#WaveAnalysis
#Tesla reversed from support level 550
• Likely to rise to resistance level 630
https://fxpro.news/technical-analysis/tesla-wave-analysis-24-may-2021-20210524/
#Tesla reversed from support level 550
• Likely to rise to resistance level 630
https://fxpro.news/technical-analysis/tesla-wave-analysis-24-may-2021-20210524/
It is very likely true that Americans are in no hurry to look for a new job, receiving increased benefits and still having a record cushion of cash. But do not assume that Americans have become unusually lazy over the past year, as many simply do not have the opportunity to go to work due to pandemic-related restrictions.
Some parents look after their children at home, while schools and kindergartens remain closed. Increased payments and accumulated cash from government cheques allow people to stay out of work longer. Without them, people would look for work more actively (i.e. they would be quicker to accept employers' offers).
But it would be a blow to American spending, which would hurt the US economy even more.
The US now has record retail sales and record savings, with employment 8 million below pre-pandemic levels and weekly benefit recipients above March 2020 levels. This is only possible because of the government's boost.
Some parents look after their children at home, while schools and kindergartens remain closed. Increased payments and accumulated cash from government cheques allow people to stay out of work longer. Without them, people would look for work more actively (i.e. they would be quicker to accept employers' offers).
But it would be a blow to American spending, which would hurt the US economy even more.
The US now has record retail sales and record savings, with employment 8 million below pre-pandemic levels and weekly benefit recipients above March 2020 levels. This is only possible because of the government's boost.
Fed speakers press on the dollar, boosting Techs & commodities
Fed officials continue to extinguish the inflationary panic and help markets return to last year’s major trends.
Gold looks short-term overbought, having climbed above 70 in the RSI on the daily charts. In the near term, we might well see a consolidation near the current levels with the range of $1844 (200-day moving average) and $1900, an important round level, and the historical high area of 2011.
Looking beyond short-term fluctuations, it makes sense to remain bullish on commodity assets. The Fed’s reluctance to fight the first signs of inflation is fertile ground for higher prices.
In addition to gold, oil is also worth watching: Brent is once again close to $68.50, an area of highs in the last two years. A move above $70 could see the bears capitulation.
Fed officials continue to extinguish the inflationary panic and help markets return to last year’s major trends.
Gold looks short-term overbought, having climbed above 70 in the RSI on the daily charts. In the near term, we might well see a consolidation near the current levels with the range of $1844 (200-day moving average) and $1900, an important round level, and the historical high area of 2011.
Looking beyond short-term fluctuations, it makes sense to remain bullish on commodity assets. The Fed’s reluctance to fight the first signs of inflation is fertile ground for higher prices.
In addition to gold, oil is also worth watching: Brent is once again close to $68.50, an area of highs in the last two years. A move above $70 could see the bears capitulation.
Germany's Ifo Business Activity Index rose in May to 99.2 from 96.6 a month earlier and growth expectations to 98.2. These are the highest index values in two years, largely due to an improvement in the expectations of German businesses.
The Ifo economic expectations index reached 102.9, surpassing the cyclical highs of 2017 and 2014 to the highest levels since the beginning of 2011. The publication's commentary notes an acceleration in economic growth. Amongst economic sectors, the most significant progress is noted in trade.
The Ifo economic expectations index reached 102.9, surpassing the cyclical highs of 2017 and 2014 to the highest levels since the beginning of 2011. The publication's commentary notes an acceleration in economic growth. Amongst economic sectors, the most significant progress is noted in trade.
Interestingly, the markets in Europe are now dominated by the opposite movement. Strong Ifo data triggered profit-taking rather than boosting buying. EURUSD was trading above 1.2260 even before the publication, pulling back 20 pips in the first minutes afterwards. The same goes for the DAX30 index, which made new highs just after the disappointing final GDP figures for the first quarter but went down on the optimism of the business indicator.
Short-term traders should still be cautious about playing against the prevailing euro and equity trend. Short-term fixing will likely be followed by renewed buying of EURUSD, directing the pair to a retest of the year's highs at 1.2350.
Short-term traders should still be cautious about playing against the prevailing euro and equity trend. Short-term fixing will likely be followed by renewed buying of EURUSD, directing the pair to a retest of the year's highs at 1.2350.
