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The benchmark S&P 500 dropped for a second day after setting a…

The benchmark S&P 500 dropped for a second day after setting a record high on Friday

20210512
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Market Focus

Energy, financial and industrials shares led U.S. stocks lower as the pullback centered in the technology sector widened while investors remained on edge over the threat of inflation.

The tech-heavy Nasdaq 100 erased a loss of almost 2% to finish little changed as some dip buyers emerged. The benchmark S&P 500 dropped for a second day after setting a record high on Friday. Treasury yields edged up and the dollar traded near the lowest levels of this year.

Debate rages over whether the expected jump in price pressures will be enduring enough to force the Federal Reserve into tightening policy sooner than current guidance suggests. Fed Governor Lael Brainard said policymakers must show continued patience as distortions in the post-pandemic boom sort themselves out while the economy is still far from the central bank’s objectives.

Among the biggest pandemic winners, tech stocks whose valuations often depend on earnings prospects far into the future are now at the center of the inflation debate. That was epitomized in Cathie Wood’s Ark Innovation ETF, which has tumbled about 15% so far this year after surging almost 150% in 2020.

Main Pairs Movement

The dollar erased losses as the stocks fell for a second day. Still, the greenback remained lower against most of its Group-of-10 peers as investors focused on inflation concerns with a report due Wednesday that may show a quickening in price increases in April. The pound extended gains for a third session.

The rise in yields also helped the greenback; U.S. 10-year Treasury yields rose through the 50-DMA level to 1.6289, the highest since May 3. Broad-based gamma demand is appearing ahead of U.S. consumer inflation data Wednesday with traders positioning for a price surge and dollar weakness. The surge in prices of commodities in recent days is also intensifying the debate about inflation and the timing of tapering in central-bank accommodation.

A spike in futures turnover helped drive the day’s high; month-end hedging near 1.2150 keeps pair supported; offers anticipated near 1.2200, according to traders. EUR also seeing demand gamma ahead of U.S. CPI data. USD/JPY slid 0.2% to 108.64, Pair seems to find support ahead of 108.34, the May 7 March 10 lows.

Technical Analysis

EURUSD (4 hour Chart)

Euro fiber has experienced a struggle to continued gains in earlier momentum that once propel to last day high before retreating to the current stage, trading at 1.2147 with 0.15% higher as of writing. From the report, “The ground for the euro area recovery is getting firmer and firmer” a European Central Bank council member said. For the technical aspect, the RSI indicator shows 58.7 figures, which suggests a slightly bullish movement expectation. On average price view, 15-long SMA indicator turn flatter move and 60-long SMA turned upside slope in day market.

We foresee the market is pretty optimistic for gain traction in further movement if it can hold above 1.2105 level. On the down way, the first immediate support level is eye on 1.2105 level, 1.207 and 1.2 following. On the up way, we see 1.215 level will be the first tackle resistance as the market tamp down which is formed by the price cluster area.

Resistance: 1.215, 1.22

Support: 1.2105, 1.207, 1.2

GBPUSD (4 Hour Chart)

Sterling is trading higher by 0.17%, trading at 1.4141 as of writing, extended its recently strong movement to the upper stack on relief over the Scottish election results, improved economic forecasts, and lockdown easing estimations. For the RSI side, the indicator has remained over the bought sentiment with 74 figures while the market retreat under 1.4155 level. On the other hand, 15 and 60-long SMAs indicator are accelerating their upward slope.

In the day market, the sterling slightly moves when investors are awaiting GDP data ahead. In the meantime, the chairman of BoE will speak after the data release. Therefore, we expect the market will be impacted by the aforementioned event with a roller coaster move. Nevertheless, we remain optimistic for upward traction as it seemingly heading to 1.42 level which closes to the last highest spot after it breaks through a month-long bottom patter where the neckline is on 1.4 level. Since we see first immediately defend barrier is on 1.4 and 1.396 following.

Resistance: 1.4155, 1.42

Support: 1.3959, 1.4

USDCAD (4 Hour Chart)

Loonie continues to move slightly downside way around 1.21 level which is struggling to aim direction in recently, trading at a lower position at 1.2098 as of writing. Meantime, WTI crude oil traveling at higher step with nearly 0.8% in the day, copper also getting higher with 1.7% gains intraday which breach all-time peak in history. For the RSI side, the indicator bounced back from over sought territory to 30 thresholds. For the moving average side, 15 and 60-long SMAs indicators are remaining in descending movement.

We see price momentum seemingly gird around 1.21 level after it touched down in the day market. Moreover, price is forming a cluster area while low bound setting at 1.2079 where we believe is a short-term first support line.

Resistance: 1.2264, 1.238, 1.2491

Support: 1.2079

20210512
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Copper jumped to a record while iron ore futures surged more than…

Copper jumped to a record while iron ore futures surged more than 10%, adding to concern about inflation

20210511
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Market Focus

Technology shares led U.S. stocks lower as surging commodity prices stoked concern about whether inflation will derail a growth rebound in the world’s largest economy and spoil a record stock rally.

