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CAD drifting, Manufacturing Sales nextOn Thursday, the Canadian dollar has posted small gains. In the North American session, USD/CAD is trading at 1.2147, up 0.11% on the day. The Canadian dollar has been on a tear lately. USD/CAD has fallen 1.32% in May and the Canadian dollar hasn't suffered a losing week since March. Canada's economic recovery has been bumpy and lockdown restrictions remain in place, but the Canadian dollar has jumped on the bandwagon and posted impressive gains against a wobbly US dollar, which has struggled in the second quarter. Canada releases Manufacturing Sales on Friday (12:30 GMT). The February reading hit a 6-month low, at -1.6%. However, we expect a strong rebound for March, with a consensus of 3.5%. If the release is within expectations, we could see the Canadian dollar respond with gains. We've been hearing about inflationary pressures in the US for months, and the April inflation report confirmed these concerns. CPI was much higher than anticipated. Headline CPI jumped 4.2% year-on-year, up from 2.6% and above the estimate of 3.6%. The surge in inflation has increased speculation that the Fed may consider reducing its asset-purchase programme of USD120 billion sooner rather than later. Such a tightening of policy would be bullish for the US dollar. Investors are clearly concerned that higher inflation is not temporary, but how will the Fed respond? On Tuesday, prior to the CPI release, Fed Governor Lael Brainard said that inflation risks are a "transitory surge" and urged the Fed to remain patient and continue its ultra-dovish monetary policy. Brainard pointed to the weak nonfarm payrolls report last week as an indication that the US recovery still has a ways to go, saying that, "today, by any measure, employment remains far from our goals.” There are voices calling for a re-examination of the Fed's current policy, as Fed member Robert Kaplan stated recently. For the time being, however, the Fed remains committed to its ultra-accommodative policy. If upcoming inflation reports show that higher inflation appears to be sustainable, the Fed may have to backtrack and take a hard look at tapering QE.
by OANDA
Red-hot pound punches past 1.41, GDP nextThe pound is in positive territory on Tuesday. In the European session, GBP/USD is trading at 1.4144, up 0.20%. The Scottish National Party (SNP) handily won the Scottish election, but investors sighed with relief as the pro-independence party came up just short of a majority. This means that plans for another referendum on Scottish independence may be delayed, which should ensure political stability for the time being. The pound responded with huge gains of close to 1.0% on Monday. The British government has given the green light for a further easing of health restrictions, as of May 17. The positive news on the Covid front has also been bullish for the streaking pound. Attention has shifted to UK GDP for the first quarter, which will be released on Wednesday (6:00 GMT). The market is bracing for a contraction in GDP. This would reflect the lockdown that was in effect for much of the first quarter and had a chilling effect on economic activity. The consensus stands at -1.6% (MoM) and -6.1% (YoY). Inflation concerns have been dominating the financial markets, sending equities lower and boosting the safe-haven US dollar. The US and China, the world's two biggest economies and both showing signs of rising inflationary pressures, which is causing jitters for investors. In China, PPI climbed 6.8% (YoY), above the 6.5% forecast and up sharply from 4.4% in March. The US releases April inflation numbers on Wednesday. The consensus stands at 2.3% for Core CPI (YoY), compared to 1.6% in March. If Core CPI matches or exceeds the estimate, investors may be of the opinion that the Fed may have to tighten policy sooner rather than later, which would be bullish for the US dollar. GBP/USD is testing resistance at 1.4137, followed by resistance at 1.4269. There are support lines at 1.3859 and 1.3727
by OANDA
1
