

Resistance: 1.2264, 1.238, 1.2491

Support: 1.2079

20210514
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Cathie Wood’s ARK Innovation ETF resumed its slide, bringing this year’s loss…

Cathie Wood’s ARK Innovation ETF resumed its slide, bringing this year’s loss to about 18%

20210513
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Market Focus

The S&P 500 Index slumped the most since February and bond yields jumped after a report showed inflation rose more than forecast, adding to concern that price pressures will stifle a recovery in the world’s biggest economy.

The technology sector continued to lead the retreat inequities, with Apple and Microsoft pacing a 2.6% decline in the Nasdaq 100. Cathie Wood’s ARK Innovation ETF resumed its slide, bringing this year’s loss to about 18%. After closing at a record high on Friday, the benchmark S&P 500 dropped 2.14%. The energy was the only one of the 11 industry sectors to finish in the green. Treasury yields surged the most since March.

The debate over whether inflation will be persistent enough to force the Federal Reserve to tighten policy sooner than current guidance suggests comes as abundant stimulus has powered a rally in global equities, raising concerns valuations had become expensive. Fed Vice Chair Richard Clarida said he was surprised by the rise in consumer prices and “we would not hesitate to act” to bring inflation down to its goals if needed.

The consumer price index increased 0.8% from the prior month after a 0.6% gain in March. Excluding the volatile food and energy components, the so-called core CPI rose 0.9% from March.

Elsewhere, the claim among advocates that Bitcoin is an inflation hedge appears to be in question after the CPI report. The digital asset slumped as much as 5.8% to around $53,600.

Main Pairs Movement

The dollar advanced against its Group of 10 currency peers and 10-year Treasury yields surged after a report showed U.S. prices climbed in April by the most since 2009, testing the Federal Reserve’s message that accelerating inflation will prove transitory.

The Australian and New Zealand dollars fell the most among G-10 currencies as wider risk-off sentiment offset the exuberance in commodity markets. AUD/USD fell 1.4% to 0.7736, after dropping as much as 1.5% earlier, the most since March. The Aussie fell versus most major currencies as long positions taken before the government’s stimulatory budget were cut, according to Asia-based FX traders. NZD/USD slid 1.5% to 0.7164; the pair earlier fell as much as 1.7%, the most since March.

EUR/USD slipped 0.6% to 1.2081; pair retreats after failing to close above 1.2175 and move to Feb. 25 high. The European Commission upgraded the euro area’s growth forecast for this year to 4.3% from 3.8% after taking account of the 800 billion euro ($971 billion) joint recovery fund for the first time.

Technical Analysis

USDJPY (4 hour Chart)

Yields keep picking up while greenback gains upside momentum during the American session, reaching the highest level since May 3 were trading at 109.62 as of writing. As the share market tumble, risk aversion sentiment contributes to the demand for the safe-haven currency. For the technical aspect, the RSI indicator shows 67.8 figures, which suggests a bullish momentum sentiment. On average price view, 15-long SMA indicator turns upper steep slope in day market and 60-long SMA turned slightly upside slope.

On price action, it’s obvious that the yen has penetrated a downside resistance as a yellow line in the char, moreover, the price position has breached the last time high. Thence, we foresee the market could challenge first resistance at 110 level if the market could retain upside momentum. Meanwhile, U.S. 10 years Treasuries yields could also drive the yen direction with positive correlation in further market.

Resistance: 110

Support: 109.042, 108.37, 107.937

GBPUSD (4 Hour Chart)

Japan yen break above 109.5 level amid higher U.S. 10 years Treasuries Sterling turn head to south way after U.S. CPI beat estimates with 4.2% while Core CPI final with 3%. In an earlier session, U.K. GDP released better-than-expectation figures with -1.5%, fueled volatility. In the day market, sterling traded lower stage with a loss of 0.63% while trading at 1.40533 as of writing. For the RSI side, the indicator shows a 49 figure, suggesting a neutral momentum at this stage. On the other hand, the 15-long SMA indicator turns its slope to the south side after hard struck in the day, and the 60-long SMA indicator remaining a teeny-tiny ascending movement.

Overall the market move-in day, sterling slipped which seems affected by the risk-off mode that propels greenback demand. Moreover, it also digests the stress of over-bought sentiment in the short term. From a long perspective, we still optimistic for gain traction ahead if any correction could defend before the neckline level on 1.4.

Resistance: 1.4155, 1.42

Support: 1.3959, 1.4

USDCAD (4 Hour Chart)

Loonie bounced up after reaching the lowest intraday level since 2015, trading at 1.21284 with 0.23% gains in the day. The U.S. 10 years Treasuries yields jumped to 1.695%, reaching the highest level in the month and challenged last time peak at 1.762% while the global share market plummet. Meantime, WTI crude oil boost with nearly 0.6% in the day, industrial material wide-ranging retreat its upside traction as greenback climbed. For the RSI side, the indicator bounced back from over sought territory to 49 thresholds where suggests a neutral momentum at the current stage. For moving average side, 15-long SMA indicator turn slope to ascending way and 60-long SMAs indicator remaining it descending movement.

