Market Focus

U.S. stocks rose and Treasury yields declined for a second consecutive day as more-tempered commodity prices helped allay concerns about inflation risks.

Energy and technology shares led the S&P 500, which tumbled Wednesday by the most since February. The tech-heavy Nasdaq 100 outperformed the broader index, suggesting a market recovery is gaining momentum, after a bruising week that saw gathering price pressures hit equities. Both indexes still finished the week in the red. An advance in European stocks was led by cyclical industries. MSCI Inc.’s Asia-Pacific share gauge advanced more than 1%.

Markets appear to be regaining their equilibrium at the end of their biggest retreat in 11 weeks, with the focus on the benefits of an economic rebound overriding worry about the negative side-effect of inflation, for now.

That may help to reinvigorate the reflation narrative of picking value shares tied to economic growth over pandemic stay-at-home favorites. Walt Disney Co. fell after results that showed a faltering in growth at streaming service Disney+.

Main Pairs Movement

The dollar slid against all of its Group-of-10 currency peers as yields fell and data showed retail sales stalled, while consumer sentiment deteriorated unexpectedly as Americans grew increasingly concerned about inflation. Losses in the dollar index may come with mid-month rebalancing.

The Federal Reserve’s policy is in a good place right now, said Cleveland Fed President Loretta Mester, while playing down signals from data that she warns will be volatile as the economy reopens.

Treasuries gained after a report showed U.S. retail sales stalled in April following a sharp advance in the prior month. The dollar remained weaker against all of its Group of 10 peers.

NOK/USD dropped as much as 1.5%, most since November. AUD/USD rose 0.7% to 0.7785 amid rising gold and oil prices and gamma-related activity. USD/CAD fell as much as 0.7%, the most since May 6, to 1.2081. The report showed Canadian wholesale trade rose 2.8% in March, beating estimates of a 1% advance.

Technical Analysis

EURUSD (4 hour Chart)

Euro fiber is heading thereto daily high above 1.21 after the U.S. reported no change in April’s retail sales which is below 1% expected, trading at 1.2143 with 0.54% gains as of writing. In ECB monetary statement, a phrase from the latest meeting noted the Governing Council did not discuss any tapering of the bond purchase program. A positive assessment, however, came after members acknowledged that risks to the activity are now slightly tilted to the upside. For the technical aspect, the RSI indicator shows 61 figures, which suggests a bullish momentum sentiment. On average price view, 15-long SMA indicator is ongoing flat move-in day market and 60-long SMA turned slightly upside slope.

According to price action, the euro seems to be poised to testing the 1.2151 level as a small-scale neckline of the last perch point like the yellow range. As price momentum seems ongoing with gain traction, we expect the market could penetrate 1.2151 level to the next higher level. Therefore, for slideway, we stay tune in 1.2106 level which we deemed a first immediate support then 1.207 follow.

Resistance: 1.2151, 1.22

Support: 1.2106, 1.207

GBPUSD (4 Hour Chart)

The pound traded has teeny-tiny gains in the day market while is trading close to 1.41 level where settle at 1.40956 as of writing. Of course, day hovers benefitting from the better market mood as the global share market rejuvenated from the recently bleak side that seems to the re-trigger risk-on mode in subtle. For the RSI side, the indicator shows 59 figures, suggesting a bullish momentum for a short run. On the other hand, the 15-long SMA indicator retains the south side trend after yesterday’s hard land in the day, and the 60-long SMA indicator remaining a teeny-tiny ascending movement.

Overall the market move-in day, pound once poised to testing 1.41 level but tun it head after fail to occupy the spot. In light of recent perspective, we still foresee 1.4 level would be and have to be the strong support for bullish favor despite faltering movement. As move averaging manifest mixed way and comprehend before views, we expect market will high probability that stymie in a range between first resistance and support. For longer intervals, we foresee sterling could challenge the 1.4155 level if the market got fueled by buy-in demand.

Resistance: 1.4155, 1.42

Support: 1.3959, 1.4

XAUUSD (4 Hour Chart)

Gold has rallied up to closer to the multi-month perch since February which has an edge over in inflation period in terms of market consensus, trading at 1843.43 as of writing. Meantime, the ongoing downfall in the U.S. Treasuries’ bond yield failed to assist the greenback to monetize on this week’s positive move which was inspired by the torrid U.S. CPI report. For the RSI side, the indicator continues to rally to a higher stage, shows a 64.46 figure which suggests a bull movement. For moving average side, 15-long SMA indicator turns its slope to upside trend and 60-long SMAs indicator retaining its north side momentum.

For the current stage, we expect gold will toward to 1850 level to testing a bullish momentum and psychological resistance level. On the down way, the most likely vital support could be 1800, and short-run support level could be 1812.8 around as substantial price located in.

Resistance: 1850

Support: 1812.88, 1800, 1763.837