USD/JPY: rising incidence of COVID-19 in Japan hurts the yen

Current trend

The USD/JPY pair actively strengthens, trading at the level of 110.65.

The weakening of the yen is due to the epidemiological situation. According to the Japanese Ministry of Health, the number of people infected with new strains of coronavirus is growing rapidly, and carriers of the British and African strains are already present in 34 out of 47 prefectures. Also, the first cases of detection of the Brazilian strain are reported. The government has not yet taken any steps regarding the new quarantine, as the country is undergoing pre-Olympic events that, if introduced, would be in jeopardy.

The US currency is holding at Friday's close levels, with little reaction to the news that the production of the AstraZeneca vaccine at the Baltimore plant has stopped. It was stopped by a personal decree of US President Joe Biden after 15M doses of the vaccine were spoiled at the plant due to a technological error in the manufacturing process. Earlier, the chief infectious disease specialist Anthony Fauci has already stated that the United States did not need a vaccine from this manufacturer, and soon its use might stop at all.

Support and resistance

The instrument moves within an uptrend and may rise again after a short-term correction. Technical indicators maintain a global buy signal. Alligator indicator’s EMA fluctuations range is quite wide, and the histogram of the AO oscillator moves in the positive zone.

Resistance levels: 110.90.
Support levels: 110.30, 109.30.

JP Morgan Chase Co.: wave analysis

The price may grow.

On the daily chart, the fifth wave of the higher level (5) forms, within which the wave 3 of (5) develops. Now, the third wave of the lower level iii of 3 has formed, and a local correction is ending to develop as the fourth wave iv of 3. If the assumption is correct, after the end of the correction, the price will grow to the levels of 165.00–170.00. In this scenario, critical stop loss level is 145.53.

XAU/USD: wave analysis

The pair may grow.

On the daily chart, the third wave of the higher level (3) formed, and a downward correction developed as the fourth wave (4). Now, the formation of the fifth wave (5) has started, within which the first wave of the lower level 1 of (5) is developing. If the assumption is correct, the pair will grow to the levels of 1877.85–1959.38. In this scenario, critical stop loss level is 1676.66.

USD/CAD: "bullish" trend development

Current trend

USD is showing moderate growth against CAD, developing a "bullish" signal, formed the day before, when the instrument retreated from its local lows.

Moderate support for USD is provided by the continuing growth in the yield of US Treasury bonds, coupled with the general positive sentiment of investors regarding the prospects for the recovery of the American economy. Only statistics on inflation distorts the overall picture.

In turn, CAD is still supported by a strong report on the Canadian labor market for March published last Friday and reflecting a sharp decline in the unemployment rate in the country from 8.2% to 7.5%, which turned out to be significantly better than market expectations of 8%. The employment change in Canada in March also rose sharply by 303.1K, outstripping the growth rate of the previous month at the level of 259.2K. Market forecasts assumed an increase of only 100K.

Support and resistance

In the D1 chart, Bollinger Bands are reversing horizontally. The price range does not change, outlining the approximate boundaries of the short-term flat. MACD indicator is growing, maintaining a weak buy signal (the histogram is above the signal line). Stochastic, after a short decline at the end of last week, is trying to reverse upwards, reflecting the growing buying activity in the ultra- short term.

The development of uptrend is possible in the near future.

Resistance levels: 1.2600, 1.2650, 1.2700.
Support levels: 1.2554, 1.2500, 1.2439, 1.2400.

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EUR/USD: vaccination in the EU is again in jeopardy

Current trend

EUR is strengthening against USD, trading at 1.1974, but the positive dynamics is mainly facilitated by weak USD.

Vaccination problems continue in the EU. Following the AstraZeneca Plc., whose supply of the drug was disrupted, and some countries in the eurozone completely limited its use, it became known that the use of the Janssen vaccine from Johnson & Johnson Co. was also temporarily suspended because of the recently identified danger of thrombosis development. The European Medicines Agency is currently conducting analysis of the submitted samples, but there is no official conclusion yet, so a large batch of Janssen was sent to warehouses.

USD continues to decline. The Chair of the US Fed, Jerome Powell, said yesterday that the regulator is considering the possibility of reducing the volume of purchases of government bonds, which is now USD 120B per month, and this will not be related to the course of monetary policy. In other words, the department will reduce purchases of bonds, but at the same time the key interest rate will remain unchanged. Investors were disappointed with this announcement, as the previous rise in USD was associated with hopes for a rate hike.

Support and resistance

On the global chart of the asset, the price continues trading within a wide descending channel. Technical indicators reversed and issued a buy signal. The fast Alligator indicator EMAs crossed the signal line from below, and the histogram of the AO oscillator moved to the purchase area.

Resistance levels: 1.2035, 1.2325.
Support levels: 1.1899, 1.1710.

USD/JPY: USD demonstrates downtrend

Current trend

USD is declining against JPY this morning session, developing a fairly strong "bearish" trend in the short term and renewing local lows since March 24. USD expects the emergence of new drivers in the market, but for now it remains under the pressure of the declining yields of Treasury bonds.

In turn, JPY is getting some support after the release of macroeconomic statistics from Japan on Monday. Japanese Exports went up by 16.1% YoY in March after the decline by 4.5% YoY in the previous month. Analysts had expected growth by 11.6% YoY only. Imports for the same period rose by 5.7% YoY, which turned out to be better than projected by 1.0%, but noticeably weaker than the dynamics of the previous month at the level of 11.8% YoY. Merchandise Trade Balance Total in March increased from JPY 215.9B to JPY 663.7B. Analysts predicted trade balance at JPY 490B.

