Sample Category Title

Daily Pivots: (S1) 0.9727; (P) 0.9758; (R1) 0.9807; More....

USD/CHF retreats notably today, but further rise is expected with 0.9669 minor support intact. Current rally should target next medium term projection level at 0.9864. On the downside, however, considering bearish divergence condition in 4 hour MACD, break of 0.9669 minor support should indicate short term bottoming, and turn bias back to the downside for deeper pull back.

In the bigger picture, down trend from 1.0342 (2016 high) should have completed with three waves down to 0.8756 (2021 low) already. Rise from 0.8756 is likely a medium term up trend of its own. Next target is 100% projection of 0.8756 to 0.9471 from 0.9149 at 0.9864. This will now remain the favored case as long as 0.9459 resistance turned support holds.

Daily Pivots: (S1) 129.71; (P) 130.09; (R1) 130.57; More...

USD/JPY is still bounded in consolidation from 131.24 and intraday bias remains neutral first. Near term outlook remains bullish with 126.91 support intact. Break of 131.24 will resume recent up trend to 261.8% projection of 109.11 to 116.34 from 114.40 at 133.26. However, considering bearish divergence condition in 4 hour MACD, break of 126.91 will confirm short term topping and turn bias back to the downside for a correction.

In the bigger picture, current rally is seen as part of the long term up trend form 75.56 (2011 low). Sustained trading above 61.8% projection of 75.56 (2011 low) to 125.85 (2015 high) from 98.97 at 130.04 will pave the way to 100% projection at 149.26, which is close to 147.68 (1998 high). For now, this will remain the favored case as long as 121.27 support holds.

Daily Pivots: (S1) 1.2444; (P) 1.2521; (R1) 1.2568; More...

Intraday bias in GBP/USD remains neutral as it's still extending the consolidation from 1.2410. In case of stronger recovery, upside should be limited below 1.2999 support turned resistance. On the downside, break of 1.2410 will target 161.8% projection of 1.3641 to 1.2999 from 1.3297 at 1.2258.

In the bigger picture, rise from 1.1409 (2020 low) has completed at 1.4248, ahead of 1.4376 long term resistance (2018 high). Based on current momentum, fall from 1.4248 is probably the start of a long term down trend. The break of 61.8% retracement of 2.1161 to 1.1409 at 1.2493 is affirming this bearish case too. For now, deeper decline would be seen as long as 1.3158 support turned resistance holds. Next target is 1.1409 low.

Daily Pivots: (S1) 1.0476; (P) 1.0523 (R1) 1.0555; More...

EUR/USD recovers mildly as consolidation from 1.0470 extends. But intraday bias remains neutral for the moment. Upside of recovery should be limited by 1.0756 support turned resistance to bring fall resumption. Break of 1.0470 will resume larger down trend and target 161.8% projection of 1.1494 to 1.0805 from 1.1184 at 1.0069.

In the bigger picture, the decline from 1.2348 (2021 high) is expected to continue as long as 1.1185 support turned resistance holds. The break of 1.0635 (2020 low) now raises the chance that it's resuming long term down trend from 1.6039 (2008 high). Retest of 1.0339 (2017 low) low should be seen next. Decisive break there will confirm this bearish case.

Dollar is turning softer entering into US session, as traders might start to lighten up position ahead tomorrow's FOMC rate decision. Commodity currencies are also soft, except Aussie which is supported by RBA's hawkish rate hike. Yet, there is no clear follow through buying in Aussie. European majors, on the other hand, are trying to rebound.

Technically, some focuses will be on whether European majors build on current recovery to develop more sustainable rebound. The levels to watch include 4 hours 55 EMA in EUR/USD at 1.0626, 4 hours 55 EMA in GBP/USD at 1.2667, and 4 hours 55 EMA in USD/CHF at 0.9646. Without breaking these level, the rebound in European majors wouldn't last long.

In Europe, at the time of writing, FTSE is down -0.48%. DAX is up 0.33%. CAC is up 0.41%. Germany 10-year yield is down -0.028 at 0.942. Earlier in Asia, Hong Kong HSI rose 0.06%. Singapore Strait Times rose 0.65%. Japan and China were on holiday.

Eurozone PPI rose 5.3% mom, 36.8% yoy in Mar

Eurozone PPI rose 5.3% mom, 36.8% yoy in March, above expectation of 4.9% mom, 36.3% yoy. For the month, industrial producer prices increased by 11.1% in the energy sector, by 2.8% for intermediate goods, by 2.4% for non-durable consumer goods and by 0.8% for capital goods and durable consumer goods. Prices in total industry excluding energy increased by 2.1%.

