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Forex Market Updates

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USDCHF, D1
On the daily chart, the price continues its active growth, which began in April. Last week, the trading instrument reached its highest values since May 2020 at the level of 0.9758, if it is broken out, the uptrend may continue; however, at present, the development of a downward correction of quotations to the area of 0.9572 (retracement of 23.6%), 0.9533 (extension of 100.0%, Ascending Fan line of 38.2%) is not excluded. In general, the potential for strengthening USD/CHF is quite high, which is signaled by the upward reversal of Bollinger Bands and the increase in the MACD histogram in the positive zone, but Stochastic is reversing downwards in the overbought zone and may leave it, having formed a sell signal.

Forex Market Updates in Technical_usdchf-chart-1

USDCHF, W1
On the weekly chart, the price is actively breaking through the Opposite Descending Fan and is currently testing the level of 0.9670 (retracement of 61.8%), but has not consolidated above it yet. If successful, the growth of the trading instrument may continue to the levels of 0.9900 (the area of March 2020 highs) and 1.0192 (retracement of 100.0%). Otherwise, a corrective decline to the levels of 0.9510 (retracement of 50.0%) and 0.9350 (retracement of 38.2%) is possible. The uptrend in the asset continues, which is signaled by an upward reversal of Bollinger Bands and Stochastic, as well as an increase in the MACD histogram in the positive zone; however, the price chart leaving the upper Bollinger Band does not exclude a downward correction.

Forex Market Updates in Technical_usdchf-chart-2

In the near future, a downward correction to the levels of 0.9572 (retracement of 23.6%, D1) and 0.9510 (retracement of 50.0%, W1) is possible. If the price consolidates above 0.9758 (the Opposite Descending Fan line of 61.8%, W1), USDCHF will probably continue to strengthen towards 0.99 (the March 2020 highs area) and 1.0192 (retracement of 100.0%, W1).

Resistance levels: 0.9758, 0.99, 1.0192 | Support levels: 0.967, 0.9572, 0.951


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#1 - May 02, 2022, 07:35:32 AM

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The Canadian currency continues to resist the active growth of the US dollar, receiving support after the publication of data on Gross Domestic Product (GDP). At the moment, the quotes of USDCAD are trading in a local uptrend at around 1.2869.

Thus, according to the statistics presented, Canada's economy grew by 1.1% in February, which is the best indicator since March 2021. Experts also note a significant strengthening of the services sectors (by 0.9%) and the production of goods (by 1.5%). Sixteen out of twenty industries grew in this period, and preliminary data show that in March, the country's GDP may continue its positive dynamics and add another 0.5% due to the recovery of the national tourism market, as coronavirus restrictions were significantly eased. More than one million tourists visited Canada in the middle of last month for the first time since the pandemic, according to the Canada Border Services Agency (CBSA). As for the quarterly GDP indicator, the preliminary forecast indicates a possible growth of 1.4%, which may also have a positive impact on the national currency.

Forex Market Updates in Technical_usdcad-gdp

Meanwhile, the US dollar is still holding above 103.000 in the USD Index after Friday's release of macroeconomic statistics. The Labor Cost Index in Q1 increased by 1.4% from 1.0%, which exceeded the 1.1% expected by analysts, and the Earnings index rose by 1.20%, having risen by 1.00% a quarter earlier, while the annual Personal Consumption Expenditure Index stood at 6.6 points in March, outperforming February's 6.3 points.

Forex Market Updates in Technical_usdcad-chart

On the daily chart, the price continues to trade within a wide channel, actively approaching the resistance line. Technical indicators are holding a steady signal to open long positions: fast EMAs on the Alligator indicator are above the signal line, and the AO oscillator histogram is forming new ascending bars trading in the buy zone.

Support levels: 1.2798, 1.2448 | Resistance levels: 1.2937, 1.31
#2 - May 02, 2022, 10:19:37 AM

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GBPUSD, in anticipation of the meeting of the Bank of England
The pound shows flat trading dynamics against the US currency during the morning session on May 4, consolidating near the level of 1.2500. Traders are in no hurry to open new trading positions, preferring to wait for the publication of the US Fed Meeting Minutes. Analysts have little doubt that the key interest rate will be raised by 50 basis points at once; however, some of them allow for a correction by 75 basis points, citing record inflation over 40 years, as well as fairly stable trends in the labor market as arguments.

A meeting of the Bank of England will also take place this week, the result of which may be an increase in interest rates by 25 basis points to 1.00%, and by the end of 2022, experts predict an increase in the value in the range of 2?2.25%. Particular attention of traders will be riveted to the statement of the Governor of the regulator Andrew Bailey and his rhetoric regarding the steps of the financial authorities to curb inflationary pressure. Consumer prices in the United Kingdom are showing their fastest rate of growth in 30 years, already causing household incomes to plummet for the first time since 1956. It is estimated that electricity consumption for a typical British household this year will cost 620 pounds more than in 2021.