Support and resistance

Bollinger Bands in D1 chart demonstrate active decrease. The price range narrows slightly from above, but still remains spacious enough for the current level of market activity. MACD is going down preserving a stable sell signal (located below the signal line). The indicator is about to test the zero level for a breakdown. Stochastic, having reached the zero level, reversed into a horizontal plane, signaling the risks of oversold USD in the ultra-short term.

Resistance levels: 109.00, 109.37, 109.84, 110.23.
Support levels: 108.54, 108.15, 107.78, 107.42.

Brent Crude Oil: the instrument develops "bearish" momentum

Current trend

Brent crude oil prices are showing a slight decline, developing the "bearish" momentum formed the day before and preparing to test 66.00 for a breakdown. The instrument's positions are under pressure from the alarming situation with the incidence of coronavirus in Asia, while interruptions in the supply of Libyan oil somewhat counterbalance the situation.

The report of the American Petroleum Institute (API) on oil reserves released yesterday did not have a noticeable effect on the dynamics of the instrument. For the week ending April 16, published data showed a slight increase by 0.436M barrels after a decline of 3.608M barrels in the previous period.

Today, investors are waiting for the statistics on crude oil stocks from the US EIA. Forecasts assume a further 2.86M barrels decline after a 5.889M barrels decline in the previous period.

Support and resistance

Bollinger Bands in D1 chart show weak growth. The price range is slightly expanded from above, remaining spacious enough for the current activity level in the market. MACD reversed downwards having formed a weak sell signal (located below the signal line). Stochastic is showing similar dynamics, retreating from its highs, indicating the overbought instrument in the ultra-short term.

Current indicators do not contradict the further development of the "bearish" trend in the ultra-short term.

Resistance levels: 67.00, 68.00, 69.00, 70.00.
Support levels: 66.00, 65.00, 64.00, 63.00.

GBP/USD: the instrument shows uncertain growth

Current trend

GBP demonstrates weak growth in trading this morning session, recovering from the active decline the day before, which was caused by the emergence of positive macroeconomic statistics from the US, as well as the continuing long-term profit-taking by investors.

Markets were positively greeted by data on a decrease in the number of initial jobless claims for the week ending April 16 from 586K to 547K, which turned out to be much better than the negative forecast of growth to 617K. The number of continuing jobless claims fell from 3.708M to 3.674M, but the market was counting on a slightly larger decline to 3.667M.

Today, GBP is in anticipation of the publication of statistics on the UK Markit PMIs in the manufacturing and services sector for April.

Support and resistance

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD reversed downwards having formed a weak sell signal (located below the signal line). Stochastic shows a somewhat more confident decline, signaling the prospects for a downtrend in the nearest future.

Existing short positions should be kept until technical indicators are clarified.

Resistance levels: 1.3900, 1.3960, 1.4000.
Support levels: 1.3822, 1.3800, 1.3750, 1.3700.

Nvidia Corp.: wave analysis

The price may grow.

On the daily chart, the upward third wave of the higher level (3) develops, within which the wave 3 of (3) formed. Now, a local correction has developed as the fourth wave 4 of (3), and the formation of the wave 5 of (3) has started, within which the first wave of the lower level i of 5 is developing. If the assumption is correct, the price will grow to the levels of 700.00–750.00. In this scenario, critical stop loss level is 547.76.

Alibaba Group Holdings Ltd.: wave analysis

The price may grow.

On the daily chart, the upward fifth wave of the higher level (5) develops, within which a downward correction ended as the fourth wave 4 of (5). Now, the development of the fifth wave of the lower level 5 of (5) has started, within which the wave i of 5 has formed, a local correction has developed as the wave ii of 5, and the formation of the wave iii of 5 has started. If the assumption is correct, the price will grow to the levels of 299.84–318.84. In this scenario, critical stop loss level is 220.97.

Bank of America Corp.: wave analysis

The price may grow.

On the daily chart, the third wave of the higher level (3) forms, within which the wave 3 of (3) developed. Now, a local correction has formed as the fourth wave 4 of (3), and the development of the wave 5 of (3) has started. If the assumption is correct, the price will grow to the levels of 44.50–47.00. In this scenario, critical stop loss level is 37.66.

WTI Crude Oil: a sharp drop in crude stocks supported prices

Current trend

The price of North American light oil, WTI Crude Oil, moves within a corrective uptrend, trading at the level of 65.73.

The quotes received significant support after the American Petroleum Institute (API) and the Energy Information Administration (EIA) published their reports on reserves this week. According to API data, inventories in storage facilities decreased by 7.688M barrels, which is significantly higher than the expected decrease by 2.191M. A day later, the EIA reported a drop in inventories of American firms by 7.990M barrels, which is significantly higher than the expected 2.346M. for a week, could not but provoke the growth of the instrument. The upward dynamics may continue until the end of the week.

Support and resistance

On the local chart, the price continues its corrective growth, trading above the key level of $65. Technical indicators are in the state of a buy signal, completing a local correction: the fluctuation range of the Alligator EMA is ready for a new extension, and the AO oscillator histogram is in the buy zone, although it is still forming downwards bars.

Resistance levels: 66.50, 68.70.

Support levels: 65.00, 63.00.