GBP/USD is Diving, USD/CAD Could Start Steady Increase

GBP/USD failed to stay above 1.3800 and extended its decline. USD/CAD is showing positive signs, but it must clear 1.2570 for a decent increase in the near term.

Important Takeaways for GBP/USD and USD/CAD

• The British Pound started a fresh decline from well above the 1.3850 support zone.

• There is a key declining channel forming with resistance near 1.3715 on the hourly chart of GBP/USD.

• USD/CAD found support near the 1.2525 zone and it is now recovering higher.

• Earlier, there was a break below a key contracting triangle with support near 1.3565 on the hourly chart.

GBP/USD Technical Analysis

This past week, the British Pound failed to stay above the 1.3850 and 1.3800 support levels against the US Dollar. As a result, the GBP/USD pair started a fresh decline and it even broke the 1.3750 support zone.

There was a close below the 1.3750 level and the 50 hourly simple moving average. The pair declined below the 1.3700 level and it traded as low as 1.3670. Recently, there was an upside correction above 1.3700, but the pair struggled to clear the 1.3750 zone.

A high was formed near 1.3744 and the pair is now declining. It broke the 50% Fib retracement level of the upward move from the 1.3670 low to 1.3744 high.

There is also a key declining channel forming with resistance near 1.3715 on the hourly chart of GBP/USD. The pair is now trading near the 76.4% Fib retracement level of the upward move from the 1.3670 low to 1.3744 high.

It seems like the pair might continue to move down below the 1.3670 support zone. The next major support is near the 1.3620 level, below which the pair might test 1.3580.

On the upside, the 1.3720 zone is a major hurdle along with the 50 hourly simple moving average. A successful close above the 1.3720 and 1.3750 levels could open the doors for a decent increase in the coming sessions.

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EUR/USD Gains Traction, USD/JPY Is Extending Losses

EUR/USD started a decent increase after forming a base above the 1.1850 level. USD/JPY is declining and it broke the 109.00 support zone.

Important Takeaways for EUR/USD and USD/JPY

• The Euro is showing positive signs above the 1.1880 and 1.1900 levels.

• There was a break above a key declining channel with resistance near 1.1915 on the hourly chart of EUR/USD.

• USD/JPY started a fresh decline below the 109.20 and 109.00 support levels.

• There is a major bearish trend line forming with resistance near 109.50 on the hourly chart.

EUR/USD Technical Analysis

After a decent upward move, the Euro settled above the 1.1850 resistance zone against the US Dollar. Recently, the EUR/USD pair formed a support base above 1.1850 and started a fresh increase.

It broke a few important hurdles near the 1.1880 and 1.1900 levels. There was also a break above a key declining channel with resistance near 1.1915 on the hourly chart of EUR/USD. The pair gained pace above the 1.1940 level and settled above the 50 hourly simple moving average.

A high is formed near 1.1960 on FXOpen and the pair is now consolidating gains. An initial support on the downside is near the 1.1940 level.

The 23.6% Fib retracement level of the recent wave from the 1.1877 low to 1.1960 high is also near the 1.1940 level. The next major support on the downside is near the 1.1920 level (the recent breakout zone).

The 50% Fib retracement level of the recent wave from the 1.1877 low to 1.1960 high is also near the 1.1920 level. Any more losses might call for a test of the 1.1850 level. On the upside, the first major resistance is now forming near the 1.1960 levels.

A successful break above the 1.1960 resistance could open the doors for a push towards the 1.2000 resistance zone in the coming sessions.

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Gold Price and Oil Price Could Continue To Rise

Gold price started a fresh increase above the $1,740 resistance zone. Crude oil price is also rising and it is likely to continue higher above $63.50.

Important Takeaways for Gold and Oil

• Gold price gained pace after it broke the $1,720 and $1,740 resistance levels against the US Dollar.

• There was a break above a key bearish trend line with resistance near $1,745 on the hourly chart of gold.

• Crude oil price climbed higher nicely and it settled above the $62.00 support zone.

• There is a major bullish trend line forming with support near $62.45 on the hourly chart of XTI/USD.

Gold Price Technical Analysis

Earlier this week, gold price formed a decent support base above the $1,725 level against the US Dollar. As a result, there was a fresh increase above the $1,730 and $1,740 levels.

