Solid ECN | Daily Technical | Video | Major Products

usdcad-forum-1.png


The European currency shows mixed trading dynamics, consolidating near 1.0600 and local highs from April 27. The day before, EURUSD showed the strongest growth in the last few weeks, which was the market's reaction to the results of the two-day meeting of the US Federal Reserve.

As expected, the US regulator raised the interest rate by 50 basis points to the range of 0.75%–1.00% and announced the start of a quantitative tightening program, but it will not immediately reach the final volumes of purchases. From June 1, the Fed will start selling securities for a total of 47.5 billion dollars, after which it will increase the total monthly sales to 95 billion dollars within three months. The "hawks", who expected that the regulator would immediately bring purchases to the final amount, were somewhat disappointed by this decision. Additional pressure on the dollar was exerted by the rhetoric of the Chair of the US Federal Reserve, Jerome Powell, who said that the issue of raising the interest rate by 50 basis points would also be discussed at the next meetings. Thus, the risks that the indicator will be corrected at a more aggressive pace have almost completely disappeared.

In turn, pressure on the euro was exerted by frankly weak statistics on Retail Sales in the eurozone. In March, the indicator fell by 0.4% after rising by the same amount a month ago, and in annual terms, the pace slowed sharply from 5.2% to 0.8%, while analysts had expected an increase of 1.4%.

At the moment, eurozone household spending continues to grow strongly against the backdrop of rising gas and energy prices. Electricity rates, which nearly doubled in 2021, will add another 50% to the cost this year before a correction begins, according to World Bank statistics. The tightening of anti-Russian sanctions in connection with the escalation of the military conflict in Ukraine also contributes to the negative dynamics. The day before, the President of the European Commission, Ursula von der Leyen, announced the readiness to introduce a gradual embargo on crude oil for six months, and on oil products until the end of this year. If the EU countries fail to replace the volumes, the economy will face negative consequences: the already record inflation will continue to increase and it will become more difficult for companies to fulfill their obligations to customers, which will undoubtedly lead to stagnation.

eurusd-1.png


On the daily chart, Bollinger Bands are moderately declining. The price range is slightly narrowing, staying spacious enough for the current activity level in the market. MACD is growing, maintaining a relatively strong buy signal, being located above the signal line. Stochastic is showing similar dynamics; however, the indicator line is rapidly approaching its highs, indicating the risks of overbought EUR in the ultra-short term.

Resistance levels: 1.0640, 1.069, 1.0726, 1.0767 | Support levels: 1.0576, 1.052, 1.047, 1.04

eurusd-2.png
 
audusd-forum-1.png


The Australian dollar shows negative dynamics against the US currency during the Asian session, correcting after a sharp rise the day before, which contributed to the movement of AUDUSD quotes to new local highs from April 22.

Investors evaluate the results of a two-day meeting of the US Federal Reserve, at which officials raised interest rates by 50 basis points to 1.00%, and also announced a phased introduction of a quantitative tightening program. From June this year, the regulator will begin to reduce its balance sheet by 47.5 billion dollars a month, and from September the pace will increase to 95 billion dollars. The regulator also noted in a statement that economic activity declined in the first quarter amid elevated inflation. The fears of American officials are also caused by the complication of the epidemiological situation in China, since against the background of the quarantine restrictions introduced, serious disruptions in supply chains are possible. Thus, the US financial regulator made the previously announced decisions, and also signaled a moderate rate increase in the future, which caused a wave of disappointment among investors, as well as a sell-off of the US currency.

audusd-1.png


On the daily chart, Bollinger Bands are steadily declining. The price range is narrowing from below, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is growing, having formed a strong buy signal and being located above the signal line. Stochastic keeps its upward direction but is approaching its highs, which reflects the risks of overbought AUD in the ultra-short term.

Resistance levels: 0.725, 0.73, 0.7341, 0.74 | Support levels: 0.7164, 0.71, 0.705, 0.7

audusd-2.png
 
nzdusd-forum-1.png


The New Zealand dollar shows mixed trading dynamics during the Asian session, consolidating near 0.6530 and its local highs from April 27. On Wednesday, NZDUSD showed a sharp increase, which allowed the instrument to move away from record lows.