#WaveAnalysis
#ChinaA50 broke key resistance level 17600
• Likely to rise to resistance level 18625
https://fxpro.news/technical-analysis/chinaa50-wave-analysis-25-may-2021-20210525/
#ChinaA50 broke key resistance level 17600
• Likely to rise to resistance level 18625
https://fxpro.news/technical-analysis/chinaa50-wave-analysis-25-may-2021-20210525/
#WaveAnalysis
#Platinum reversed from support level 1173
• Likely to rise to resistance level 1275
https://fxpro.news/technical-analysis/platinum-wave-analysis-25-may-2021-20210525/
#Platinum reversed from support level 1173
• Likely to rise to resistance level 1275
https://fxpro.news/technical-analysis/platinum-wave-analysis-25-may-2021-20210525/
Dollar back to year’s lows and aiming even lower
The Fed’s Vice-Chairman Richard Clarida reassured that the regulator could overcome the spike in inflation and provide a “soft landing” without breaking economic growth. People with experience in the markets may remember that the Fed said the same things about 15 years ago, intending to cool the housing boom and overheated economy.
Without going into assessments of the correctness of such a policy in the long run, it is worth remembering that those years were accompanied by a strong recovery in stock markets and pressure on the dollar.
The Fed’s Vice-Chairman Richard Clarida reassured that the regulator could overcome the spike in inflation and provide a “soft landing” without breaking economic growth. People with experience in the markets may remember that the Fed said the same things about 15 years ago, intending to cool the housing boom and overheated economy.
Without going into assessments of the correctness of such a policy in the long run, it is worth remembering that those years were accompanied by a strong recovery in stock markets and pressure on the dollar.
US crude oil inventories declined last week, stronger than forecasted, by 1.66M barrels. To the same week a year ago, inventories were 9.4% lower. While commercial storage remains high by historical standards, Strategic Petroleum Reserves continue to decline, reaching their lowest level since October 2003.
Interestingly, production has persisted at 11m b/d since last July. The doubling of the number of oil rigs in the previous eight months has so far only helped maintain the status quo in production.
On the one hand, this is potentially good news for oil and removes the risks of oversupply of black gold. But, on the other, this data is not strong enough to break bearish resistance in the area of 2-year highs in Brent and WTI.
Interestingly, production has persisted at 11m b/d since last July. The doubling of the number of oil rigs in the previous eight months has so far only helped maintain the status quo in production.
On the one hand, this is potentially good news for oil and removes the risks of oversupply of black gold. But, on the other, this data is not strong enough to break bearish resistance in the area of 2-year highs in Brent and WTI.
#WaveAnalysis
#EURUSD reversed from resistance level 1.2250
• Likely to fall to support level 1.2160
https://fxpro.news/technical-analysis/eurusd-wave-analysis-26-may-2021-20210526/
#EURUSD reversed from resistance level 1.2250
• Likely to fall to support level 1.2160
https://fxpro.news/technical-analysis/eurusd-wave-analysis-26-may-2021-20210526/
#WaveAnalysis
#NZDJPY broke resistance level 79.10
• Likely to rise to resistance level 80.00
https://fxpro.news/technical-analysis/nzdjpy-wave-analysis-26-may-2021-20210526/
#NZDJPY broke resistance level 79.10
• Likely to rise to resistance level 80.00
https://fxpro.news/technical-analysis/nzdjpy-wave-analysis-26-may-2021-20210526/
Dollar bears gather strength
DXY has managed to bounce back above 90, a crucial round level that might be an attempt to form a double bottom and become the basis for a pullback.
EURUSD on this backdrop came back under 1.2200, and GBPUSD rolled back below 1.4100, temporarily dropping to two-week lows. This seems like a tug of war at an important milestone or an attempt to gather strength before a final move.
The ECB, the Fed and the Bank of England hardly benefit from the recent commodity price boom and multi-year highs in global manufacturing activity. Perhaps even the opposite. The pandemic is hitting the service sector the hardest, and this sector represents a large portion of the GDP of developed economies, up to 80%.
Soft monetary policy compensates for the tightening of financial conditions for business, supporting the recovery.
So after a period in which the bears gather their strength, pressure on the USD could intensify.
DXY has managed to bounce back above 90, a crucial round level that might be an attempt to form a double bottom and become the basis for a pullback.
EURUSD on this backdrop came back under 1.2200, and GBPUSD rolled back below 1.4100, temporarily dropping to two-week lows. This seems like a tug of war at an important milestone or an attempt to gather strength before a final move.
The ECB, the Fed and the Bank of England hardly benefit from the recent commodity price boom and multi-year highs in global manufacturing activity. Perhaps even the opposite. The pandemic is hitting the service sector the hardest, and this sector represents a large portion of the GDP of developed economies, up to 80%.
Soft monetary policy compensates for the tightening of financial conditions for business, supporting the recovery.
So after a period in which the bears gather their strength, pressure on the USD could intensify.