There was a break above a key bearish trend line with resistance near $1,745 on the hourly chart of gold. The price gained pace above the $1,750 level and it settled well above the 50 hourly simple moving average.

It even traded above the $1,765 level and a high is formed near $1,769 on FXOpen. The price is now correcting lower and trading below the $1,765 level.

It is testing the 23.6% Fib retracement level of the upward move from the $1,732 low to $1,769 high. An immediate support on the downside is near the $1,758 level. The next major support on the downside is near the $1,755 level.

Any more losses might call for a test of the $1,750 support. It is near the 50% Fib retracement level of the upward move from the $1,732 low to $1,769 high.

On the upside, the $1,768 and $1,770 levels are immediate hurdles. A clear break above $1,770 might open the doors for a steady increase towards the $1,780 level. The next key resistance is near the $1,800 level.

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Lumber Prices Go Ballistic as the U.S. Housing Market Booms

The U.S. housing sector is closely watched by investors from all over the world. It has strategic importance both for the United States GDP (Gross Domestic Product) and for the world’s economies.

People are too focused now on the COVID-19 pandemic to remember that the previous crisis, a financial one, started from the U.S. housing sector. In 2008-2009, the U.S. housing market bubble burst, a combination of derivative products used the wrong way, and so the market collapsed rapidly. The shockwave reached Europe and other developed economies, generating a financial crisis that haunted Europe for several years.

Fast forward to 2021, the world still struggles with the pandemic, but the housing market in the United States is in an unprecedented boom. This is very good news for the domestic economy and also for other economies. After all, when America’s economy outperforms, the positive spillovers influence other economies too.

Recovery Stronger Than Expected As Suggested by Strong Housing Sector Activity

The COVID-19 pandemic triggered changes in consumer behavior. People learned that online shopping (for some products) is as good as going out and buying the product. And, cheaper.

Therefore, the chances are that most of the changes seen during the pandemic are here to stay. One of the most interesting changes affected the workplace. Those who can work from home have built a home office, for example.

Also, people fled cities for outdoor spaces. Or, they stopped using common transportation favoring personal cars.

As such, contrary to all expectations, the COVID-19 recession was unique as both the auto and the housing sectors performed well. In particular, the housing sector has seen tremendous growth, as America literally faces a shortage of new houses.

And lumber to build them.

The price of lumber broke above $1,000 as there is no lumber enough to satisfy the demand. For those unfamiliar with the commodities market, lumber is a product of timberland and is usually harvested in periods of rising prices.

This is such a period. However, the demand from the U.S. housing market is so strong that the futures market still points to higher lumber prices. Commodities are typically traded on futures exchanges, where the clearinghouse brings together buyers and sellers and settles the prices on a daily basis.

When the spot price exceeds the futures price, it is said that the market is in backwardation. The entire lumber futures curve is in backwardation – a bullish sign suggesting more upside is possible for the price of lumber.

Therefore, investors should expect more upside for the U.S. housing market and, thus, for the U.S. economy. Are we about to witness one of the biggest economic recoveries in history?

FXOpen Blog

EUR/USD Gains Traction, USD/CHF Could Extend Losses

EUR/USD started a fresh increase above the 1.1950 and 1.2000 resistance levels. USD/CHF is declining and it could dive if it breaks the 0.9125 support.

Important Takeaways for EUR/USD and USD/CHF

• The Euro started a fresh increase after it settle above 1.1950 against the US Dollar.

• There is a key connecting bullish trend line forming with support near 1.2000 on the hourly chart of EUR/USD.

• USD/CHF is following a bearish path below the 0.9200 support zone.

• There is a major bearish trend line forming with resistance near 0.9170 on the hourly chart.

EUR/USD Technical Analysis

The Euro formed a strong support base above the 1.1950 level against the US Dollar. As a result, the EUR/USD pair started a fresh increase and it broke many hurdles near the 1.1980 and 1.2000 levels.

The pair even surged above the 1.2040 level and settled above the 50 hourly simple moving average. A high was formed near 1.2079 on FXOpen and the pair is now correcting gains. It traded below the 1.2060 and 1.2050 levels.

There was a break below the 23.6% Fib retracement level of the upward move from the 1.1942 swing low to 1.2079 high. However, the bulls are defending the 1.2030 support zone and the 50 hourly simple moving average.

