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Market Wrap
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The day started quite well for the EURUSD as it traded higher through the European session. The currency pair did a 180º turn at the start of the US session though as the market received US Housing data from the S&P CoreLogic Case-Shiller price index.
The EURUSD is still trading above its opening price and the ActivTrader sentiment index shows that 64% of traders remain bearish on the currency pair.
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At the London close, equities were trading off their highs and below their opening price as the market considered the latest round of pandemic news and economic data reports. This morning’s data showed that Germany’s GDP decreased 1.8% in the first quarter of the year, and the Institute for Economic Research (Ifo) reported German business sentiment improved in May beating market expectations.
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The US equities also started the US session with a tumble after an initial opening drive as the Volatility Index (VIX) rebounded higher. US 10 Year yields dropped as traders moved back into bonds for the 4th consecutive day with TLT now trading above 138.85 and last month’s closing price of 138.64. Federal Reserve Vice Chairman Richard Clarida stated on Tuesday that if the upward pressure on inflation persisted the Fed would react to bring it down, but the projections are still for the inflationary pressures to be temporary.
The big news against the big tech space is that Washington DC has sued Amazon in an antitrust case. Washington D.C. Attorney General Karl Racine stated Amazon violated DC law by “abusing and maintaining its monopoly power by controlling prices across the online retail market.” Furthermore, he asserted that the company maximized its profit by forcing consumers to pay “artificially high prices,” while threatening to remove third-party sellers if they sold their products on other platforms for lower prices.
The United States Consumer Sentiment Index came in at 117.2 in May, down 0.3 index points compared to the previous month, a report by the Conference Board showed on Tuesday. US consumer confidence for May missed expectations though the report said overall, consumers remain optimistic, and confidence should remain resilient in the short term, as vaccination rates climb, COVID-19 cases decline further, and the economy fully reopens.
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The US dollar index is still trading below the previously important level of $90 but has failed to take the year’s swing low thus far and is currently trading within last week’s range. The trend is down but the bears are only able to defend the previous week’s highs and take out new lows before seeing the price return to the range.
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The overall weaker US dollar is keeping prices of Oil afloat as the WTI contract trades back above $66 again. The consensus for today’s API oil stocks is for a drawdown that will encourage buyers to step in.
The ActivTrader sentiment indicator shows that 62% of traders are expecting lower prices, even though the price action is above the Ichimoku cloud indicator on the daily time frame.
