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21 April 21
Markets attempt recovery after sell-off, dollar firm, BOC eyed
Markets are licking their wounds after falling on Tuesday, yet the risk-off mood continues supporting the dollar. Australian and UK inflation figures met estimates and the focus shifts to the BOC decision. Gold is holding up while cryptocurrencies are mixed.
S&P 500 futures have been edging higher after a day of losses in global equity markets in what seems like a correction after significant gains beforehand. Concerns about the spread of coronavirus in emerging markets were weighing on sentiment while America’s improving situation is supporting Wednesday’s recovery.
The US dollar holds onto its gains, with EUR/USD dropping off 1.2050 despite EU regulators’ green light to using Johnson & Johnson’s vaccines. COVID-19 cases in the old continent seem to fall from their highs.
GBP/USD is trading around 1.3950 after the UK Consumer Price Index came out at 0.7%, marginally below estimates. Producer prices surprised to the upside.
AUD/USD is hovering above 0.77 after CPI met estimates at 0.8% but Retail Sales came out at 1.4% in March, showing the resilience of the Australian economy.
The Bank of Canada is set to leave its interest rate unchanged at 0.25% and is set to publish new economic forecasts. Governor Tiff Macklem will hold a press conference and may comment on growing demand from the US, but concerns about a local housing bubble.
Canada publishes inflation figures ahead of the BOC, and USD/CAD is trading around 1.26.
Gold extended its gains, marching toward $1,800 amid a drop in US yields. Returns on ten-year Treasuries stand at around 1.56%. Oil prices are more responsive to the risk-off mood, with WTI hovering around $62.
AUD/USD Forex Technical Analysis – Downside Momentum Targets .7674 to .7640 Retracement Zone
The direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to .7709.
Daily Swing Chart Technical Forecast
The direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to .7709.
Bearish Scenario
A sustained move under .7709 will indicate the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into .7674 to .7640. Look for buyers on the first test of this area. If .7640 fails then look for an acceleration into the main bottom at .7586.
Bullish Scenario
A sustained move over .7709 will signal the presence of buyers. If this creates enough upside momentum then look for a retest of the main retracement zone at .7770 to .7826.
https://www.investing.com/currencies/aud-usd-chart
EUR/JPY’s spike higher looks exhaustive, attention reverts to 129.40 – Commerzbank
EUR/JPY probed the 130.66/68 recent highs again but was unable to close above that area. Therefore, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, turns the focus to the 129.40 uptrend.
EUR/JPY’s spike higher failed
“EUR/JPY popped through the mid-March high at 130.66, BUT we have again failed to CLOSE above here and the RSI continues to diverge. This looks like a failure to break higher and attention reverts to the uptrend at 129.40.”
“The uptrend guards the current March lows at 128.37/20 and also at the January high at 127.50.”
https://www.investing.com/currencies/eur-jpy-chart
EUR/USD consolidation breakout pattern targets 1.2093 and more
The EUR/USD has formed a strong support and I expect the price to proceed further up.
Consolidation-Breakout pattern has been formed at the bottom and we expect the price to push further up towards the W H5 zone. If we see the close above 1.2095 then 1.2136 is next. Bulls want to protect 1.1950 as the strong support zone where currently buyers are dominating. If the support fails we will see a huge drop to the downside.
https://www.investing.com/currencies/eur-usd-chart
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