The next major support is near the 1.2010 level. It is near the 50% Fib retracement level of the upward move from the 1.1942 swing low to 1.2079 high.

There is also a key connecting bullish trend line forming with support near 1.2000 on the hourly chart of EUR/USD. On the upside, the pair is facing hurdles near the 1.2050 level. The next major resistance is near the 1.2080 level, above which the pair could rise above the 1.2100 zone.

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AUD/USD and NZD/USD Could Extend Losses

AUD/USD failed to clear the 0.7800 resistance and corrected lower. NZD/USD is likely to extend losses if there is a clear break below the 0.7150 support.

Important Takeaways for AUD/USD and NZD/USD

• The Aussie Dollar failed to gain strength above the 0.7800 level against the US Dollar.

• There is a key bearish trend line forming with resistance near 0.7730 on the hourly chart of AUD/USD.

• NZD/USD corrected lower and it is now testing the 0.7150 support zone.

• There was a break below a major contracting triangle with support near 0.7180 on the hourly chart of NZD/USD.

AUD/USD Technical Analysis

After a steady increase, the Aussie Dollar struggled above the 0.7800 level against the US Dollar. The AUD/USD pair traded as high as 0.7815 on FXOpen and it recently started a fresh decline.

There was a break below the 0.7780 and 0.7750 support levels. The pair even settled below the 0.7750 level and the 50 hourly simple moving average. It traded as low as 0.7689 and it is now correcting losses.

It broke the 23.6% Fib retracement level of the downward move from the 0.7764 swing high to 0.7689 low. On the upside, there is a major resistance forming near the 0.7725 and 0.7730 levels. There is also a key bearish trend line forming with resistance near 0.7730 on the hourly chart of AUD/USD.

The trend line is close to the 50% Fib retracement level of the downward move from the 0.7764 swing high to 0.7689 low. The 50 hourly simple moving average is also near the trend line.

Therefore, a clear break above the trend line and 0.7730 is must for a steady increase. The next major resistance could be 0.7750, above which the price could rise towards the 0.7800 resistance.

Conversely, the pair could decline below the 0.7700 support zone. If there is a downside break below the 0.7700 and 0.7685 levels, the pair could extend its decline towards the 0.7650 level.

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GDP Growth Follows Success In Vaccination Efforts

The week ahead is marked by two important central banks delivering their monetary policy statements – the Bank of Japan and the Federal Reserve in the United States. While the two events are crucial for Japanese yen and U.S. dollar traders, the market is also interested in what the GDP data in the United States and Canada will reveal.

Since the COVID-19 pandemic hit the world, the GDP or Gross Domestic Product fell sharply in all countries. For the first time, the entire world was in an economic recession.

Last November, the world found out for the first time that vaccines have promising results. Since that moment, a race against the clock started, with the price being not only the defeat of the virus but also a quick economic recovery.

Chinese GDP Growth Signals Strong Bounce in Developed Economies Too

Unfortunately, there are not enough vaccines for everybody at this point, but the situation gets better by the day. The more time passes, the more vaccines will be delivered throughout the world, and the faster the economic recovery will be.

However, because of the inequalities in vaccine deliveries, some countries will experience economic growth faster and stronger than others. Hence, their currencies will likely benefit from it, as well as the stock market.

The Chinese GDP grew by over 18% in the first quarter of the year, when compared to the same quarter a year ago. The bounce was much stronger than expected, and the chances are that the U.S. economic growth will also exceed expectations.

Next Thursday, the advanced GDP in the United States is expected to show that the U.S. economy grew by 6.5% in the first quarter of the year. Judging by how the Chinese economy performed, the chances are that the U.S. economy will also beat expectations.

One day earlier, Jerome Powell will have a hard time explaining to market participants why the Fed is not preparing to taper its asset purchases. As the chart above shows, America is one of the nations that lead in the vaccination race, and so the economic recovery is much stronger – why the need for easing?

To sum up, the bigger the economic expansion, the more difficult for the Fed to keep its policy unchanged. The tapering may be closer than market participants expect.

FXOpen Blog

EUR/USD and EUR/JPY: Euro Remains Well Supported

EUR/USD started a fresh increase above the 1.2000 and 1.2050 resistance levels. EUR/JPY also gained momentum and it is now trading well above 130.00.

