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NZDUSD improvements from the 0.6215 low are dwindling within the 0.6342-0.6410 region (previous support-now-resistance), which stretches back to mid-June 2020, following a five-week descent from the 0.7033 April high. Furthermore, the diving simple moving averages (SMAs) are sponsoring a revival of the bearish trend in the pair past the near two-year low of 0.6215.

The Ichimoku lines are indicating a pause in negative pressures, while the short-term oscillators are reflecting the latest waning in downward momentum. In their respective bearish zones, the RSI is creeping higher and the MACD has overstepped its red trigger line. Moreover, the positively charged stochastic oscillator is promoting additional upside price action in the pair.

If positive impetus continues to diminish and the price recoils below the 0.6342-0.6410 barrier, initial support could stem from the near two-year low of 0.6215. If selling interest amplifies, the rekindling of the downtrend may then meet the 0.6167 and the 0.6080 respective lows from the latter half of May 2020. Snowballing further, the price may target the 0.5920 May trough, in line with the lows over the mid-April until mid-May 2020 period.

Otherwise, if fresh positive traction unfolds and drives the price north of the 0.6342-0.6410 boundary, buyers may be encouraged to pilot for the 0.6568-0.6629 resistance zone, shaped by the May high and the February inside swing lows. From here, to reinstate confidence in the pair, the price would need to creep beyond the 0.6665-0.6718 resistance barricade, reinforced by the Ichimoku cloud and the falling 50- and 100-day SMAs. Recapturing the area north of the cloud may encourage buyers to challenge the 0.6813 high and the adjacent 200-day SMA of 0.6834.

Summarizing, NZDUSD is exhibiting a bearish bias beneath the 0.6568 high and the SMAs. Additionally, positive prospects in the pair may dwindle further should the price fail to lift above the 0.6342-0.6410 border.

Eurozone CPI was finalized at 7.4% yoy in April, unchanged from March's reading. Core CPI was finalized at 3.5% yoy, up from March's 3.0% yoy. The highest contribution to the annual Eurozone inflation rate came from energy (+3.70%), followed by services (+1.38%), food, alcohol & tobacco (+1.35%) and non-energy industrial goods (+1.02%).

EU CPI was finalized at 8.1% yoy, up from March's 7.8% yoy. The lowest annual rates were registered in France, Malta (both 5.4%) and Finland (5.8%). The highest annual rates were recorded in Estonia (19.1%), Lithuania (16.6%) and Czechia (13.2%). Compared with March, annual inflation fell in three Member States, remained stable in two and rose in twenty-two.

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• Fragmentation, de-globalisation and the ageing of the global labour force can lead to more persistent inflationary pressures forcing central banks back to their core, price stability.
• ESG issues are becoming more complex when "S" and "G" gain importance in a more fractured world creating pressures for near-sourcing and shorter supply chains.
• Global public debt is record high, but the new focus on defence spending, on top of the green transition, will keep public spending high, and most likely force EU countries to accept that EU debt is a permanent tool.

We believe the world is in a turning point in more than one way. The war in Ukraine has highlighted that we have seen the end of a long and peaceful era - an era where stronger economic ties were thought to lower the risk of conflicts – a thought also at the core of EU. Even if it is too early to judge what the long-term outcome of the war in Ukraine will be, there are some trends that seem quite apparent regardless of geopolitical outcomes.

Whether we are entering a period of a cold war, hot war or something more pleasant, some trends seem certain while many of their impacts and magnitudes remain uncertain. We think that at this point it is relevant to discuss these potential outcomes and impacts. In this paper, we highlight five trends that could drive the global economy over the next 5-10 years. The five drivers we identify, are:

1. A more fragmented world, a more unified west, and a more integrated EU with larger shared liabilities,
2. Increased government spending due to defence and green transition in Europe,
3. A rapidly ageing labour force in the developed world,
4. ESG issues becoming ever more complex with the rise in 'S' and 'G' alongside continued emphasis on 'E' and
5. De-globalisation driving more persistent price pressures, forcing central banks back to the core of their mandates.

These trends are often interlinked and their effects may vary depending on the geopolitical outcomes. The war in Ukraine is driving increased investments in defence and green transition while it is almost certain to lead us to a more divided world with increased rivalry, acute threat of sanctions, and the possibility of outright warfare.

Labour markets and supply chains have been (and will in the future be) affected by both the pandemic and the war. At the same time, sustainability issues are becoming more complex after economic risks linked to operating in countries managed by authoritarian regimes have realised for western businesses, while environmental issues will stay high on policymakers' agenda.

Full report in PDF.

Hello fellow traders. In this technical blog we’re going to take a quick look at the Elliott Wave charts of EURJPY , published in members area of the website. As our members know, we’ve been favoring the long side in EURJPY due to incomplete bullish sequences the pair is showing in the cycles from the June 2016 and May 2020 lows. Recently EURJPY made a pull back that has had a form of Elliott Wave Zig Zag pattern that has given us good trading opportunities. We expected EURJPY to find buyers at the extreme zone from the 04/21 peak. In the further text we are going to explain the Elliott Wave Pattern and trading strategy.