Will Japan Household Spending rebound?The Japanese yen is drifting in the Monday session. In North American trade, USD/JPY is trading at 108.67, up 0.05%. The yen has posted four winning weeks out of the past five, as the US dollar continues to struggle. Still, the US/Japan rate differential continues to support USD/JPY, which remains in no man's land slightly below the 109 level. Japan will release Household Spending (GMT 23:30), and the consumer spending indicator is expected to rebound after two straight declines of 6.1% and 6.6%. The March release is projected to show a gain of 1.7%, which would mark a five-month gain. The market was gearing up for a blowout party from US nonfarm payrolls on Friday. In the end, however, the economy created just 266 thousand jobs, nowhere near the estimate of 990 thousand. There were expectations that NFP would break above the one-million mark, and some analysts even projected a reading above the two-million mark. The unemployment rate rose to 8.1%, up from 7.8%. Still, the news was not all bad, as wage growth rebounded with a strong gain of 0.7%, after a read of -0.1% beforehand. The US economy remains in good shape, and investors are unlikely to let a weak NFP report ruin optimism over the economy. The Fed has maintained a dovish stance, even with the economy posting strong numbers. The disappointing nonfarm payroll report appears to have justified the Fed's position, but investors will be keeping a close eye on this week's inflation numbers. A sharp rise in inflation could renew calls for the Fed to consider tapering. On the other hand, if the upcoming inflation numbers are weaker than expected, there will be less pressure on the Fed to change its accommodative policy. USD/JPY is facing resistance at 109.42. Above, there is resistance at 110.24. On the downside, there is support at 108.06 and 107.52
by OANDA
Aussie steadies after slide, RBA nextThe Australian dollar is steady in the Monday session. In European trade, AUD/USD is trading at 0.7722, up 0.14%. The US dollar showed some broad strength on Friday, and AUD/USD fell 0.70% and briefly fell below the 0.77 level. The greenback was supported by inflows from international investors who snapped up US Treasuries in month-end rebalancing flows. Strong US numbers on Friday also gave the US dollar a boost. The Core PCE Price Index, which is considered the Federal Reserve's preferred inflation gauge, rose to 0.4% in March, up from 0.1% beforehand. This is another indication of inflationary pressures, as the US economy continues to sprint at a fast pace. The Fed has stated more than once that any spike in inflation will be temporary, but it's not at all clear that the market has bought into this stance. If inflation numbers continue to rise in the coming months, the Fed may have to acknowledge that higher inflation levels are not a passing event. On Friday, Fed Governor Robert Kaplan, who is not a voting member, said straight out the Fed needs to be talking about tapering its asset-purchase program. The Fed has insisted that it needs to keep its foot to the pedal as the economy continues to recover, but there's a good chance that other Fed members agree with Kaplan. The US economy has been reeling off impressive numbers, and the April nonfarm payroll report is expected in at 975 thousand. A print above the one million mark is certainly achievable and would provide ammunition to the view that the Fed should review its current policy. The RBA is facing a similar economic picture to that of the Fed - a rapidly improving economy and strong growth. Like the Fed, the RBA has implemented a highly accommodative policy in order to support the economy's recovery from the Covid pandemic. The central bank holds its policy meeting on Tuesday (4:30 GMT), and the bank is expected to maintain interest rates at 0.10% and its QE programme of A$100 billion. Unless there is a surprise announcement, I would expect the RBA meeting to be a non-event for the Australian dollar. On the upside, 0.7787 is the next resistance line. Above, there is resistance at 0.7864. On the downside, there are support levels at 0.7665 and 0.7620
by OANDA
Macro - Inflationary ShockModel Forecast for Inflation: - Model has forecasted an inflationary shock a la oil & Volcker in 1970s-1980s. - The date is November-December 2021 or 2022. - The nature of the event has yet to be determined, but it is speculated that the shortage will be in liquidity itself. - This will be followed by aggressive global monetary policies to combat stagflation, but a period of deflation will follow. - It is likely that a financial lockdown, and a restructuring of the global financial system will occur. GLHF, DPT Disclaimer: We absolutely do not provide financial advice in any shape or form. We do not recommend investing based on our opinions and strongly cautions that securities trading and investment involves high risk and that you can lose a lot of money. Loss of principal is possible. We do not recommend risking money you cannot afford to lose. We do not guarantee future performance nor accuracy in historical analyses. We are not registered investment advisors. Our ideas, opinions and statements are not a substitute for professional investment advice. We provide ideas containing impersonal market observations and our opinions. Our speculations may be used in preparation to form your own ideas.
