April 7, 2021

Daily Market Analysis

Market Focus

Stocks dropped in the slowest trading day of 2021 after a rally that drove the equity market to all-time highs. Treasuries climbed.

Volume on U.S. exchanges slipped below 10 billion shares for the first time this year. Tech companies led losses in the S&P 500 on Tuesday, offsetting gains in retailers. The Dow Jones Industrial Average and the Nasdaq 100 also retreated. Stocks tied to the Archegos Capital Management blowup ended the session higher as investors brushed news that Credit Suisse Group AG unloaded more than $2 billion of the shares in the latest block trades stemming from the liquidation of Bill Hwang’s fund.

Trading has slowed in recent days as investors grappling with wild rotations awaited the start of the earnings season. Traders bought stocks in record amounts in the first quarter of 2021 as a combination of generous stimulus and bets on an economic recovery drove $372 billion into global equity funds, according to Bank of America Corp. strategists. The data confirm the bullish market sentiment that has pushed shares to fresh highs, with optimism over vaccination efforts outweighing concern that higher bond yields can interfere with the rally.

On the economic front, data showed U.S. job openings rose to a two-year high in February, led by gains in some of the industries hardest hit during the pandemic. The International Monetary Fund upgraded its global growth forecast for the second time in three months, while warning about a divergence between advanced and lesser-developed nations.so far.

Market Wrap

Main Pairs Movement:

The dollar dropped with Treasury yields as traders pared back on expectations for Federal Reserve rate hikes seen after a solid U.S. jobs report last week. The euro touched a two-week high, while the franc and yen were among top performers in the Group-of-10 category as traders continued to unwind short positions held on the currencies in the first quarter.

EUR/USD +0.4% to 1.1865; touched highest since March 23. The euro volatility skew shifts to depict less bearish sentiment for the currency.

USD/JPY -0.3% at 109.85 amid fund and stop-loss sales; gamma from 110 strikes may slow drop.

Technical Analysis:

EURUSD (4 Hour Chart)

EURUSD extended it nearly bullish momentum to intraday high, trading at 1.1877 level. Apparently, euro got a significant correction from down side then toward to previously shoulder level of “M shape” pattern at 1.1877. On RSI side, indicator has breached into over bought area that close at 74 figure as of writing, suggesting a high posiblity of cool down movement against nearly market sentiment. On the other hand, 15-long SMAs has golden cross 60-SMAs base on 4-hour interval. Therefore, we expect euro dollar is still north ways space in recently short term. However, we believe 1.1877 level is a first vital resistance for whether will it extend pickup movement. If breakthrough the first resistance, next price level could eye on 1.1990. On the south way, 1.1790 is deemed the first defended level, 1.1705 following.

Resistance: 1.1877, 1.199

Support: 1.1792, 1.1705

USDJPY (4 Hour Chart)

Japan yen has successive second negative way as a it tamp down from head pattern like highlight retangle, trading at 109.73 while market close. Currently, weakness market move is driving 15-long SMAs to decending trend whilst 60-long SMAs remain strongly upward trend. For RSI perspective, indicator close at 33 figure as of writing, suggesting a bearish movement for short term. In the lights of the bleak suggestion from two indicator, we expect yen would continue toward to south territory. Therefore, first upon resistance set on 110 around, 110.35 and 110.85 behind, respectively.

Resistance: 110, 110.35, 110.85

Support: 109.45, 109.25, 108.37

XAUUSD (4 Hour Chart)

Gold has formly stood over the consolidation and toward to right shoulder of “W shape” pattern which is trading at 1743 as of writing. For RSI perspective, indicator held 69 figures, suggesting a bullish ahead. On the other hand, 15-long SMAs has golden cross over 60-long SMAs that both of them are turning to asceding trend. Therefore, we expect gold still have a pickup space pursuant RSI indicator which not approach the over bought area yet. Meanwhile, strong momentum of price average indicator shows vigorously signal. However, we foresee there have an one-month-long resistance on 1754.53. Once break the powerful resistance, we believe market will toward to higher stage.

Resistance: 1754.53

Support: 1737.7, 1722.76, 1678.85

Economic Data