Market Focus

U.S. technology stocks fell as investors turned their attention to a batch of earnings from industry heavyweights that have helped drive the market to all-time highs.

The Nasdaq 100 dropped for the first time in three sessions, weighed down by declines in tech heavyweights including Tesla Inc. and Alphabet Inc. The S&P 500 closed little changed after swinging between gains and losses throughout the day. United Parcel Service Inc. soared to a record after beating Wall Street’s profit estimates.

Tesla ended a two-day streak of gains after its results failed to impress investors. 3M Co. was the biggest drag on the Dow Jones Industrial Average after it warned that higher costs for raw materials and transportation are a worsening threat. Google parent Alphabet climbed more than 4% post-market, erasing its cash-session decline after profit and revenue exceeded Wall Street’s expectations. Microsoft Corp. reversed again and dropped 3.5% after reporting revenue that missed the highest analysts’ estimates.

While the earnings season has been generally strong so far, investors may be waiting for more robust beats to fan the next move higher. Four out of five S&P 500 companies that have released results have either met or beaten expectations. On average, shares have gained less than 0.1% after the reports, according to data compiled by Bloomberg.

Meanwhile, U.S. data this week are expected to show growth accelerated to an annualized 6.8% in the first quarter. A Conference Board measure Tuesday showed consumer confidence reached the highest since February 2020 as Americans grew more upbeat about the economy and job market.

Main Pairs Movement

The dollar advanced while U.S. 10-year yields touched the highest level in a week as Federal Reserve policymakers began a two-day meeting with a decision Wednesday that may provide insight into their views on tapering asset purchases. The Canadian dollar slipped from the highest level in five weeks as traders await comments Tuesday from the central bank governor.

Among Group-of-10 peers, the Norwegian krone and pound led gains; the Australian and New Zealand dollars were among the laggards. The U.S. 10-year Treasury yield climbed as much as 5.9bps to 1.63%.

The divergence in sentiment for the euro as shown by its volatility skew has reached levels seen only a handful of times in data going back to 2006. The spread between one-year and nine-month risk reversals is trading around 40 basis points in favor of the longer-term puts.

Technical Analysis

EURUSD (4 hour Chart)

EURUSD consecutive two days slightly move in the day market which girds in a tiny horizontal channel, trading at 1.2088 as of writing. Eurodollar bounced back but under 1.21 from an intraday low of 1.2060 while investors awaiting the ECB chairman speaking, the FOMC statement, and the Fed interest rate decision. For the RSI side, an indicator shows 58 which suggests an upward momentum ahead of. On average price aspect, 15 and 60-long SMAs are retaining an ascending trend.

In the light of the aforementioned suggestion, we still expect the market to maintain bull movement at the current stage. It is one thing worth noting that there has a solid threshold at 1.21. In addition, the market could face tumultuous as the central bank governor speaking and any decision.

Resistance: 1.2106

Support: 1.2071, 1.199, 1.192

USDJPY (4 Hour Chart)

Japan yen hovered to close the day in the positive territory, trading at 108.756 level as of writing, whilst the greenback clings in tiny daily gains. In the morning session, the BoJ governor said that the central bank can achieve a 2% inflation target by continuing powerful money easing as at its post-monetary policy meeting that drives devaluation expectation rising. For the RSI side, the indicator is locating at 66 figures, suggesting a bull move in the short run. On the other hand, the yen jumped significantly which drove the 15-long SMA indicator to turn upward way and 60-long remaining a slight move.

At the current stage, yen stands above the month-long neckline at 108.37 level as recovery from days ago low. Therefore, we believe the market has potential upward indication. However, we see the market momentum was pick up too rapidly in the short term that probably will induce some take-profit trade from a long position.

Resistance: 108.93, 109.22

Support: 108.37, 107.936

USDCAD (4 Hour Chart)

Loonie fails to continue its downward momentum as it struggles nearby critical support and the pan-commodities market was lacks any direction, modest recovery above the 1.24 mark. For RSI side, indicator record 34 figure which suggests a downward sentiment in the short term. On the moving average side, both SMA indicators are retaining downside movement.

Integrity all spots, we consist our yesterday view that loonie could cling at the current stage, at 1.238 level, to waiting for another strong bearish signal like greenback devaluation or loose statement from the central bank. Moreover, pan-commodities price rising will appreciate for loonie as well.

Resistance: 1.246, 1.2491, 1.2587

Support: 1.238