FX_IDC:XAGUSDLong
by UnknownUnicorn1043646
1
USDCHF to Bottom Out Soon The dollar depreciated yesterday and is currently headed towards the 100-day MA (in blue). Notice that the latter is threading near the 23.6% Fibonacci retracement level at 0.90347, which is where the downswing is likely to bottom out. The bearish correction is likely to take the form of an ABC structure given that it emerged from the preceding 1-5 impulse wave pattern, as postulated by the Elliott Wave theory. This is further substantiated by the fact that the correction appeared from the 61.8 per cent Fibonacci retracement at 0.94670. Expect the USDCHF to consolidate in a range between the 23.6 per cent Fibonacci and the 38.2 per cent Fibonacci retracement at 0.92000 in the medium turn, taking the form of said ABC correction. The significance of this consolidation range is further exemplified by the fact that it is currently encompassed by the 100-day MA and the 50-day MA (in green). The current trending sentiment is elucidated by the ADX indicator, which has been threading above the 25-point benchmark since the 26th of February. Accordingly, the bullish upswing is likely to be restarted after the price tests the 23.6 per cent Fibonacci for a second time - point C.
Long
by Trendsharks
Important Level For DXYHi all! I think we are facing a pivot for the DXY that could bring significant changes to global markets. IF the DXY doesn't Hold the 90 level and bounce higher, THEN I believe we are looking at new highs across the risk asset spectrum with the DXY going into tail spin and falling out of this macro down trend channel, possibly to the low 80's even. However, IF DXY does hold the 90 level and bounces with confidence, I believe it will be the sell signal and risk off signal across the risk asset spectrum. And of course, this could send DXY well above the down trend channel its been in. CPG's are planning on raising prices by an avg of 10% next few months so inflation is real regardless of what the market makers *cough cough* sorry I mean Fed chair persons think are going on in the economy. All my models had 10% inflation baked into them as an assumption back in Dec. '20, and subsequently they priced the SPY at 420. We keep getting close to it and seem to be floating there in a state of euphoria, no? Idk, but sounds like 420 to me haha. Hoping we have a correction to ease pressures on the system, but am worried about a crash tbh. I think risk is expensive and safety is worthless so buy insurance and go ham fam! My ideas are strictly my opinions and are not advice or recommendations. Please make every effort to understand all risks associated with investing or trading any security before purchase or sale. Not Financial advice. Not financial recommendation. Just my personal opinions. JG
TVC:DXYLong
by deadsquare214
8
Head And Shoulders Pattern on the EURUSD The EURUSD appears to be developing a major H&S pattern, which is typically taken to indicate emerging bearish reversals, ahead of FED's April policy meeting. The expected upsurge in volatility later today and tomorrow (advance U.S. GDP data scheduled for release) would demonstrate whether such an H&S pattern is really in the making. Notice that the Neckline is positioned at the massively important psychological support level at 1.20000, which serves the role of a prominent turning point. That is why a potentially decisive breakdown below the H&S's Neckline would confirm the beginning of a new downtrend. The 23.6% Fibonacci retracement level serves as the first major target for such a downtrend.
