Market Focus

U.S. stocks fell for a second day as rising virus cases around the world led to renewed concern over the continued economic impact, overshadowing a batch of solid corporate results.

The S&P 500 extended its slide from an all-time high, with investors showing caution ahead of the brunt of the earnings season. All eyes will be on whether an anticipated rise in profits will bring with its forecasts for stronger growth ahead. International Business Machines Corp. climbed after reporting its largest revenue growth in 11 quarters, while United Airlines Holdings Inc. paced a selloff in travel stocks on a bigger-than-expected loss. Netflix Inc. plunged in post-market trading as its first-quarter subscriber growth fell short of the average analyst estimate.

While American equities are trading at a valuation that’s about 35% above the average of the past decade, investors are focused on what’s forecast to be the best earnings season in two years. One of their biggest concerns is whether companies are equipped to handle mounting inflation pressures as the economic recovery gains momentum.

Elsewhere, the dollar rose for the first time in seven sessions, while the Treasury 10-year yield dropped to the lowest level in more than five weeks.

Main Pairs Movement

A gauge of the dollar snapped a six-day losing streak on Tuesday as commodity currencies slipped along with crude oil after a U.S. House committee cleared a bill that opens OPEC to Justice Department antitrust lawsuits.

USD/CAD rose as much as 0.6% to 1.2613, breaching its 55-DMA as it eyes the April 13 high of 1.2629; it was the pair’s biggest intraday gain in almost five weeks. Weakness in the loonie comes ahead of a Bank of Canada policy meeting Wednesday. The euro also slipped after a poll showed the German Green party taking a seven-point lead over Chancellor Angela Merkel’s conservative bloc.

AUD/USD fell by as much as 0.5% to 0.7719 after earlier climbing as much as 0.7% to 0.7816. Move may have been partly driven by profit-taking and put demand. Other than this, NZD/USD slid 0.2% to 0.7173 as commodity currencies backed down in U.S. trading, erasing an early advance of as much as 0.6%.

Technical Analysis

EURUSD (4 Hour Chart)

Eurodollar ebbed a little as it bulls move amid sterling correction that drives dollar to pick up, currently trading at 1.2036. At the current stage, the market still moves along within the upper side of 15-long SMA while 60-long SMA retains its ascending trend. Moreover, the RSI indicator shows a bullish signal as it is set at 61.3 figures. Integrity above perspective, we foresee the market will suppress by first resistance at 1.2106 level, therefore, remaining room for the north side. For the next checkpoint, we need to ensure the will market stands firmly above the 1.199 level where a neckline of the bottom pattern.

Resistance: 1.2071, 1.2106

Support: 1.199, 1.192, 1.1877

GPBUSD (4 Hour Chart)

Sterling wrong-foot correction in the daily market leads it loss 0.32%, trading at 1.3941, after yesterday coup movement which also induced a dollar index binge. It is seemingly impeded by psychological resistance at 1.4 level. On the other hand, the RSI indicator also cold down from torrid overbought territory while it slips to 62 figures, still suggesting bullish guidance at least for the short term. Fortunately, both 15 and 60-long SMAs indicators are still on the ascending path.

All in all, we expect the market will remain in the bullish movement for the long term but in the short run is more likelihood of a consolidation move. Therefore, the bull side should entrench the first support level on 1.39 which is also considered a neckline of the W pattern. In contrast, we see there lack of an effective upper boundary except for the 1.4 level which suffocated by two-month-long upside price cluster resistance.

Resistance: 1.4, 1.3959

Support: 1.39, 1.3822, 1.3796

XAUUSD (4 Hour Chart)

Gold inverted yesterday’s move that turns back on the bullish trajectory, trading at a day high of $1777.7. On the technical side, the RSI indicator trading at 60.7 figure which suggests a bullish momentum for the short term. In the meantime, 15 and 60-long SMAs indicators are both remaining upward trend. From a price-action perspective, after penetrated the 1759.7 level, gold seemingly situates solid prosperity. Therefore, we expect there still have a window for pick upside. On the upper side, we see a phycological figure at 1800 will be the first critical resistance. If retain movement further, next resistance eyes on 1812.8. On the lower side, 1759.7 still be the first barrier where is the shoulder of a double bottom.

Resistance: 1800.7, 1812.8

Support: 1759.7, 1754.5, 1722.75