Português
Español
Français
русский
Market Brief
The markets are very quiet as we come to the end of the month. If ever there was a chance to sit on your hand s or do something else rather than look at a screen all day, now would be the best time to do it. The first hours trading for the start of the sessions are offering the best trading action, as new volume enters the markets. After that, the algo’s create the trading ranges and new traders get chopped up.
This is why the economic calendar is so important, you do not want to be entering into a trade just as the news comes out as the spike will just search for stops before potentially reverting back to the mean. However, if something material or new enters the markets, like yesterday when an interview with ECB executive board member Fabio Panetta was published, Mr Panetta was asked whether the ECB should continue to purchase bonds under the PEPP at the same pace as it does now, Mr. Panetta answered, “only a sustained increase in inflationary pressures, reflected in an upward trend in underlying inflation and bringing inflation and inflation expectations in line with our aim, could justify a reduction in our purchases. But this is not what we projected in March. And, since then, I have not seen changes in financing conditions or the economic outlook that would shift the inflation path upwards. In fact, we are now seeing a further undesirable increase in yields after the rise we observed earlier in the year. Financing conditions are tightening.”
See real-time quotes provided by our partner.
On the back of that type of data in this environment we saw the EURUSD fall back into last week’s range undoing all of the gains earlier this week. The EURUSD is still technical bullish and long-term moving averages show momentum is still to be expected to the upside with the daily 20 ema most likely to act as dynamic support should we get back down to 1.2150 on further news today.
The ActivTrader sentiment indicator shows that the majority of traders on the platform are still bearish, but this is a reduction from the more extreme readings earlier this week.
The new daily high has not been confirmed by the daily RSI, which is now seeing major divergence. Trendline support lies at 1.2162 and while above here scope remains for a test of 1.2349, the 2021 high.
See real-time quotes provided by our partner.
The GBPUSD has not been able to capitalise on any US dollar weakness and on the hourly chart the distribution pattern looks pretty set for lower prices in the near term. A break lower than the 1.4000 big level would confirm that the push higher was the last upthrust and we could be back down to a daily rising trend line 100 pips lower without any new bearish moves in the greenback.
See real-time quotes provided by our partner.
The New Zealand dollar is looking like the most likely to show some upward moves today as it carries on being the strongest of the crosses for the week. A break above 0.73155 which was yesterday’s spike high, could see momentum keep pushing higher into the yearly highs which printed in February. RBNZ Governor Orr reiterated that the bank is still willing to cut interest rates if needed, that the global outlook has continued to improve, and NZ labour market has been very resilient. As the economic outlook improves, he said that “we think we may be able to tighten mid-END 2022”.