Short
by Trendsharks
Is Tesla's Rally Running on Fumes?Tesla is set to post its quarterly earnings after today's market close. While the market expects the company to deliver robust performance, the continuation of the underlying rally is far from certain. The general stock market rally has been showing signs of weakness over the past several weeks amidst rising U.S. yields and fears of soaring inflation. Meanwhile, FED's policy decision on Wednesday could bring further doubt and volatility, which could then jolt Tesla's uptrend. Today's earnings data could end up being the catalyst for a new correction; however, the underlying upswing may still attempt to test the psychologically significant resistance level at 800.00 before such a correction takes place. The Fibonacci retracement levels signify the likely targets for such a dropdown
NASDAQ:TSLA
by Trendsharks
HOLY WEEK AND NUCLEAR WEDNESDAY !! HOLY WEEK AND NUCLEAR WEDNESDAY! 10:30 p.m. Warm morning sun, some nature chirping from the birds around, a great time to enjoy a coffee. Start HOLY WEEK! Financially speaking, after a recovering Friday, it would be natural for the green to flood the Square today. And maybe it will be! But we can't help but glance over the cup of coffee at the situation of the week that seems hectic. First of all, thanks to reports, a number of world giants must be in the works. But this is not necessarily the problem, because they are expected to report well. The problem would be Wednesday, a really explosive day. Let's see why: 1. Biden's speech. Nothing can be more worrying than Biden's speech at Wednesday's joint congressional session, where he is expected to reveal the first details of his widely reported tax hike so far, planned for the wealthiest of Americans. The president of all wants an unlikely 43.4% for the richest Americans, bringing combined state and federal taxes to places like New York and California to over 50% !! No matter how difficult it will be for him to impose in the congress, in the short term the Market will react to rumors. 2. OPEC meeting Normally this meeting would sanctify the plans established a month ago if no other events happen in the last period. But ... didn't it happen ?! Well, India is the world's third largest consumer of oil, on infusions and fans literally, after a series of days with over 300k infections / 24 hours. Japan, the 4th largest consumer, also has problems with Covid ul. Iran lags behind with progress in talks with US, which may mean it will export oil again sometime in the not too distant future 3. EDF meeting Originally categorized as a NON Event, it could be an influence in various directions. Of all, I would mention the Precious Metals Market. In a long-awaited recovery, they have already stumbled at the first resistance, diverted by various external factors. One could be Powell, who enters an interview with Reuters on Tuesday, said the central bank will limit any exceeding of its inflation target. In any case, metal prices are expected to consolidate, or even decline, until Powell's post-Fed press conference. As a result, we have 3 events + quarterly reports, which can send almost any sector in almost any direction, affecting virtually the entire market. Normally, near such confluences, investors stand a little aside. Normally I said, but is it a period of normalcy !? Of course not !!! So we have 2 interesting days until Wednesday, when we hoped we would have: EVERYTHING ABNORMALLY GREEN !!!
NYSE:DOW
by Viorex
HIGHER FOOD PRICES!Coffee is one of the most consumed and traded commodities on earth, and it's price is about to explode! FUNDAMENTALS: -Despite quadrillions of currency units (DEMAND) created over the past 50 years, coffee prices are only slightly higher...this is because of the massive amount of coffee production around the world (SUPPLY) keeping a ceiling on prices. Debased fiat currencies (DEMAND) will prevent any significantly lower prices and make higher prices inevitable. -Currency creation however is being ramped up to unprecedented levels (DEMAND) and increased government intervention around the world will hinder continued global production (SUPPLY). -Weakness in the dollar relative to the currencies of coffee-producing nations (DEMAND) will bid up prices. -Rising energy prices will increase costs (SUPPLY), pushing prices higher. -A period of record cold temperatures linked to the Grand Solar Minimum will lead to slowing and potentially shrinking production (SUPPLY) TECHNICALS: -The 10$ price range of 115-125$ per contract with the most volume has been successfully absorbed. -A massive amount of volume was traded at 50-75% lower prices from the 2011 peak, at the lowest levels in over a decade. -A price-volume divergence has occurred, as during the correction from the 2011 peak volume continually increased. -The corrective descending wedge from the 2011 peak has been broken and retested by bullish reversal candlestick patterns. -Volatility has continually decreased for over two decades as prices have remained subdued, therefore an inevitable increase in volatility will likely occur during/after a significant increase in prices.
ICEUS:KC1!Long
by UnknownUnicorn4195243