EU PPI rose 4.% mom, 36.5% yoy. The highest monthly increases in industrial producer prices were recorded in Ireland (+36.1%), Greece (+8.8%) and Portugal (+8.4%). The only decrease was observed in Slovakia (-1.1%) while in Malta the industrial producer prices remained unchanged.

Eurozone unemployment rate dropped to 6.8% in Mar, EU dropped to 6.2%

Eurozone unemployment rate dropped from 6.9% to 6.8% in March, matched expectations. EU unemployment rate dropped from 6.3% to 6.2%.

Eurostat estimates that 13.374m men and women in EU, of whom 11.274m in Eurozone, were unemployed. Compared with February, the number of persons unemployed decreased by -85k in EU and by -76k in Eurozone.

UK PMI manufacturing finalized at 55.8, failed to mask the continued headwinds

UK PMI Manufacturing was finalized at 55.8 in April, up slightly from march's 55.2. S&P Global said production growth improved slightly. New orders rose at slower pace as new export business retreated. Selling prices rose at record pace as cost inflation accelerated.

Rob Dobson, Director at S&P Global, said: "The improved expansion of output at manufacturers, while positive in itself, failed to mask the continued headwinds buffeting the sector... Manufacturers and their clients are struggling as lockdowns in China and the Ukraine war exacerbate stretched global supply chains, the inflationary picture worsens and geopolitical tensions rise. Specific to the UK, Brexit represents an additional headwind...

"Business optimism has fallen to a 16-month low as companies become more cautious about the future outlook... The inflationary situation is getting increasingly fraught. Input costs rose to the second-greatest extent in the 30-year survey history, leading to a record increase in factory gate selling prices."

RBA hikes by 25bps to 0.35%, more to come

RBA raises cash rate target by 25bps to 0.35% today, larger than expectation of 15bps to 0.25%. The interest rate on Exchange Settlement balances is also lifted by 25bps to 0.25%. In the forward guidance, RBA said it's committed to "ensure that inflation in Australia returns to target over time". That will "require a further lift in interest rates over the period ahead".

In the accompanying statement, RBA said the economy has "proven to be resilient and inflation has picked up more quickly, and to a higher level, than was expected" while "wages growth is picking up". It's appropriate to start the process of normalizing monetary conditions."

Unemployment rate is expected to decline to around 3.5% by early 2023, hitting the lowest level in almost 50 years. GDP is projected to grow by 4.25% over 2022 and 2% over 2023. Headline expected to rise further from current 5.1% to 5% this year. Underlying inflation is also expected to rise from current 3.7% to 4.75%. By mid-2024, headlines and underlying inflation are projected to have moderated back to around 3%, with assumption of further rate hikes.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0476; (P) 1.0523 (R1) 1.0555; More...

EUR/USD recovers mildly as consolidation from 1.0470 extends. But intraday bias remains neutral for the moment. Upside of recovery should be limited by 1.0756 support turned resistance to bring fall resumption. Break of 1.0470 will resume larger down trend and target 161.8% projection of 1.1494 to 1.0805 from 1.1184 at 1.0069.

In the bigger picture, the decline from 1.2348 (2021 high) is expected to continue as long as 1.1185 support turned resistance holds. The break of 1.0635 (2020 low) now raises the chance that it's resuming long term down trend from 1.6039 (2008 high). Retest of 1.0339 (2017 low) low should be seen next. Decisive break there will confirm this bearish case.

Economic Indicators Update

AUDUSD has snagged around the 0.7100 handle, trading in between the Ichimoku lines, after the pair’s fresh bounce in the vicinity of three-month lows at 0.7029. The pair is finding difficulty to reach yesterday’s intraday high of 0.7147 despite the Reserve Bank of Australia’s larger interest rate hike earlier today, which kept the pair bid in the Asian session. That said, the bearish simple moving averages (SMAs) are endorsing the negative trajectory in the pair.

Currently, the Ichimoku lines indicate a pause in the negative forces, while the short-term oscillators are painting a conflicting picture in directional momentum. The MACD is strengthening over its red trigger line in the negative region, while the stochastic %K line has dipped back below the %D line, promoting growing downward momentum. Meanwhile, after a retest of the 50 level, the now neutral RSI is struggling to push clearly into the bullish zone.

If the 0.7100 hurdle obstructs gains in the pair and sellers steer the price visibly underneath the red Tenkan-sen line at 0.7086, the door could then open for a retest of the three-month trough of 0.7029. If the downward bearing is rekindled, the bears may target the 0.6963-0.6973 support band, formed by the mid-July 2020 lows and the January 28 trough. Should the descent endure, the price could seek out the key 0.6921 support base, shaped by multiple lows over the first half of July 2020. From here, a deeper move could then encounter downside friction within the 0.6900 and the 0.6876 support barriers.