The tech-heavy Nasdaq 100 Index tumbled 2.6% amid the growing anxiety over inflation, which can threaten longer-horizon revenues typical of the sector. Tesla and Apple were among the biggest decliners. The ARK Innovation ETF resumed its slide. The Dow Jones Industrial Average briefly topped 35,000 for the first time. The benchmark S&P 500 fell from an all-time high. Treasury yields edged higher as traders brace for a busy week of auctions.

Copper jumped to a record while iron ore futures surged more than 10%, adding to concern about inflation. West Texas Intermediate fluctuated after a cyberattack forced the closure of a key U.S. pipeline, which operators hope to reopen by the end of the week.

The run-up in raw materials is intensifying debate ahead of a U.S. CPI report Wednesday that is forecast to show price pressures increased in April. The data will be closely watched by policymakers at the Federal Reserve trying to gauge the speed of the recovery after job growth significantly undershot forecasts.

Main Pairs Movement

The dollar pared losses as equities weakened and some commodities fell. The British pound jumped to its highest since late February against the greenback after the Scottish National Party’s election showing pushed back the risk of an imminent vote on independence.

Currency price action may be influenced by cross-border bond issuance including Canada announcing its first U.S. Dollar bond sale since pandemic and as China Railway Construction eyes debut euro bond.

GBP/USD rose as much as 1.2% to 1.4158, the highest since Feb. 25. The pound was also buoyed by corporate and options buying and interest from macro accounts to reestablish long sterling positions.

Commodity-linked currencies from Australia, Canada, and New Zealand pared intraday gains. AUD/USD was little changed after earlier advancing by as much as 0.6 to the highest since late February; AUD saw interest in 2-month 0.8025 call options. NZD/USD rose as much as 0.1% to 0.7272. USD/CAD slid by 0.3% to 1.21, the lowest since September 2017.

Technical Analysis

EURUSD (4 hour Chart)

Euro fiber once touched topped of the day at 1.2171 level before trims intraday gains, holding negative territory while close to the end of the day, trading below 1.215 level at 1.213 as of writing. At the same time, the greenback remains the weakest currency across the boarded-FX market. For the technical aspect, the RSI indicator shows 58 figures, which alleviates recent over-bought sentiment that pushes down to smooth thresholds. On average price view, 15-long SMA accelerating its ascending slope and 60-long SMA turned its slope to the teeny-tiny upside in day market.

We foresee the market is pretty optimistic for gain traction market seems to build upward momentum despite eurodollar correction it bull movement. On the down way, the first immediate support level is eye on 1.2105 level, 1.207 and 1.2 following. On the up way, we see 1.215 level will be the first tackle resistance as the market tamp down which formed by the price cluster area.

Resistance: 1.215, 1.22

Support: 1.2105, 1.207, 1.2

GBPUSD (4 Hour Chart)

Sterling has raised overall among the top performance on Monday, following last week’s elections. After touching its highest level since Feb at 1.415 around in early Amerian session, the pair holding a slightly move phase, trading at 1.4122 with a 1% rise. For the RSI side, the indicator has breached 78 figures which show the market is experiencing a torrid sentiment. On the other hand, 15 and 60-long SMAs indicator are accelerating their upward slope.

In the near term, the sterling is likely to eye on this week’s U.K. data releases and BoE governor speaking after the good news of the main party pushing for independence in Scotland failed to win. At the current stage, we believed the pound could challenge for the higher stack to toward the last peak at 1.42 around as the market is piling into a long position. However, BoE Governor will speak tomorrow to prospect the eco outlook that could drive wrong-foot fluctuation. For bull favor, the first immediate support is tracking psychologically spot on 1.4 level.

Resistance: 1.4155, 1.42

Support: 1.3959, 1.4

USDCAD (4 Hour Chart)

Loonie had another downside tractions which step down the 1.21 level as the greenback remains poor movement and broadly stronger commodities prices in the day market, trading day to day low at 1.2092 as of writing. Meantime, WTI crude oil traveling at bear step with a slight move in the day but industry material are edged higher stage as expectation of price inflation seems on the trajectory. For the RSI side, the indicator shows 22 figures which suggest an over sought sentiment, moreover, it consecutive for days long. For the moving average side, 15 and 60-long SMAs indicators are remaining in descending movement.

We see price momentum seemingly gird around 1.21 level after it touched down in the day market. Therefore, we expect the market will eye on downside correction movement as it fell to the current stage.

Resistance: 1.2264, 1.238, 1.2491

Support: 1.21

20210511
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The U.S. unemployment rate edged up to 6.1% and payrolls increased by…

The U.S. unemployment rate edged up to 6.1% and payrolls increased by just 266,000

20210510
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Market Focus

Stocks climbed to a record after surprisingly weak jobs data eased fears about higher inflation and a cutback in the stimulus. The dollar slumped, while Treasuries were little changed.