The investor activity was facilitated by the results of the meeting of the US Fed. As expected, the regulator raised interest rates by 50 basis points and also announced the start of a quantitative tightening program starting June 1. Initially, it is planned to buy securities for a total of 47.5 billion dollars, but then within three months the volume will be increased to 95 billion dollars. Thus, the US financial authorities decided not to rush to tighten monetary policy, which crossed out the premature conclusions of traders on the upcoming rate hikes by 75 basis points at once.

An additional negative factor for the American currency was weak macroeconomic statistics from the US. The ADP report on employment in the private sector in April showed a drop in Nonfarm Payrolls from the previous 479 thousand to 247 thousand, while analysts expected a value of 395 thousand. The ISM Services PMI in April also showed an active decline from 58.3 to 57.1 points, while the market expected the index to rise to 58.5 points.

nzdusd-1.png


On the daily chart, Bollinger Bands are steadily declining. The price range is narrowing actively, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD has reversed to growth having formed a new buy signal (located above the signal line). Stochastic shows a more confident uptrend, but also points to growing risks of the New Zealand dollar being overbought in the nearest time intervals.

Resistance levels: 0.6567, 0.6600, 0.6650, 0.67 | Support levels: 0.6500, 0.6450, 0.64, 0.635

nzdusd-2.png
 
usdchf-forum-1.png


The US dollar shows moderate growth, developing a strong "bullish" momentum formed the day before and updating record highs since March 2020.

Market activity remains subdued again, as US investors prefer to wait for the April report on the national labor market to be published at the end of the week. However, after the increase in the interest rate of the US Federal Reserve, as well as rather restrained comments by the Chair of the regulator, Jerome Powell, who promised not to exceed a reasonable rate of increase in the value by 50 basis points, interest in macroeconomic publications has noticeably decreased. One way or another, the labor market is still one of the key indicators for the US Federal Reserve when making decisions on monetary policy. Forecasts for the current report are quite optimistic and suggest an increase in Nonfarm Payrolls by almost 400 thousand (against 431 thousand last month) and a decrease in the Unemployment Rate from 3.6% to 3.5%.

usdchf-1.png


Last Monday, the head of the Swiss Federal Department of Economic Affairs, Education and Research Guy Parmelin admitted that in the event of an embargo of Russian oil and gas, the situation in the national economy would become much more complicated. Against this background, the Federal Council decided to create by the end of this year an organization to overcome crisis situations in the gas industry and possible shortages of “blue fuel”, as well as a tracking system that will control possible risks of electricity shortages at an early stage.

usdchf-2.png


On the daily chart, Bollinger Bands are steadily growing. The price range is expanding but it fails to conform to the surge of “bullish” activity at the moment. MACD indicator is growing preserving a stable buy signal (located above the signal line). Stochastic, having retreated from its highs at the beginning of the week is again reversing into a horizontal plane, still indicating the risks of the instrument being overbought in the ultra-short term.

Resistance levels: 0.99, 0.9950, 1 | Support levels: 0.9847, 0.98, 0.977, 0.97​
 
usdjpy-forum-1.png


The US dollar shows weak growth against the Japanese yen in Asian trading, again trying to consolidate above 130.50 and holding on to multi-year highs, updated at the end of last week. The instrument develops a "bullish" signal formed the day before and has already completely leveled the results of the decline last Wednesday, when the US currency came under pressure after the publication of the US Federal Reserve's decision on the interest rate. The regulator expectedly increased the indicator by 50 basis points at once, and also announced the launch of a quantitative tightening program in order to reduce its balance sheet by almost 9 trillion dollars.

On Friday, the yen is practically not supported by rather strong statistics on inflation in Japan: the Tokyo Consumer Price Index in April sharply accelerated from 1.3% to 2.5% YoY, which turned out to be significantly higher than market expectations at 1.9%. Excluding food and energy prices, inflation in the region rose by 0.8% after falling by 0.4% a month earlier, although preliminary estimates of experts assumed that the negative dynamics would remain at the level of –0.5%.

usdjpy-1.png


Meanwhile, the Governor of the Bank of Japan, Haruhiko Kuroda, announced the continuation of inflationary pressure on the national economy this year against the backdrop of a significant increase in prices for electricity, utilities and food. The country is dependent on Russian energy resources: oil imports are 3.6%, and liquefied natural gas imports amount to 8.8%, and, according to the country's Minister of Economy, Trade and Industry, Koichi Hagiuda, it will not be able to abruptly refuse supplies. According to the forecasts of the department, the negative dynamics of consumer prices will slow down somewhat by 2023, and until that moment, the country's financial authorities do not plan to intervene in the process and tighten monetary policy, since the inflation rate in Japan is much lower than in other developed countries, although preliminary data for April indicate its increase to 1.8% from 0.8%.

