Daily market analysis

May 21, 2021
   

Daily Market Analysis

Market Focus

Technology companies led a rebound in U.S. equities on Thursday after a report showing applications for state unemployment insurance fell last week to a fresh pandemic low rekindled optimism in the economic recovery.

The Nasdaq 100 Index jumped to a two-week high, with gains in megacaps including Apple Inc., Microsoft Corp. and Tesla Inc. powering the advance. Tech stocks rose the most in the S&P 500 as all of the major industry groups moved higher. Ford Motor Co. rose for the first time in three sessions on plans to create a joint venture to manufacture electric-vehicle batteries in the U.S.

The latest jobs report comes after mounting concern that faster inflation will prompt authorities to ease back on stimulus has weighed on risk assets in recent sessions. Minutes from the Federal Reserve’s last meeting showed some officials were open to a debate at “upcoming meetings” on scaling back bond purchases if the U.S. economy continued to progress rapidly.

Thursday’s rally pushed the tech-heavy Nasdaq 100 above its average price for the past 50 days. That level is a key trend indicator for traders and has proven to be a buy signal in past rebounds.

               

Main Pairs Movement:

currencies pared gains after the U.S. Treasury Department called for stronger tax compliance. Bitcoin, which whipsawed investors with huge price swings on Wednesday, was up less than 5% at 4 p.m. in New York after climbing as much as 11%.

Oil extended declines to a three-week low after Iran’s president said the broad outline of a deal to end sanctions on its oil had been reached. Yields on 10-year Treasuries fell as the dollar weakened.

Commodity currencies advanced as traders faded Wednesday’s dollar bounce that came from the latest Federal Reserve minutes. It had advanced on Wednesday after April’s Fed minutes showed some officials indicated a willingness to discuss a tapering of bond purchases.

AUD/USD rose 0.2% to 0.7745, holding onto gains even after a miss in the April employment report.

               

Technical Analysis:

EURUSD (4 hour Chart)

  

Euro dollar shrugged off the Wednesday’s FOMC-inspired losses that traveling to higher during the U.S. session, trading above 1.22 threshold at 1.2227 as of writing, as much as .48% gains in the day. Meanwhile, greenback has loss the upper traction as U.S. shares market risk sentiment improve and eco data manifest mixed. For technical aspect, RSI indicator set around 65 figures which shows there still have a room for upper way. On average price view, 15-long SMA indicator is ongoing ascending trend in day market after it euro aimed to higher stack and 60-long SMA retained upside slope.

As we mention in recently, we remain our upside expectation as it continued to hold buy-side demand, defended in few vital support as well. At the same time, we expect euro dollar is architecting a comfort zone for further bullish momentum. Since, we deem the first immediately support level is at 1.22, 1.215 following. On contrast, we consider there has a psychological resistance at 1.225~1.226 around.

Resistance:

Support: 1.22, 1.2151, 1.2106, 1.207

           

GBPUSD (4 Hour Chart)

Pound bounced up from yesterday gloomy movement and traded in nearly high level around 1.42 as demand for the dollar receded, trading at 1.4185 as of writing. The improvement in risk appetite weighed on the U.S. dollar fell. The DXY index has fallen to 89.78, remaining the near lows, heading to May’s low. For RSI side, indicator shows 62 figures, suggesting a room for upper side. On the other hands, 15-long SMA indicator remain smooth move after jumped higher in the day and 60-long SMA indicator remaining a ascending movement.

At the moment, pound seems looking again to 1.42 level while await to further buy-in demand for bullish boost up. For price action, we believe pound could still roam between first resistance and support level. In addition, if pound could breakthrough 1.42 level, it could see further gains to higher stage. On the other hands, the Kingdom will unveil leading eco data as PMI figure, expecting a fluctuation move ahead.

Resistance: 1.42

Support: 1.3959, 1.4, 1.4108

               

XAUUSD (4 Hour Chart)

Gold was traded at higher place with $7 gains in the day as the U.S. dollar falls away weighed by shrink U.S. yields and ends with U.S. shares market better-bid, trading at 1876.8 as of writing. Meanwhile, In the U.S. calendar side, Initial Claims rose less than expected and Philly Fed index missed the estimates at 31.5 figures for the month of May.For moving average side, 15-long SMA indicator retained it slope to upside trend and 60-long SMAs indicator retaining it north side momentum. For RSI side, inidcator show 61 figures, suggesting toward to bullis market in short term.

At current stage, Gold seems to heading the challenge of three-month highs despite U.S. central bank’s tapering delimma. Overall, we see gold has steadied above downside trend after recent days spiral. For long perspective, we still believe downside trend will be a pivotal support level. Furthernore, we hope the 1850 level could firmly defend if any upwind move.

Resistance: 1900

Support: 1850, 1812.88, 1800, 1763.837

               

Economic Data

Currency

Data

Time (GMT + 8)

Forecast

AUD

Retail Sales (MoM) (Apr)

09:30

GBP

Retail Sales (MoM) (Apr)

14:00

4.5%

EUR

German Manufacturing PMI (May)

15:30

65.9

GBP

Composite PMI (May)

16:30

60

GBP

Manufacturing PMI (May)

16:30

60.7

GBP

Service PMI (May)

16:30

60.1

EUR

ECB President Largarde Speaks

19:00

CAD

Core Retail Sales (MoM)(Mar)

20:30

2.2%

USD

Existing Home Sales (Apr)

22:00

6.09 M