Market Focus

U.S. stocks rose to a record as investors digested the latest batch of corporate earnings and data that showed the American economy gained steam in the first three months of the year.

Amazon.com climbed after hours on a better-than-estimated revenue forecast, while Twitter sank amid a lackluster outlook. In regular trading, Apple wiped out its gains on concern that the iPhone maker may not sustain growth after a blockbuster quarter as it faces a tightening supply of chips.

The tech-heavy Nasdaq 100 broke a two-day losing streak. The volatility came as investors continued to assess major corporate results that overshadowed signs of a resurgence in the economy. Data released Thursday showed U.S. gross domestic product expanded at a 6.4% annualized rate in the first quarter, while applications for U.S. state unemployment insurance fell last week to a fresh pandemic low.

While the GDP figures may support the Federal Reserve’s strong assessment of the economy, the central bank is in no mood to halt aggressive support as it looks for even further progress in employment and inflation. Chair Jerome Powell on Wednesday dismissed worries about price surges or anecdotes of labor shortage, implying policymakers are prepared to run the economy hot for a while. President Joe Biden unveiled a $1.8 trillion spending plan targeted at American families, adding to the economic optimism.

With their plans, the Fed and Biden have delivered a boost to investor sentiment that has seen-sawed in recent days between optimism over a string of robust economic data and caution amid high valuations and speculation about stimulus tapering by year-end.

Main Pairs Movement

The dollar topped most Group-of-10 currency peers as 10-year Treasury yields rose to the highest in two weeks amid mounting inflation expectations and data showing U.S. economic growth is accelerating. The Canadian dollar outperformed as oil climbed and copper neared an all-time high.

Treasury 10-year yield up 3bps at 1.64%, paring a gain of as much as 8bps, as TIPS break evens touched the highest since 2013. Among G-10 peers, the greenback outperformed most except for the loonie and pound; the Swedish krona and Australian dollar lagged the pack.

USD/JPY climbed 0.3% to 108.94; rose as much as 0.6% to 109.22, highest since April 13. EUR/USD -0.1% to 1.2119 after earlier hitting the highest since February; options suggest further spot gains may come at a slower pace.

GBP/USD rose 0.1% to 1.3944, after earlier rising to the highest in over a week as UK PM facing a political risk. USD/CAD dropped 0.3% to 1.2283, earlier fell to 1.2281, lowest since February 2018; leads G-10 gains as WTI oil rises for the third day.

Technical Analysis

EURUSD (4 hour Chart)

Eurodollar retains monthly gains after reached top 1.2149 but stifle by 1.213 level while outer performance U.S. data failed to push the greenback forward, trading at 1.213 as of writing. For the RSI side, the indicator shows 60.3 figures, suggesting room for bullish momentum at least for the short term. On moving average price, 15 and 60-long SMA indicators remain an ascending movement.

Overall, we expect there still have an upper-space as market sentiment remains a benign bullish momentum. Again, we need to eyes on the eurodollar whether could emphatically stand above the 1.2106 level.

Resistance: 1.213, 1.22

Support: 1.2106, 1.199, 1.192

USDJPY (4 Hour Chart)

Japan yen retreat yesterday weakness from Fed’s impact that once hit all-day high 109.22 then slightly fell to 108.9 when market close. For the RSI side, the indicator has reached up to 61 figures, suggesting an optimistic sentiment for the bull movement. Moreover, 15-long SMAs have a golden cross 60-long one although 60-long SMA remains a smooth movement.

In the lights of day move, we foresee the market is establishing an upward momentum as price action and market sentiment. To maintain bull move, the neckline of the “V” pattern should be the immediately defend level, 107.937 following. On the up way, if the yen could penetrate day high level, place at 109.22, it could spur more buy-side demand.

Resistance: 108.93, 109.22, 110.412

Support: 108.37, 107.936

USDCAD (4 Hour Chart)

After breakthrough support at 1.238 level, loonie continues its downward momentum to nearly three years fresh low that trading at 1.228 as of writing. For the moving average side, 15 and 60-long SMAs remaining a descending trend. For the RSI side, the indicator has slipped into the over sought territory at 22 figure, suggesting an over pessimistic sentiment at the moment.

Continue our recent perspective, we still expect the loonie will have immense space for a downward trend as it penetrated 2 years neckline. However, consecutive 2 days over the sought sentiment of RSI indictor which we consider will have a mean reverse in imminent days. Otherwise, we do not see any support level on the lower bound in a long-term view.

Resistance: 1.238, 1.246, 1.2491