Important Takeaways for EUR/USD and EUR/JPY

• The Euro formed a base above 1.2000 and started a fresh increase above 1.2050.

• There is a key bullish trend line forming with support near 1.2075 on the hourly chart.

• EUR/JPY is also trading in a positive zone above the 131.00 zone.

• There is a major bullish trend line forming with support near 131.25 on the hourly chart.

EUR/USD Technical Analysis

There was a steady increase in the Euro started above the 1.1950 resistance against the US Dollar. The EUR/USD pair broke the 1.2000 and 1.2050 resistance levels to move into a positive zone.

There was also a break above the 1.2100 zone and the pair settled above the 50 hourly simple moving average. A high was formed at 1.2116 on FXOpen before there was a downside correction.

The pair traded as low as 1.2056 and it is now attempting a fresh increase. There was already a spike above the 50% Fib retracement level of the recent decline from the 1.2116 high to 1.2056 low. However, the pair is struggling to settle above the 1.2085 zone and the 50 hourly simple moving average.

The next major resistance is near the 1.2095 level. It is near the 61.8% Fib retracement level of the recent decline from the 1.2116 high to 1.2056 low.

Any more gains could set the pace for a fresh high above the 1.2116 level in the near term. The next key resistance could be near the 1.2140 level. On the downside, there is a key bullish trend line forming with support near 1.2075 on the hourly chart.

If there is a downside break, EUR/USD might continue to move down towards the 1.2050 support. Any more losses could open the doors for a test of the 1.2000 support zone in the near term.

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Gold Price Remains At Risk, Oil Price Extends Rally

Gold price failed to clear the $1,800 resistance zone and started a fresh decline. Crude oil price is rising and it is showing a lot of positive signs above $64.50.

Important Takeaways for Gold and Oil

• Gold price failed to clear the $1,790 and $1,800 resistance levels against the US Dollar.

• There is a key bearish trend line forming with resistance near $1,788 on the hourly chart of gold.

• Crude oil price climbed higher nicely and it even broke the $65.00 resistance zone.

• There is a crucial bullish trend line forming with support near $64.30 on the hourly chart of XTI/USD.

Gold Price Technical Analysis

Earlier this week, gold price climbed higher above the $1,780 resistance against the US Dollar. However, it failed to clear the $1,790 and $1,800 resistance levels.

A high was formed near $1,789 on FXOpen before the price started a fresh decline. There was a break below the $1,780 and $1,765 support levels. The price even settled below the $1,780 level and the 50 hourly simple moving average.

A low was formed near $1,756 before the price recovered. It climbed above the $1,765 level. There was a break above the 23.6% Fib retracement level of the recent decline from the $1,789 high to $1,756 low.

However, the price failed to clear the $1,780 resistance and the 50 hourly simple moving average. It also struggled near the 50% Fib retracement level of the recent decline from the $1,789 high to $1,756 low.

Moreover, there is a key bearish trend line forming with resistance near $1,788 on the hourly chart of gold. The price must clear the $1,780 resistance and the trend line to start a strong increase in the coming sessions.

If not, there is a risk of another decline below the $1,760 level. The first key support is near the $1,755 and $1,750 levels. Any more losses might call for a test of the $1,720 support.

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Weak Dollar Despite Strong U.S. Economic Performance

The U.S. economy grew at 6.4% in the first quarter of the year, and it is in line to exceed the pre-pandemic growth level. The good news goes even further, as the growth in the first quarter exceeds the previous quarter’s growth of 4.3%.

However, the U.S. dollar did not rise on the news. In fact, for the entire month of April, the dollar traded with an offered tone. For instance, with the exception of the last trading day of the month, the EURUSD moved only higher, from 1.17 to over 1.21 in less than thirty days.

Fed Keeps the Accommodative Measures

One day before the GDP release, the Federal Reserve of the United States (Fed) announced that it keeps the monetary policy accommodative despite the remarkable economic performance. As such, the Fed continues to buy $120 billion worth of assets every month, putting pressure on the dollar.

The households’ savings rate at the end of the first quarter was 21%, up from 13% in the last quarter of 2021. The uncertainty generated by the pandemic continues, as households keep stashing funds and postpone consumption.