usdjpy-2.png


On the daily chart, Bollinger Bands demonstrate active ascending trading dynamics. The price range expands from above, freeing a path to new record highs for the "bulls". MACD indicator reversed to growth while trying to form a new buy signal (the histogram is about to consolidate above the signal line). Stochastic reacted only by a reversal in a horizontal plane, indicating an approximate balance of sentiment in the short and ultra-short term.

Resistance levels: 130.79, 131.24, 132, 133 | Support levels: 130.00, 129.39, 128.62, 127.5​
 
gbpjpy-forum-1.png


On the daily chart, GBPJPY is correcting above 157.96 and 159 levels. On the 4H time frame, the pair violated the ascending trendline with a weak selling force. The breach could be a whipsaw. However, if the breakout is correct, the instrument will target 157.96 and 159 supports. This scenario remains operational as long as GBPJPY trades below the 25 daily moving average and the descending trendline.

gbpjpy-daily.png


On the other hand, the uptrend continues if the bulls breach the descending trendline and the 25 moving average. In this scenario, the pair will target 164.24 and 168.42.

gbpjpy-4h.png
 
nzdusd-forum-1.png


The New Zealand dollar shows uncertain growth during trading in Asia, being pressured by the strengthening US currency ahead of the release of key data on US consumer price indices on Wednesday at 14:30 (GMT+2) and retreating from record lows renewed at the opening of the session. In the first hours of trading, the instrument tried to consolidate below the psychological level of 0.6300, where it was in June 2020.

Last week, the only important news coming from New Zealand was the unemployment report, but it failed to affect the national currency dynamics significantly. Macroeconomic data also showed rising labor costs for enterprises, which is a catalyst for higher product prices, thus putting significant pressure on the economy. Consumer price growth exceeded wage inflation, amounting to 6.9% YoY for March against 3.0% for April. Negative dynamics reflect the declining solvency of the population. Today, significant support for the New Zealand dollar is provided by new macroeconomic statistics. Thus, the volume of retail sales using electronic payment cards from New Zealand for April increased by 7% MoM after a decrease of 1.3% and by 2.1% YoY after a negative correction of 0.5% for March.

nzdusd-1.png


Meanwhile, investors are concerned about the prospects for a recovery in the global economy against the background of the rapid tightening of their monetary policies by the world's central banks and, in particular, the increase in interest rates to offset the negative effect of high inflation. Also, traders are focused on the introduction of new restrictive measures in China due to an increase in the incidence of coronavirus infection, which also significantly undermines the process of global economic recovery.

nzdusd-2.png


Bollinger bands show a steady decline on the daily chart: the price range narrow, reflecting an attempt at the appearance of corrective dynamics in the short term. MACD falls below the signal line, keeping a relatively strong sell signal. Stochastic reached its lows and reversed into a horizontal plane, indicating that NZD may become oversold in the ultra-short term.

Resistance levels: 0.6400, 0.6450, 0.6500, 0.6567 | Support levels: 0.6300, 0.6250, 0.6200, 0.6150​
 
usdcad-forum-1.png


After the price consolidates above 1.2950 due to the strengthening of the US dollar after the May meeting of the US Federal Reserve, the USDCAD pair continues its upward trend with the target at 1.3157.

Last week, the US regulator raised the interest rate by 50 basis points to 1.00% and announced that from June 1, it would begin a phased reduction in its balance sheet, which will reach 95B dollars per month. In a follow-up commentary, Regulator Chief Jerome Powell dismissed reports that officials may accelerate the pace of monetary tightening going forward but noted the intention to continue hawkish policies to combat record consumer price increases that hurt both private consumers and the industry. According to the latest data, inflation in the US is 8.5%, but renewed statistics will be published tomorrow. Analysts predict that due to the timely actions of the US Federal Reserve, inflation will fall to 8.1% in annual terms. If the forecast is justified, it will allow the US dollar to continue its upward trend.

