Daily market analysis

April 5, 2022

The financial markets began the week with modest changes across asset classes as investors anticipated the latest central bank remarks and events in Ukraine, while also anticipating the start of the corporate earnings season next week. Meanwhile, US equity markets began the week on a positive note, with the NAS100 rising 2.10 percent on the strength of many technology stocks, the SP500 rising 0.82 percent, and the DJ30 rising 0.31 percent, according to MT4 VT Markets data.

Source: Shutterstock | Twitter as one of the market movers on Monday

Negotiators from Russia and Ukraine will restart video talks on Monday, following the European Union’s condemnation of Russia’s military atrocities in multiple Ukrainian cities and President Joe Biden’s statement that Vladimir Putin might face a war crimes trial. This diminishes the likelihood of a breakthrough in the peace process.

Meanwhile, the Treasury yield curve is indicating a slowdown in economic development as the Federal Reserve boosts interest rates to rein in inflation. For the first time since 2007, the US two-year yield has surpassed the 30-year barrier, signaling an inversion on the other side of the curve. The Fed’s minutes this week will provide additional context for a probable 50 basis point rate hike in May and clarify the central bank’s balance sheet reduction strategy.

It’s going to be more and more difficult for businesses in Canada to meet demand and keep up with demand, and that will make people think the Bank of Canada is going to start raising interest rates very quickly. In the central bank’s quarterly survey of business leaders, most companies say they are having trouble meeting unexpected demands.

Main Pairs Movement

In the United States, technology stocks surged, led by Twitter (TWTR), which nearly doubled from Friday’s close. TWTR finished Friday at $39.17 and opened Monday at $47.86, before advancing to $50 in Monday trade, owing to CEO Elon Musk’s 9.2% shareholding.

Starbucks (SBUX) shares opened sharply lower, from Friday’s close of $91.03 to $87.89, having continued their drop to $86.18 before closing at an opening price of $87.75 due to founder Howard Schultz suspending a share-buyback program.

WTI crude oil prices increased beyond $103 per barrel, or 4.54 percent, as traders considered China’s Covid outbreak and attempt to tap strategic supplies.

The USDX (US Dollar Index) increased by 0.38 percent, while the XAUUSD (Gold Index) increased by 0.44 percent. Numerous major currencies traded in a range of directions; EURUSD dipped 0.58 percent, while AUDUSD surged 0.74 percent. EURGBP’s 0.68 percent decline allowed GBPUSD to climb by 0.18 percent.

Technical Analysis

GBPUSD (4-Hour Chart)

GBPUSD is consolidating in the range of 1.3080 to 1.3126. GBPUSD remains trapped between resistance levels of 1.3126 and 1.3188, with support at 1.3080. On the four-hour chart, GBPUSD is trading below its 50-day, 100-day, and 200-day simple moving averages (SMAs).

Resistance: 1.3126 | 1.3188

Support: 1.3080

EURUSD (4-Hour Chart)

EURUSD is continuing its drop, having breached and fallen below the support level of 1.1000. The 1.1000 level becomes resistance, with the possibility of further EURUSD weakness. The support levels intended are 1.0952 and 1.0932. On the four-hour chart, the EURUSD is trading below its 50-day, 100-day, and 200-day simple moving averages (SMAs).

Resistance: 1.1000. 1.1040

Support: 1.0952, 1.0932

XAUUSD (4-Hour Chart)

XAUUSD has been unchanged over the last week, trading between $1921 and $1948, with resistance near $1936. XAUUSD is still clinging to $1921 as a support level, with $1910 and $1893 is the next two levels of support. Meanwhile, the resistance levels of $1936 and $1948 remain in play. XAUUSD is currently trading below its 50-day, 100-day, and 200-day simple moving averages on the four-hour chart.

Resistance: $1936, $1948

Support: $1921, $1910, $1893