Daily market analysis

April 22, 2021

Daily Market Analysis

Market Focus

Asia stocks are poised to bounce after U.S. equities snapped a two-day drop on a rally in companies that stand to benefit the most from an economic revival. The dollar fell, while Treasuries stabilized.

Futures pointed higher in Japan, Australia and Hong Kong. Most major groups in the S&P 500 rose, with raw-material, energy and financial shares leading the charge. The Russell 2000 Index, a gauge of small caps, climbed more than 2%, outperforming major benchmarks.

Oil fell for a second day with an increase in U.S. crude inventories compounding concerns around a choppy global demand recovery. Gold edged higher.

Equities rebounded as traders sifted through corporate results for signs on whether an anticipated jump in profits would bring with it forecasts for stronger growth. Earlier losses were driven by concern over a flare-up in coronavirus cases around the world that could jeopardize an economic rebound, particularly with stocks trading near their all-time highs.

Main Pairs Movement:

The Canadian dollar rallied after policy makers pared back their bond buying program, making Canada the first major economy to reduce emergency levels of monetary stimulus. A gauge of the U.S. dollar retreated as stocks rebounded and commodity currencies edged higher.

USD/CAD fell as much as 1.2% to 1.246, the most since June 2020, backtracking on an earlier gain of 0.4% while the central bank said the recovery will still need extraordinary support, it also indicated that it’s bringing forward its expected timeline for rate increases.

NZD/USD climbed 0.5% to 0.7211, while AUD/USD rose 0.4% to 0.7762. USD/JPY erased an earlier decline to be little changed at 108.12.

EUR/USD fell less than 0.1% to 1.203 after earlier slipping as much as 0.3%. The European Central Bank meeting on Thursday carries little risk of setting off fireworks in the currency market.

Technical Analysis:

EURUSD (4 Hour Chart)

Euro dollar choppy in the day in a tiny range for second consecutive day, trading at 1.2034 as of writing. In day movement, euro dollar once slipped to 1.2 in earlier session then rebound from strong psychological level. For technical side, even though RSI indicator once went down to 50 figure, it pull up to 58 figure while market close which suggest a bull movevment ahead. On average price perspective, 15 and 60-long SMAs indicator still held ascending momentum. Therefore, for price action perspective, we believe euro dollar still have room to north side.

On the other hands, investors wait for the tomorrow ECB rate decision. Most market participant expect ECB could more clarify on Crisis Exist subject.

Resistance: 1.2071, 1.2106

Support: 1.199, 1.192, 1.1877

GPBUSD (4 Hour Chart)

Sterling has bounced back above 1.39, recovering it earlier session loss amid U.K. CPI missed expectation with 0.7% and PM warn of next covid wave whilst greenback reward from risk-off sentiment in share market. For technical side, RSI indicator shows 57 figure, suggesting a slighty-bull movement expectation. On Moving Average view, both 15 and 60-long SMAs indicator retain upward trend.

For price action side, we see sterling obtain a retreatment on 1.39 where is neckline of double bottom we considered a strong support level. Therefore, we expect market still have a bullish movement in further marketplace but it have defend 1.39 level while correction term.

Resistance: 1.4, 1.3959

Support: 1.39, 1.3822, 1.3796

XAUUSD (4 Hour Chart)

Gold has hovered two consecutive day while it is towarding to 1800 level as greenback weakens, trading at 1793.79 as of writing. A slipped of greenback as well as U.S. 10 year Treasuries yields boosted metal sharply up. Meantime, an improvement in market sentiment helped gold. For RSI view, indicator is close to the 70 figures which mean market gradually situate in over bought sentiment. On average price side, long and short-term SMAs indicator are both retaining it downwind trend.

All of all, we feel optimistic for upcoming bull market movement. However, we see strong pyschological resistance at 1800 on upper side. Therefore, if we have to keep upward momentum, any correction need to be stop at $1759.7 level on slid way.

Resistance: 1800.7, 1812.8

Support: 1759.7, 1754.5, 1722.75

Economic Data