Analytics

The safe-haven dollar saw a solid bounce from local lows due to the resurgent demand as risk-off tone dominates global financial markets these days. The USD index is now back above the 102.00 mark and seems poised for further gains in the near term, especially as traders are getting more nervous ahead of the US inflation report due on Friday.

Against this backdrop, the euro showed little reaction to fresh economic data out of the Eurozone. Sentix investor sentiment index came in at -15.8 in June from -22.6 in May versus -20.0 expected. The gauge recovered from its lowest level in two years, suggesting the regional companies were not so negatively impacted by rising consumer prices as previously expected.

All depends on Lagarde

Now, the market focus shifts towards the ECB meeting due on Thursday. The central bank is widely expected to leave rates on hold. The main question is whether the upcoming hike next month will be 25 of 50 basis points, as Lagarde seems to be leaving all options on the table. In case of a hawkish surprise (should the central bank open the door to a 50 bp rate hike in July), the euro would rally across the board.

Technically, EURUSD could easily get back to the area of the mentioned highs below the 1.0800 figure if the ECB delivers a bullish trigger for the common currency. In case of disappointment by a cautious tone from the monetary authorities, the euro would derail the ascending 20-DMA, today at 1.0620.

Now, bitcoin needs to sustain above this psychological level in order not to be caught in a prolonged range-bound consolidation phase that could deter potential buyers. Investors are now awaiting a more pronounced bullish signal from the market to reenter the game at the current or lower levels. The fact that the prices failed to sustain above $32,000 confirms that the bear market is still there, suggesting the coin could see fresh losses ahead before a reversal takes place.

Bulls target the $32,000 barrier

However, as cautiously bullish tone dominates the traditional financial markets on Friday, the downside potential in the crypto space looks limited for the time being. In this context, should BTC hold above $30,000 in the near term, a weekly close above $32,000 could be the key nearest barrier target to overcome. Anyway, the digital currency continues to signal recovery while above $30,000.

In a wider picture, bitcoin looks set to finish the week in positive territory for the first time in nine weeks, suggesting the recovery phase has finally started, with the RSI showcasing the upside momentum for BTC while MACD line is about to enter a positive crossover zone.

Still, downside risks continue to persist as well. Should risk aversion reemerges in the traditional stock markets, digital currencies will follow suit. On the downside, the immediate support is now represented by the 20-DMA, currently at $29,800, followed by this week’s low of $28,800. As such, failure to hold above $29,000 implies that deeper losses would lie ahead in the coming days or weeks.

when the descending channel was broken and a derivative was formed, the pound gradually began to rebound from the lows that were last seen in May 2020 and began to try to return to 1.29-1.32. Fixing above the middle of the channel and the 20-day moving average is a positive signal for bullish traders. The next technical milestone is 1.27-1.2725, where both the 50-day slide and resistance from September 2020 pass. If the pound fixes above this level, the road to $1.3 will open, but given the gradual transition to overbought, which may occur when the level of 1.27 is broken, this process may stretch until the end of June at best. But so far, the prospects for a reversal are quite good.

The first is the growing tension between China and Western countries due to the fact that Xi Jinping reacted negatively to sanctions against the Russian Federation and clouds are actively gathering around Taiwan as China increases the volume of troops conducting exercises around the island. The second is a zero-tolerance policy for coronavirus infections, which effectively shut down Shanghai for several weeks. These two factors devalued the yuan by 8% in three weeks. Given the fact that the Taiwan issue is gradually becoming a key one for Xi, since the elections in China will be held at the end of this year, and relations with Russia are only getting stronger amid the conflict with the West, as well as the “flag” figure on the daily chart that has actually been completed, by the end of summer, the yuan may return to the lows of May 2020, that is, to 7.1-7.2 per dollar.

And the week from May 23 to 27, which will be the first in 8 time periods to close in the green zone, is just a confirmation of this movement. The quarterly reports of corporate giants frankly did not impress, and the failed reports of retailers openly indicate that purchasing power in the United States is seriously declining, and reports for the second quarter of this year may be even worse, which can easily drop the index to the 3000-3200 range by the end of July. To stop the fall, the index needs to consolidate above 4000-4050 points, but the external background is too negative for this. Therefore, the coming weeks may update annual lows up to 3600 points.

This has been ongoing ever since the onset of the epidemic, and there are no signs that the yen will begin to regain its position. The problem with the Japanese currency being ultra-soft even compared to the European monetary policy, and the 2% inflation that is now settled in Japan is akin to a serious economic victory for the local authorities after several years of either zero inflation or deflation. Therefore, it is exceedingly unlikely that the yen would suddenly begin to strengthen sharply. The pennant on the weekly chart suggests that within a few weeks one can expect either a consolidation of prices in the range of 136-138 yen per euro and a subsequent exit to 150 in July-August, or this milestone will be taken at the end of June.

It has not been this sharp since November 2016, but even then the dollar only gained 11 yen. Now, for the period from March 9 to April 27, the yen has decreased in value against the dollar by 15 units, and this is definitely not the limit. Firstly, the rise in the FRS rate has a positive impact on the dollar rate, and given the current soft policy of the Central Bank of Japan, the growth of the American currency will continue further. Secondly, technically, a flag is clearly formed on the chart, and if the figure is completed, then by the end of June the yen will try to consolidate sideways at 125-130 units per dollar, and after that it will rewrite the lows, first from 2002, and then from 1998, by 135 and 145 to the dollar, respectively.

but after reaching the ratio of "1 to 1" in mid-May, it did not maintain its footing and began to fall sharply, albeit touching a three-year high at the same time. Prior to then, the pair had been trading sideways in the 0.91-0.93 range for about a year. Prior to that, for almost a year the pair moved sideways 0.91-0.93. Most likely, she will return there in the near future. Gradual tightening of the Fed's monetary policy and reduction of the balance sheet is already being put into the market, and a number of progressive states are beginning to revise the dollar's share in reserves, along the way paying attention to the sale of government bonds in China. This is extremely negative for the US economy and the dollar in the future, and the Swiss franc is again turning into a safe haven for traders. The nearest supports are 0.953, 0.948 and 0.936.

Following the Fed's hawkish rhetoric in April, the US currency began to rise sharply against almost all currencies, but recent comments by members of the board that the likelihood of one-time rate hikes of 0.75 percent is extremely low, as well as a gradual decline in inflation after the low base of the first five months of 2021, pushed the dollar back. This element, along with the rate increases from several Central Banks, is becoming increasingly important in the near future - the market is prepared for a rate hike in the United States.

Key supports for USDCAD are 1.258 and a range around 1.248-1.25. If it is passed, a strong bearish movement towards 1.23 and 1.2 will begin.

Earnings per share were $1.43, compared to $1.37 expected, while sales was $1.17 billion, compared to $1.148 billion expected. But, for the most part, this is the only good news for investors. The firm has already lost more than 40% of its valuation since the highs of August 25 last year, and the bearish trend on the NASDAQ index does not allow for a recovery. The share price has already reached the level where the paper met the pandemic, which is somewhat more above $200. However, the gap in the chart following the news, as well as the decrease in the US stock market overall, imply that after the excitement of the report, a "hangover" may occur in approximately two to three weeks. Autodesk is definitely going back to $190, but the biggest support point here is $175. After, it can fall to $ 140 per share.