As we mentioned yesterday, loonie set a comfort support level as price cluster at 1.2079 around and day market has bounced up to recently-day high after testing the support level. We expect loonie is on the way to the correction of downside traction in the short-run that kept a lid on rapidly appreciation stress recently.

Resistance: 1.2264, 1.238, 1.2491

Support: 1.2079

20210513
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The benchmark S&P 500 dropped for a second day after setting a…

The benchmark S&P 500 dropped for a second day after setting a record high on Friday

20210512
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Market Focus

Energy, financial and industrials shares led U.S. stocks lower as the pullback centered in the technology sector widened while investors remained on edge over the threat of inflation.

The tech-heavy Nasdaq 100 erased a loss of almost 2% to finish little changed as some dip buyers emerged. The benchmark S&P 500 dropped for a second day after setting a record high on Friday. Treasury yields edged up and the dollar traded near the lowest levels of this year.

Debate rages over whether the expected jump in price pressures will be enduring enough to force the Federal Reserve into tightening policy sooner than current guidance suggests. Fed Governor Lael Brainard said policymakers must show continued patience as distortions in the post-pandemic boom sort themselves out while the economy is still far from the central bank’s objectives.

Among the biggest pandemic winners, tech stocks whose valuations often depend on earnings prospects far into the future are now at the center of the inflation debate. That was epitomized in Cathie Wood’s Ark Innovation ETF, which has tumbled about 15% so far this year after surging almost 150% in 2020.

Main Pairs Movement

The dollar erased losses as the stocks fell for a second day. Still, the greenback remained lower against most of its Group-of-10 peers as investors focused on inflation concerns with a report due Wednesday that may show a quickening in price increases in April. The pound extended gains for a third session.

The rise in yields also helped the greenback; U.S. 10-year Treasury yields rose through the 50-DMA level to 1.6289, the highest since May 3. Broad-based gamma demand is appearing ahead of U.S. consumer inflation data Wednesday with traders positioning for a price surge and dollar weakness. The surge in prices of commodities in recent days is also intensifying the debate about inflation and the timing of tapering in central-bank accommodation.

A spike in futures turnover helped drive the day’s high; month-end hedging near 1.2150 keeps pair supported; offers anticipated near 1.2200, according to traders. EUR also seeing demand gamma ahead of U.S. CPI data. USD/JPY slid 0.2% to 108.64, Pair seems to find support ahead of 108.34, the May 7 March 10 lows.

Technical Analysis

EURUSD (4 hour Chart)

Euro fiber has experienced a struggle to continued gains in earlier momentum that once propel to last day high before retreating to the current stage, trading at 1.2147 with 0.15% higher as of writing. From the report, “The ground for the euro area recovery is getting firmer and firmer” a European Central Bank council member said. For the technical aspect, the RSI indicator shows 58.7 figures, which suggests a slightly bullish movement expectation. On average price view, 15-long SMA indicator turn flatter move and 60-long SMA turned upside slope in day market.

We foresee the market is pretty optimistic for gain traction in further movement if it can hold above 1.2105 level. On the down way, the first immediate support level is eye on 1.2105 level, 1.207 and 1.2 following. On the up way, we see 1.215 level will be the first tackle resistance as the market tamp down which is formed by the price cluster area.

Resistance: 1.215, 1.22

Support: 1.2105, 1.207, 1.2

GBPUSD (4 Hour Chart)

Sterling is trading higher by 0.17%, trading at 1.4141 as of writing, extended its recently strong movement to the upper stack on relief over the Scottish election results, improved economic forecasts, and lockdown easing estimations. For the RSI side, the indicator has remained over the bought sentiment with 74 figures while the market retreat under 1.4155 level. On the other hand, 15 and 60-long SMAs indicator are accelerating their upward slope.

In the day market, the sterling slightly moves when investors are awaiting GDP data ahead. In the meantime, the chairman of BoE will speak after the data release. Therefore, we expect the market will be impacted by the aforementioned event with a roller coaster move. Nevertheless, we remain optimistic for upward traction as it seemingly heading to 1.42 level which closes to the last highest spot after it breaks through a month-long bottom patter where the neckline is on 1.4 level. Since we see first immediately defend barrier is on 1.4 and 1.396 following.

Resistance: 1.4155, 1.42

Support: 1.3959, 1.4

USDCAD (4 Hour Chart)

Loonie continues to move slightly downside way around 1.21 level which is struggling to aim direction in recently, trading at a lower position at 1.2098 as of writing. Meantime, WTI crude oil traveling at higher step with nearly 0.8% in the day, copper also getting higher with 1.7% gains intraday which breach all-time peak in history. For the RSI side, the indicator bounced back from over sought territory to 30 thresholds. For the moving average side, 15 and 60-long SMAs indicators are remaining in descending movement.

We see price momentum seemingly gird around 1.21 level after it touched down in the day market. Moreover, price is forming a cluster area while low bound setting at 1.2079 where we believe is a short-term first support line.

Resistance: 1.2264, 1.238, 1.2491

Support: 1.2079

20210512
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