All major groups in the S&P 500 rose, with energy, real-estate, and industrial shares leading the charge. Earlier in the day, technology-led equity gains as softer economic data drove investors into the perceived safety of pandemic darlings – mega-caps flush with cash and stay-at-home stocks. A gauge of giant growth companies such as Apple Inc. and Amazon.com Inc. pared most of its advance.

The long-awaited employment data rattled markets, with payrolls up only 266,000 in April, trailing the projected 1 million surges. For several analysts, the figures may give a boost to President Joe Biden’s $6 trillion economic agenda and another reason for the Federal Reserve to keep its accommodative stance. Treasury Secretary Janet Yellen said the report “underscores the long-haul climb back to recovery,” while retaining her expectation of a return to full employment next year.

Federal Reserve Bank of Minneapolis President Neel Kashkari told Bloomberg Television he has “zero sympathies” for critics on Wall Street, who slam the central bank’s aggressive support of the U.S. economy while millions of Americans remain out of work.

“We need to rebuild this labor market and put them back to work. Then there will be plenty of time to normalize monetary policy,” he said.

Main Pairs Movement

A gauge of the dollar slumped to a 10-week low after U.S. job growth missed all estimates and as stocks rose on easing inflation concerns. The euro advanced to the highest in more than two months amid short-covering.

Dollar Spot Index slid as much as 0.665%, the most since December after data showed the U.S. unemployment rate edged up to 6.1% and payrolls increased by just 266,000 after a downwardly revised 770,000 March increase, well short of projections. The dollar also came under pressure as the offshore yuan posts its biggest advance in four months.

The euro climbs as much as 0.8% to $1.2165 amid short-covering and after ECB governing council member, Martins Kazaks said that a June decision to slow down bond-buying is possible if the economy doesn’t deteriorate. EUR/USD implied are higher across the curve with 1-year climbing to as high as 6.4350, the highest level since March 24.

On the week, commodity currencies led gains against the dollar, as prices of raw materials continued to soar. GBP/USD gained as much as 0.8% to 1.4, falling just short of the 1.4009 level last seen on April 20. USD/JPY was down 0.4% to 108.71 after earlier sliding as much as 0.7% to 108.34, the lowest since April 27.

Technical Analysis

EURUSD (4 hour Chart)

Euro fiber extended its yesterday upward momentum to approached a 2-month high on 1.216 level after U.S. unveiled an extremely disappointed NFP data that miss 1 million job gain versus 266 K actually, trading at 1.2164 as of writing. For the technical aspect, the RSI indicator shows 76 figures, suggesting an over-bought sentiment at least for the short term. On average price view, 15-long SMA accelerating its ascending slope and 60-long SMA turned it slope to the teeny-tiny upside in day market.

We foresee the market it pretty optimistic for gain traction as it edged higher than the last peak. Meanwhile, the market seems to try toward to next psychological level at 1.22. Therefore, we expect the first immediately downside support level will be the peak of last time at 1.2151 and 1.2106 following.

Resistance: 1.22

Support: 1.207, 1.2105, 1.215

XAUUSD (4 Hour Chart)

Gold consecutive it bull movement once breached to 3 months peak at 1843 and had a correction for it gain traction aftermarket digest the poor US NFP data, trading at 1832. Meantime, U.S. 10 years Treasuries yield has fallen to 1.5% stage which is testing the neckline of the 2-month-long double top pattern. For the RSI side, the indicator shows 73 figures which show the market is experiencing a torrid sentiment. On the other hand, 15 and 60-long SMAs indicator are accelerating their upward slope.

At the current stage, it seems market pricing for bullish trade while gold market without any cap pressure. However, we verdict that soared up rapidly in short term market could motivate take profit momentum. Therefore, for bull favor, first, immediately downside support at 1812.8 and psychological level at 1800 will follow. On up way, we expect there has another take profit level on 1850.

Resistance: 1850

Support: 1812.8, 1800, 1760

USDCAD (4 Hour Chart)

Loonie had a fluctuating movement in the day market and toward another day to day low level, trading at 1.2137 as of writing, while market reacted mix of upsetting US job data and Canada’s unemployment rate also miss the 7.8% expectation that figure show 8.1% of actual. Meantime, WTI crude turns negative territory to the positive area after the U.S. session, and copper was edging up to a record-setting level. For the RSI side, the indicator shows 22 figures which shows the market is on an over-bought sentiment recently. For the moving average side, 15 and 60-long SMAs indicators are remaining in descending movement.

Overall, we foresee the market will continue its downside movement as bearish momentum is still in favor of traction. On the slid way, we expect to sell position will incent strong take profit on the psychological level at 1.21.

Resistance: 1.2264, 1.238, 1.2491

Support: 1.21

20210510
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