Before we take a look at the real market example, let’s explain Elliott Wave Zigzag.

Elliott Wave Zigzag is the most popular corrective pattern in Elliott Wave theory . It’s made of 3 swings which have 5-3-5 inner structure. Inner swings are labeled as A,B,C where A =5 waves, B=3 waves and C=5 waves. That means A and C can be either impulsive waves or diagonals. (Leading Diagonal in case of wave A or Ending in case of wave C) . Waves A and C must meet all conditions of being 5 wave structure, such as: having RSI divergency between wave subdivisions, ideal Fibonacci extensions and ideal retracements.

EURJPY Elliott Wave 4 Hour Chart 05.11.2022

Current view suggests EURJPY is doing black pull back against the 124.33 low. Decline from the peak looks like 5 waves structure, which means cycle from the peak is incomplete. Most likely we got only first leg of the pull back. Recovery against the 04/21 peak ended as truncated Zig Zag pattern – (B) blue. Current view suggests (C) leg is in progress toward 133.075-129.77 area ( Blue Box) .

We don’t recommend selling the pair against the main bullish trend. Strategy is waiting for the price to reached marked blue box zone, before buying the pair again. As the main trend is bullish we expect buyers to appear at the blue box for 3 waves bounce at least. Once bounce reaches 50 Fibs against the ((x)) black high, we will make long position risk free ( put SL at BE). Invalidation for the trade would be break of marked invalidation level 129.77.

As our members know, Blue Boxes are no enemy areas , giving us 85% chance to get a bounce.

EURJPY Elliott Wave 4 Hour Chart 05.12.2022

Eventually EURJPY made proposed leg down as we expected. The pair has found buyers at the Blue Box area and we are getting good reaction from there. Pull back completed at 132.621 low as a Zig Zag pattern. The rally from the blue box reached and exceeded 50 fibs against the (B) connector. Consequently, members who have taken the long trades at the blue box now enjoying profits in a risk free trades. Now we would need to see break of April 21st peak in order to confirm next leg up is in progress. Once the pair breaks 04/21 high, the pair will become bullish again in near term and might offer some new buying opportunities in the short term dips against the 132.621 low.

Note: Some labeling have been removed in order to protect clients’ privileges.

Keep in mind that market is dynamic and presented view could have changed in the mean time. You can check most recent charts in the membership area of the site. Best instruments to trade are those having incomplete bullish or bearish swings sequences. We put them in Sequence Report and best among them are shown in the Live Trading Room

Shanghai city’s authorities allowed some institutions to resume work after no new coronavirus cases. So that's positive for stocks that were higher recently. Also, FED and ECB are ready for higher rates if data will be good in the upcoming months. ECB specifically mentioned that they will make the first rise this summer and that they are ready to move from negative rates quickly. So in my view, I think EUR can be more interesting for a bullish run than USD as ECB still has to take some actions while FED is already in process of hikes. So the gap between CB policies can narrow and that can take a pair higher. From an Elliott wave perspective we see pair recovering in wave A, the first leg of a higher degree correction, so be aware of more gains in sessions ahead. EUR is also catching up the DAX after that divergence last week.

American stocks rose on Tuesday as the recovery rally continued. The Dow Jones rose by more than 175 points while the tech-heavy Nasdaq 100 index rose by more than 1.1% as the tech rally continued. The latest catalyst for the rally was the strong American retail sales numbers. According to the Commerce Department, retail sales rose for the fourth straight month. Sales rose by 0.9% in April from the previous month. Still, since retail sales are not adjusted for inflation, it means that consumers are getting less due to high prices. Also, results by leading companies like Walmart and Home Depot showed that their margins are struggling.

The British pound rose sharply in the overnight session as the US dollar retreated. The currency rose after data revealed that the UK unemployment rate declined to the lowest level since 1975. Additional data revealed that wages continued growing as the labor market tightened. The currency will be in the spotlight as the Office of National Statistics (ONS) publishes the latest inflation data. Economists expect the data to reveal that the headline CPI rose from 7.0% to 9.1% in April. Similarly, they believe that the core CPI rose from 5.7% to 6.2%. If analysts are correct, these will be the highest numbers in more than three decades.

The euro rose also rose after hawkish sentiment from European Central Bank (ECB) officials. In an interview, the Dutch Central Bank president said that the ECB should implement a 0.50% in the July meeting. In another statement, Christine Lagarde also hinted that the bank would start hiking rates. Later today, Eurostat will publish the latest consumer price index (CPI) data. Economists expect the numbers to show that the headline CPI rose by 7.5% in April while core CPI rose by 3.5%. The other important economic data to watch today will be the latest US building permits and housing starts and crude oil inventories data.

EURGBP

The EURGBP pair declined to a low of 0.8390 on Tuesday and then pulled back to the current 0.8445. On the four-hour chart, the pair moved between the middle and lower lines of the Bollinger Bands. It also declined below the 25-day moving average while the MACD moved below the neutral line. The Williams % Range moved above the oversold level. The pair will likely keep be volatile as investors react to the latest UK and EU inflation data.

