Daily market analysis

May 24, 2021
   

Daily Market Analysis

Market Focus

Technology companies led a rebound in U.S. equities on Thursday after a report showing U.S. stocks were mixed after investors were whipsawed in part by volatile trading in high-risk assets such as Bitcoin amid lingering concerns about the outlook for inflation. Oil rose for the first time in four trading sessions.

The S&P 500 closed little changed after erasing earlier gains when Philadelphia Fed President Patrick Harker said the central bank should speak about reducing bond buying sooner rather than later. The tech-heavy Nasdaq 100 finished lower, while the Dow Jones Industrial Average gained as investors shifted from growth to value favorites such as Boeing. Bitcoin resumed its selloff Friday after China reiterated a warning that it intends to crack down on currency mining as part of an effort to control financial risks.

European shares climbed earlier on prospects of easing lockdowns and as services data signaled a recovery. Asian shares were mostly higher, although they slipped in China.

China has long expressed displeasure with the anonymity provided by Bitcoin and other tokens, and warned earlier in the week that financial institutions weren’t allowed to accept it for payment. China is home to a large concentration of the world’s miners, programmers who use massive computing power to verify transactions on the blockchain.

The global economic revival, the risk of a significant pickup in inflation and Covid-19 flareups in some parts of the world continue to shape market moves. Stocks have been volatile this week, with speculative ardor cooling as minutes from the latest Fed meeting flagged the possibility of a debate at some point on scaling back stimulus measures. Still, better-than-forecast jobless claims data on Thursday buoyed sentiment.

     

Main Pairs Movement:

The dollar outperformed its Group-of-10 currency peers Friday as a gauge of output at U.S. manufacturers and service providers set a record in May, reflecting strength in the economic recovery. The euro retreated from a key level as investors cut long positions. Treasury yields were little changed, and the dollar gained. Gold dropped from its highest level in more than four months.

Among G-10 peers, the krone was the weakest and is on track to be the worst performer this week; the pound topped all this week, while the loonie was poised for a seventh straight weekly advance, the longest run since September. USD/CAD +0.1% at 1.2077; poised for a weekly drop of 0.2%.

USD/JPY +0.2% to 108.95; pair still heading for weekly drop of 0.4%; spike in activity after U.S. Markit PMIs; pair tracking Treasury yield-curve flattening.

Bitcoin is heading into the weekend in freefall again after a fresh warning from Chinese officials over cracking down on currencies.

The largest digital currency fell as much as 10% in late Friday trading to as low as $35,636, and peer tokens also posted double-digit losses. The coin almost hit $30,000 earlier in the week, after ending May 14 at $49,100.

          

Technical Analysis:

EURUSD (4 hour Chart)

After moving upside bounder near 1.223 in the earlier trading session, the euro fiber cap under bearish stress and hiting the daily low of 1.217, slightly back up way, trading at 1.2184 as of writing. The sheen greenback upward strength amid HIS Markit reported on Friday, the business activities in the private sector expanded at a record setting pace in May with the Manufacturing PMI and Service PMI that both reach to a sanguine high at 61.5 and 70.1, respectively. Meanwhile, German PMI data missed the estimation of 65.9 versus publish 64. For technical aspect, RSI indicator set around 47 figures which shows market sentiment turn to slightly-bearish moementum. On average price view, 15-long SMA indicator turn it way to southside while market continued choppy in a range and 60-long SMA retained upside slope yet turn flat move.

As we mention in recently, euro seems fail to defended the 1.22 level as it keep mess around in confined range. On the other hands, RSI indicator and short term moving average are both show a weakness of buy side momentum. Moreover, in price action aspect, euro fail to build a sideway comfort support area; instead, form a double head pattern.

Resistance: 1,22

Support: 1.2151, 1.2106, 1.207

                 

GBPUSD (4 Hour Chart)

Sterling retreadted sharply after touched 1.4233 the highest level since Feb, dropped to nearly day lows at 1.4156 amid dollar hype to 90 threshold as the highs across the board. The benchmark of U.S. 10 years Treasuries yields move tiny changed in the day while the performance of U.S. eco data shows mixed as positive in PMI and home sales fail to estimation. Nevertheless, tri-PMI data shows strong economy performance in recent, still could not thrive the market to upside. For RSI side, indicator shows 40 figure which nearby a neutral market movement after sterling sharply slum. On the other hands, 15-long SMA indicator remain smooth move 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.

Resistance: 1.42

Support: 1.3959, 1.4, 1.4108

           

XAUUSD (4 Hour Chart)

Gold extended it consolidative sideways price action throughout the European session and remained confined in a limited range, slight above 1875 stage, trading at 1879.7 as of writing. 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 58 figures, suggesting a room for up way in forthcoming.

At current stage, gold try climbed to closer multi-month perch while seems lack of a bull momentum, however, it jumped to 1888 level in earlier session. We still believe gold market is eyeing $1900 mark, wating for follow-through buying stimulation. 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

NZD

Core Retail Sales (QoQ)

06:45

USD

FOMC Members Speaking

Tentative