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As I discussed in today’s forex analysis video, the US dollar pushed into the 61.8% Fibonacci retracement which is confluent with a bearish trend line and market structure. The greenback found it too difficult to break even with US weekly initial jobless claims (IJC) data.
The US weekly IJC has fallen to a 14-month low, with the number of filings reducing by 34k to 473k last week. Companies like McDonalds are gearing up to employ more people and have signalled they will increase wages too. In other good news out of the US today, producer prices rose 0.6% in April beating market expectations but still falling under the previous months 1% rise.
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The US equities have rotated through their initial balance range and have begun a rebound in prices, reversing course after yesterday’s rout into the days close which followed the CPI report. There is a strategy that market makers can use to shake retail traders out of positions known as ‘Gap and Trap’, but in this instance, the gap up looks like it is on solid grounds in the S&P500, as once again the daily 50 ema acts as decent support. The S&P Volatility index has dropped 3 handles reflecting the change in trader’s sentiment today.
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Copper prices have tested lower again today as the dollar appreciated in price. There is still a real need for the industrial metal and demand is pushing supplies to the limits, so if the US dollar index should fall from the technical resistance level and continue in the larger trend to the downside, we could have a turnaround in copper prices soon.
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Another down day tomorrow in Oil will mean the WTI contract is ending this week in the red, having found sellers at the previous March 2021 swing high.
The ActivTrader sentiment indicator is showing that 61% of traders using the platform are still bullish which could see them get squeezed by contrarian traders out of their long positions.
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The EURUSD has as I expected found some support from previous market structure which is confluent with a trendline it had broken to the upside, which is now visually showing as support. The ActivTrader sentiment indicator also shows that the bears have trimmed their positions but still are the majority at 57% short to 43% long.
Tomorrow is a big day for the Euro and European bourses as we have the ECB meeting minutes from their April meeting.
Later on in the US session we receive US retail sales data and industrial production for April.
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The British pound has also found previous market structure, with an old swing high forming resistance now acting as support.