US Jobs data progress isn’t welcomed by markets
The number of initial jobless claims in the USA fell by 38,000 to 406,000 in the week to 22 May. This is a new low since the start of the pandemic, marking a labour market recovery. However, continued claims don’t see such an even improvement, with this number plateaued around 3.6 million for more than a month.
Both figures were slightly above expectations. However, the nature of the reaction to the news is now becoming increasingly relevant in the markets.
Stronger data has the potential to put monetary policy tightening back on the near-term agenda. Fears of such an outcome are sufficient to create pressure in the markets.
This is the reaction to the news from the USA that the markets have been witnessing in recent weeks. It is a backlash from the usual and longer-term response when good news supports risk demand.
The number of initial jobless claims in the USA fell by 38,000 to 406,000 in the week to 22 May. This is a new low since the start of the pandemic, marking a labour market recovery. However, continued claims don’t see such an even improvement, with this number plateaued around 3.6 million for more than a month.
Both figures were slightly above expectations. However, the nature of the reaction to the news is now becoming increasingly relevant in the markets.
Stronger data has the potential to put monetary policy tightening back on the near-term agenda. Fears of such an outcome are sufficient to create pressure in the markets.
This is the reaction to the news from the USA that the markets have been witnessing in recent weeks. It is a backlash from the usual and longer-term response when good news supports risk demand.
Holidays in US and UK: trading time schedule changes
On Monday, May 31 Memorial Day in the USA and Spring Banking Holiday in the UK will take place. The following instruments will not be available for trading:
- CFDs on US Shares and UK Shares
- CFDs on Indices Futures
- CFDs on Spot Indices
- CFDs on Agricultural Commodities Futures
Please see the details in the FxPro Market Holidays calendar: https://www.fxpro.com/trading-tools/market-holidays
If you have any questions, feel free to contact our customer support team via email support@fxpro.com.
On Monday, May 31 Memorial Day in the USA and Spring Banking Holiday in the UK will take place. The following instruments will not be available for trading:
- CFDs on US Shares and UK Shares
- CFDs on Indices Futures
- CFDs on Spot Indices
- CFDs on Agricultural Commodities Futures
Please see the details in the FxPro Market Holidays calendar: https://www.fxpro.com/trading-tools/market-holidays
If you have any questions, feel free to contact our customer support team via email support@fxpro.com.
Summer market lull or the start of a correction?
The dynamics in the FX and commodity markets also make us wonder if we are now seeing the summer lull, hesitancy to reach new extremes or break the uptrend and early signs of a correction.
A short-term retreat from the bull rally in Gold might take the price back to $1820-1850/oz over the next few weeks. Brent could return to $66-67 without losing its long-term upside potential.
Should corrective sentiment strengthen, the road to 1.2060-1.2140 is open for EURUSD and 1.4000-1.4100 for GBPUSD. The temporary strengthening of the Dollar is well in line with improved expectations for the US economy and plans for monetary policy tightening.
The dynamics in the FX and commodity markets also make us wonder if we are now seeing the summer lull, hesitancy to reach new extremes or break the uptrend and early signs of a correction.
A short-term retreat from the bull rally in Gold might take the price back to $1820-1850/oz over the next few weeks. Brent could return to $66-67 without losing its long-term upside potential.
Should corrective sentiment strengthen, the road to 1.2060-1.2140 is open for EURUSD and 1.4000-1.4100 for GBPUSD. The temporary strengthening of the Dollar is well in line with improved expectations for the US economy and plans for monetary policy tightening.
The Eurozone consumer confidence index confirmed at -5.1 in May. This is the highest level since the end of 2018 and is amongst the top 20% of all-time highs since 1985. Against this background, it is not surprising to see new highs in the European stock indices.
Inflation expectations are contributing to this push upwards sentiment indices. They put rising inflation expectations as a positive factor, suggesting that people will spend more soon. However, investors and households are worried that inflation may eat into income levels, as the driver of price increases in commodity prices rather than wage and service growth.
Earlier today, German Destatis noted a double-digit inflation rate in import prices for the first time since 2010. Besides the low base effect, we note a 6.6% price increase since the start of the year, so it looks like a further stage of inflation.
Inflation expectations are contributing to this push upwards sentiment indices. They put rising inflation expectations as a positive factor, suggesting that people will spend more soon. However, investors and households are worried that inflation may eat into income levels, as the driver of price increases in commodity prices rather than wage and service growth.
Earlier today, German Destatis noted a double-digit inflation rate in import prices for the first time since 2010. Besides the low base effect, we note a 6.6% price increase since the start of the year, so it looks like a further stage of inflation.