However, the more people get a vaccine, the faster the U.S. economy will come back to normality. As such, the savings rate is expected to decline in the second quarter of the year, pushing the GDP even higher.

It all comes down to the stimulus checks received by households. As the chart above shows, the stimulus checks played an important role during the pandemic, but yet the U.S. consumer is not spending it entirely, as suggested by the high savings rate.

Moving forward, the trading month starts strongly with the Non-Farm Payrolls release scheduled next Friday. The market expects 975k new jobs to have been created in April and that the Unemployment Rate will decline to 5.7% from the previous 6%. However, the risk is that the data will be much better than expected, as suggested by the steady economic growth seen in the first quarter.

As for the dollar, at one point, it should start reflecting the economic reality. Moreover, if the NFP exceeds expectations, the Fed will have a hard time keeping its current monetary policy stance and will be forced to announce the tapering of its asset purchases sooner than expected.

FXOpen Blog

EUR/USD is Facing Hurdles, USD/JPY Remains Elevated

EUR/USD failed to stay above the 1.2100 zone and corrected lower. USD/JPY is trading in a positive zone above 109.00 and it is now approaching a major breakout.

Important Takeaways for EUR/USD and USD/JPY

• The Euro started a fresh decline from well above the 1.2100 pivot level.

• There is a key bearish trend line forming with resistance near 1.2040 on the hourly chart of EUR/USD.

• USD/JPY started a decent increase above the 108.50 and 109.00 resistance levels.

• There is a major breakout pattern forming with resistance near 109.38 on the hourly chart.

EUR/USD Technical Analysis

After a spike above the 1.2125 level, the Euro faced a fresh round of selling against the US Dollar. As a result, the EUR/USD pair started a fresh decline below the 1.2100 pivot level.

The pair broke a few key supports near 1.2080 and 1.2050. It even spiked below the 1.2000 level and settled well below the 50 hourly simple moving average. A low is formed near 1.1999 on FXOpen and the pair is correcting higher.

There was a break above the 23.6% Fib retracement level of the recent decline from the 1.2075 high to 1.1999 low. The first major resistance on the upside is near the 1.2035 level.

There is also a key bearish trend line forming with resistance near 1.2040 on the hourly chart of EUR/USD. The trend line is close to the 50% Fib retracement level of the recent decline from the 1.2075 high to 1.1999 low.

The 50 hourly simple moving average is also near the 1.2035 zone to act as a hurdle. If there is an upside break above the 50 hourly simple moving average and the trend line, the pair could rise further towards the 1.2100 pivot level.

If not, there is a risk of more downsides below 1.2010. The main support is near 1.2000. A close below 1.2000 could open the doors for a move towards the 1.1920 support.

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Gold Price Rallies Above $1,800, Oil Price Prepares For Next Move

Gold price started a fresh increase and it cleared the $1,800 resistance zone. Crude oil price is trading nicely above $64.50 and it is likely setting up for the next move.

Important Takeaways for Gold and Oil

• Gold price gained pace above the $1,790 and $1,800 resistance levels against the US Dollar.

• There is a key bullish trend line forming with support near $1,805 on the hourly chart of gold.

• Crude oil price climbed higher and tested the $66.65 zone before correcting lower.

• There is a crucial contracting triangle forming with support near $64.70 on the hourly chart of XTI/USD.

Gold Price Technical Analysis

This week, gold price formed a strong support base above the $1,760 level against the US Dollar. As a result, there was a fresh increase above the $1,780 and $1,800 resistance levels.

The price even settled above the $1,800 zone and the 50 hourly simple moving average. It spiked above the $1,815 level and a high was formed near $1,818 on FXOpen. The price is now consolidating near the $1,815 level.

An initial support on the downside is near the $1,805 zone. There is also a key bullish trend line forming with support near $1,805 on the hourly chart of gold.

The trend line is close to the 23.6% Fib retracement level of the recent wave from the $1,770 low to $1,818 high. If there are more losses, the price could decline towards the $1,800 level. The next key support could be near the $1,795 level.

The 50% Fib retracement level of the recent wave from the $1,770 low to $1,818 high is also near the $1,795 zone. Besides, the 50 hourly simple moving average is near the $1,792 level.

On the upside, an immediate resistance is near the $1,818 and $1,820 levels. A clear break above the $1,820 level may possibly open the doors for a move towards the $1,850 level.

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