Macroeconomic statistics from the UK released yesterday provided additional support to GBP. The Manufacturing PMI from Markit in April rose from 55.3 to 55.8 points, which turned out to be better than the neutral forecasts of analysts, and the BRC Shop Price Index released today showed an acceleration year-on-year from 2.1 % to 2.7% in March, which coincided with analysts' estimates.

Forex Market Updates in Technical_gbpusd-1

On the daily chart, Bollinger Bands are steadily declining. The price range is expanding, making way to new record lows for the "bears". MACD indicator is trying to reverse upwards and form a new buy signal (the histogram has to consolidate above the signal line). Stochastic, having shown corrective growth at the end of the last trading week is once again reversing into a horizontal plane, indicating an approximate balance of traders' sentiment in the ultra-short term.

Resistance levels: 1.25, 1.26, 1.2674, 1.28 | Support levels: 1.2400, 1.2334, 1.225, 1.22

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#3 - May 04, 2022, 08:18:40 AM

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The European currency shows mixed trading dynamics, consolidating near 1.0600 and local highs from April 27. The day before, EURUSD showed the strongest growth in the last few weeks, which was the market's reaction to the results of the two-day meeting of the US Federal Reserve.

As expected, the US regulator raised the interest rate by 50 basis points to the range of 0.75%?1.00% and announced the start of a quantitative tightening program, but it will not immediately reach the final volumes of purchases. From June 1, the Fed will start selling securities for a total of 47.5 billion dollars, after which it will increase the total monthly sales to 95 billion dollars within three months. The "hawks", who expected that the regulator would immediately bring purchases to the final amount, were somewhat disappointed by this decision. Additional pressure on the dollar was exerted by the rhetoric of the Chair of the US Federal Reserve, Jerome Powell, who said that the issue of raising the interest rate by 50 basis points would also be discussed at the next meetings. Thus, the risks that the indicator will be corrected at a more aggressive pace have almost completely disappeared.

In turn, pressure on the euro was exerted by frankly weak statistics on Retail Sales in the eurozone. In March, the indicator fell by 0.4% after rising by the same amount a month ago, and in annual terms, the pace slowed sharply from 5.2% to 0.8%, while analysts had expected an increase of 1.4%.

At the moment, eurozone household spending continues to grow strongly against the backdrop of rising gas and energy prices. Electricity rates, which nearly doubled in 2021, will add another 50% to the cost this year before a correction begins, according to World Bank statistics. The tightening of anti-Russian sanctions in connection with the escalation of the military conflict in Ukraine also contributes to the negative dynamics. The day before, the President of the European Commission, Ursula von der Leyen, announced the readiness to introduce a gradual embargo on crude oil for six months, and on oil products until the end of this year. If the EU countries fail to replace the volumes, the economy will face negative consequences: the already record inflation will continue to increase and it will become more difficult for companies to fulfill their obligations to customers, which will undoubtedly lead to stagnation.

Forex Market Updates in Technical_eurusd-1

On the daily chart, Bollinger Bands are moderately declining. The price range is slightly narrowing, staying spacious enough for the current activity level in the market. MACD is growing, maintaining a relatively strong buy signal, being located above the signal line. Stochastic is showing similar dynamics; however, the indicator line is rapidly approaching its highs, indicating the risks of overbought EUR in the ultra-short term.

Resistance levels: 1.0640, 1.069, 1.0726, 1.0767 | Support levels: 1.0576, 1.052, 1.047, 1.04

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#4 - May 05, 2022, 07:44:44 AM

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The New Zealand dollar shows mixed trading dynamics during the Asian session, consolidating near 0.653 and its local highs from April 27. On Wednesday, NZDUSD showed a sharp increase, which allowed the instrument to move away from record lows.

The investor activity was facilitated by the results of the meeting of the US Fed. As expected, the regulator raised interest rates by 50 basis points and also announced the start of a quantitative tightening program starting June 1. Initially, it is planned to buy securities for a total of 47.5 billion dollars, but then within three months the volume will be increased to 95 billion dollars. Thus, the US financial authorities decided not to rush to tighten monetary policy, which crossed out the premature conclusions of traders on the upcoming rate hikes by 75 basis points at once.

Forex Market Updates in Technical_nzdusd-1

On the daily chart, Bollinger Bands are steadily declining. The price range is narrowing actively, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD has reversed to growth having formed a new buy signal (located above the signal line). Stochastic shows a more confident uptrend, but also points to growing risks of the New Zealand dollar being overbought in the nearest time intervals.

Resistance levels: 0.6567, 0.6600, 0.6650, 0.67 | Support levels: 0.6500, 0.6450, 0.64, 0.635

Forex Market Updates in Technical_nzdusd-2
#5 - May 05, 2022, 12:27:54 PM

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