Português
Español
Français
русский
Market Wrap
The few bits of Tier 1 data out today have given the market some bullish risk-on moves.
Firstly, the European Central Bank decided to keep the PEPP asset purchases going according to market conditions, as previous increased purchases had given the euro area economy a level of stability. More concerning to them is the appreciation of the single currency against the US dollar, as this makes exports more expensive. Before making any adjustments the ECB will wait until June as the base effects in inflationary pressures should be worked out of the system. As per the USA, there is considerable slack within the labour force in Europe, with disruptions still ongoing through supply chains and COVID-19.
See real-time quotes provided by our partner.
The EURUSD has clearly moved away from the Breakout – retest levels around 1.2065, having found support at the previous market structure yesterday.
See real-time quotes provided by our partner.
Today’s news has given the euro the edge of the greenback, which is still keeping its head above the $90, though with every lower swing high, the probabilities are that the DXY goes lower next week.
See real-time quotes provided by our partner.
This morning’s analysis of the EURJPY has worked out as predicted, with the euro appreciating against the Japanese yen.
The ActivTrader sentiment indicator is showing more traders getting short adding fuel to the rise. Trying to pick a top in this market is turning out to be a foolish endeavour. The yen is depreciating against the Australian dollar with the USDJPY rotating around its opening price for the day.
Today’s US Retail Sales came in flat and under market expectations. Total sales for the three-month period from February through April increased by 27.1%, with a lot of the increase due to the US economy starting to open up and because the stimulus cheques had hit the bank accounts by then. If there are no more stimulus cheques on their way, the retail figures could turn for the worse again in the coming months. US Consumer Sentiment for may fell 6.2% compared to the previous month. The sentiment report noted that “Consumer confidence in early May tumbled due to higher inflation – the highest expected year-ahead inflation rate as well as the highest long term inflation rate in the past decade”.
These consumers led reports weighed on the US 10 Year yields, which was to the benefit of the Nasdaq, as big tech rallied higher. Apple and Microsoft were up around 2% on the day at the London close. The S&P500 and DJIA were also able to add to gains from yesterday rising more than a percentage point each.
See real-time quotes provided by our partner.
The Nasdaq fell to the 61.8% retracement yesterday and with today’s move higher it is quite safe to assume that the technical traders are in control and that the buy the dip strategy worked. If the Nasdaq could get back to the daily 50 ema and close above, we could see any side-lined investor jump in long too.
The weekly American Association of Individual Investors (AAII) sentiment report shows that as most American investors are either on the side-lines or short currently. With 36.5% believing in the relief rally’s continuation.