Otherwise, if buyers re-emerge and drive the pair past the blue Kijun-sen line at 0.7110, they could then meet initial resistance at 0.7147. The path higher is paved with congested obstacles, starting with a resistance area linking the descending 50-period SMA at 0.7168 with the 0.7190 high, coinciding with the Ichimoku cloud’s lower band. Climbing further, the bulls may then face the 0.7228-0.7251 resistance band. Overstepping the cloud and approaching 100-period SMA, currently at 0.7289, buyers could aim for the 0.7342 border before attempting to challenge the 200-period SMA.

Summarizing, AUDUSD is sustaining a bearish bias beneath the falling SMAs and the 0.7190 high. That said, a climb in the price above the 0.7228-0.7251 resistance barrier could likely feed positive prospects.

The AUDUSD jumped to two-day high (0.7147) after being in red for the seven consecutive days, lifted by the Reserve Bank of Australia rate hike on Tuesday.

The RBA surprised markets by raising interest rate by 25 basis points to 0.35%, as most of analysts were betting for a 15 basis points increase, and some expected the central bank to stay on hold ahead of Australia’s election on May 21.

The RBA said it is committed to do what is necessary to return soaring inflation to its target and signaled more action in the near future, marking today’s decision as a hawkish hike that would lift the Australian dollar, which fell over 5% in April.

Although the Aussie jumped around one full-figure in reaction to RBA’s decision, bulls lost traction ahead of initial resistance at 0.7178 (falling 10DMA / Fibo 23.6% of 0.7661/0.7029), where the recovery attempts were repeatedly rejected last week.

Break and close above this level is needed to generate initial reversal signal and open way for stronger recovery towards next targets at 0.7243/53 (daily Tenkan-sen / cloud base).

Daily studies show 14-d momentum turning north, deeply in the negative territory and RSI emerging from oversold zone, but near-term structure is expected to remain weak while the action is limited under 0.7178 pivot.

Res: 0.7147; 0.7178; 0.7228; 0.7243.
Sup: 0.7045; 0.7029; 0.7000; 0.6967.

Gold and silver have come under increased pressure in the last two weeks. Silver has ten sessions of back-to-back decline, from $25 to $22.5, and is back near the lower end of its trading range since July 2020.

In the middle of last month, the pressure on gold intensified after a failed attempt to climb above $2000.

There was a similar disappointment for the bulls in silver when they failed once again to consolidate the price above the meaningful $25 round level.

The US dollar has strengthened by 5.8% since April, contributing significantly to the base appreciation in metals and other commodities.

In our view, gold and silver might continue their downward trend until FOMC comments or until the monthly labour market report.

The potentially important support is around $1835, the 200 SMA. The performance of gold near that mark could lay the foundations for a prolonged trend, whether it is a reversal to the upside or a final capitulation of the buyers.

For silver, the following potential support line looks at $22.

A sharp drop from $1830 in gold or below $22 in silver would confirm a break-up of the established ranges and promises to be the harbinger of an even more furious and prolonged decline.

In a pessimistic scenario, the gold price could retreat below $1500 by the end of the third quarter and to $16 in silver.

But suppose the Fed comments return demand for risk. In that case, the momentum in the precious metals could renew and give an informal start to the rally to update historical highs in gold and above $30 in silver.

Eurozone PPI rose 5.3% mom, 36.8% yoy in March, above expectation of 4.9% mom, 36.3% yoy. For the month, industrial producer prices increased by 11.1% in the energy sector, by 2.8% for intermediate goods, by 2.4% for non-durable consumer goods and by 0.8% for capital goods and durable consumer goods. Prices in total industry excluding energy increased by 2.1%.

EU PPI rose 4.% mom, 36.5% yoy. The highest monthly increases in industrial producer prices were recorded in Ireland (+36.1%), Greece (+8.8%) and Portugal (+8.4%). The only decrease was observed in Slovakia (-1.1%) while in Malta the industrial producer prices remained unchanged.

Full release here.

Eurozone unemployment rate dropped from 6.9% to 6.8% in March, matched expectations. EU unemployment rate dropped from 6.3% to 6.2%.

Eurostat estimates that 13.374m men and women in EU, of whom 11.274m in Eurozone, were unemployed. Compared with February, the number of persons unemployed decreased by -85k in EU and by -76k in Eurozone .

Full release here.