usdcad-2.png


As for the position of the Canadian dollar, its strengthening is hampered by negative statistics on the labor market published last Friday. According to official data, 15.3K new jobs were created in April, significantly lower than preliminary market estimates of 55.0K and the previous value of 72.5K. The unemployment rate remained at the same level of 5.2%. The Bank of Canada, at its next meeting, scheduled for June 1, will undoubtedly take into account indicators related to the state of the national labor market. If the negative dynamics continue, then the rate increase may not occur, or the value will be adjusted by a minimum amount, which may cause disappointment for investors and further depreciation of the national currency.

usdcad-1.png


The long-term trend is upwards. Today the USD/CAD pair is trying to consolidate above the resistance area of 1.2950–1.2885, after which the next upside target will be 1.3157. Long positions may be opened from 1.2885.

The medium-term trend is upwards. Last week, the price broke through the target zone 2 (1.2862–1.2842), and now the trading instrument is moving to the area of 1.3064–1.3043. The key trend support is shifting to 1.2836–1.2816, from where it is worth considering new long positions.

Resistance levels: 1.3157, 1.336 | Support levels: 1.2885, 1.266
 
gbpusd-forum-1.png


The British pound is trading up against the US currency, trying to recover from four sessions of decline, which led to new record lows since June 2020. The instrument remains under pressure from extremely low demand for risky assets, which, in turn, pushes the US currency to update record highs.

Despite an attempt by the Bank of England to stabilize the situation, experts fear that a sharp rise in interest rates could have an extremely negative impact on the recovery of the British economy, up to the onset of a recession. Meanwhile, the situation with energy resources remains tense, given that the EU and the UK continue to increase sanctions pressure against the Russian economy in response to a special military operation in Ukraine. Last Sunday, the leaders of the G7 countries held talks via videoconference, during which they supported the decision to phase out energy resources, as well as a ban on oil imports from Russia.

The data published the day before put additional pressure on the British currency. Thus, BRC Like-For-Like Retail Sales in April showed a decrease of 1.7% after falling by 0.4% a month earlier, while analysts expected an acceleration of negative dynamics, but expected a slightly more modest decrease of –1.6%. Tomorrow, investors will follow the publication of updated data on the dynamics of UK GDP for Q1 2022.

gbpusd-1.png


Bollinger Bands on the daily chart show a steady decline. The price range is narrowing, reflecting the emergence of multidirectional trading dynamics in the short term. MACD indicator reverses to growth while forming a new buy signal (the histogram is about to consolidate above the zero level). Stochastic shows similar dynamics, recovering from its lows, indicating the risks of oversold pound in the ultra-short term.

Resistance levels: 1.24, 1.25, 1.26, 1.2674 | Support levels: 1.225, 1.22, 1.215, 1.21

gbpusd-2.png
 
audusd-forum-1.png


The Australian currency continues unsuccessful attempts to change the global trend against the US dollar, but there are again obstacles to growth. At the moment, the AUDUSD pair is correcting at 0.6961.

Yesterday, the Australian dollar corrected upwards after publication of data on the index of business confidence from the National Bank of Australia, which amounted to 20 points in April, having risen from 15 points a month earlier. At the same time, Q1 retail sales amounted to 1.2%, significantly lower than 7.9% in the previous period but higher than analysts' pessimistic forecast, which assumed a decline to 1.0%. Today, positive statistics were leveled by data on the consumer sentiment index from Westpac with a forecast for May, which reflected a decrease in the index by 5.6% after falling by 0.9% in April. The statistics clearly show signs of a slowdown in the economy, which negatively affects the national currency's exchange rate.

The main pressure on the instrument is exerted by the US dollar, whose quotes are at high levels close to 104 in the USD Index. The key event of this week will be today's publication of a report on consumer prices, which will show the real state of inflation in the US. Most regional FRB officials have already spoken out in favor of the expected decline to 8.1% from the current 8.5%, which, in turn, is not in line with other economic indicators. If actual inflation continues to rise, this could completely undermine the market's confidence in the actions of the US Federal Reserve and its forecasts.

audusd.png


The price moves within the Expanding formation pattern on the global chart, having reached the support line. Technical indicators keep a sell signal, reflecting the beginning of a possible reversal: indicator Alligator's EMA fluctuations range slightly narrows, and the AO oscillator histogram forms multidirectional bars.

Resistance levels: 0.7, 0.7265 | Support levels: 0.69, 0.67​
 
Back
Top