NAS100

The Nasdaq 100 index continued its recovery as investors bought the dip. The index rose to a high of $12,475, which was significantly higher than this month’s low of $11,700. On the four-hour chart, the pair moved between the middle and the lower lines of Bollinger Bands. It has also moved above the 25-day moving average while the Relative Strength Index (RSI) continued rising. Therefore, the index will likely keep rising, with the next key resistance being at $12,600.

EURUSD

The EURUSD pair rose to the highest point since May 12 ahead of the upcoming EU inflation data. On the four-hour chart, the pair moved above the dots of the Parabolic SAR indicator. It has moved above the 25-day moving average. The Relative Strength Index has moved to the overbought level while the On-Balance-Volume (OBV) has been rising. Therefore, the pair will likely keep rising.

USDJPY is heading sideways, back and forth of the 20-day simple moving average (SMA) slightly above the 129.00 round number. The weak momentum is mirroring in the technical indicators as well, as the RSI is pointing slightly lower in the positive region, while the MACD is moving lower below its trigger line.

In the event the bulls take control again, the 20-year high of 131.35 will come first into view. A violation at this point may see another challenge battle around the 135.20, taken from the high in January 2002.

Should the bears dominate, driving the price below the 20-day SMA, the spotlight will shift to the 23.6% Fibonacci retracement level of the up leg from 113.40 to 131.35 around 127.00, which overlaps with the 40-day SMA. Any step lower will put the pair in a neutral mode, testing 125.10. Slightly lower, the 38.2% Fibonacci of 124.54 and the 50.0% Fibonacci of 122.40 may attract traders’ attention.

In brief, USDJPY continues to be in positive territory, but only a climb above the previous peak of 131.35 could endorse the bullish outlook.

EUR/USD

The pair marked а third consecutive day of gains as yesterday's session ended near the highs ​​for the day. Trading has again resumed in the range between the support at 1.0482 and the resistance at 1.0576. Recent moves suggest a test of this resistance, however, and the expectations are for an initial pullback towards 1.0482 or 1.0440. The bulls would expect better levels before they could enter the market, in order to prepare for a test and a possible breach of the resistance. With a breach of the 1.0576 zone, a more substantial rally, with targets of 1.0760 and even 1.0920, can be expected. If this scenario fails, then the bearish pressure can be expected to persist and the annual support at 1.0350 could eventually be disrupted. Today, increased activity can be expected around the announcement of the CPI data for the eurozone at 09:00 GMT.

USD/JPY

As expected, prices below 128.70 attracted the attention of the bulls and they entered aggressively at the support of 127.48. At the moment, the market is consolidating and growth has slowed due to the weaker U.S. dollar. The first significant resistance for the bulls is 129.60. It is expected to hold or, if violated, to be short-lived. It is possible that the pair has begun sliding in a downtrend belonging to the lower time frames, but this will become clear at the end of the current consolidation. An alternative scenario is for the pair to continue trading in the wide range between 127.50 and 131.20.

GBP/USD

The situation of the Cable resembles that of the EUR/USD. The area at around 1.2170 offered serious support to the bulls, and yesterday the rally gained momentum. It is likely that prices will retrace towards 1.2400, where the bearish pressure should remain limited. This would confirm the bullish attitudes and the change in market sentiment. The stability of the movement would be revealed after the first correction, and if the rally continues, then a test of 1.2600 can be expected. There is still no confirmation of a trend reversal and the recent gains may simply turn out to be a short position squeeze.

EUGERMANY40

The German index continued to rise since the beginning of the week and prices approached the key resistance at 14315. Around this area, the bears could take action and the market might retrace towards 14110. If the bulls still manage to take over this area, then the index could extend its gains towards 14550. Significant support the bulls can currently expect at around 13870.

US30

The U.S. blue chips tested the resistance at 32700 and a deeper pullback can be expected here. Substantial support is likely to be found at around 32190 and the bulls can expect better entry levels below 32400. If the 32700 is successfully breached, then the next target would be 33050. The market is still under bearish control and so any growth here may prove unstable. The zones at 33100 and at 34100 that belong to the higher time frames, can be noted as serious obstacles for the bulls.

Gold inched higher as the US dollar index pulled back from a two-decade high. The price action has stabilised near January’s lows at 1790. A bullish RSI divergence indicates a loss of bearish momentum in this critical demand area, triggering a buy-the-dip behaviour. Sellers’ profit-taking could drive the precious metal higher. A bounce above 1858 may trigger an even broader short-covering. On the downside, a fall below 1790 would send the price into bearish territory with December’s lows (1750) as the next stop.

The yen recouped some losses after Japan’s GDP growth beat expectations in Q1. The US dollar is taking a breather after a prolonged rally. The latest retreat has found support at 127.50 over the 30-day moving average. Medium-term sentiment would stay upbeat as long as the price remains above this demand zone. 130.80 from a previously faded rebound is a key resistance and a bullish breakout could resume the rally towards 133.00. 128.70 is the immediate support for the current consolidation.