Gold and silver markets are inching closer to embarking on new uplegs. Silver outperformed last week and appears to have the momentum behind it to lead a fresh precious metals breakout.
Silver prices will run into some overhead resistance just above the $16/oz level. Once broken, that technical line on the weekly chart could serve as a springboard for a run toward $19/oz – and ultimately higher.
Zooming in on the daily chart, silver is trading solidly above its 50-day moving average for the first time since late February, suggesting a breakout is indeed in progress.
The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.
Tomorrow we have some key data which could give us some insight into how the world’s economies will evolve in the aftermath of the COVID-19 pandemic.
We have the release of inflation data from the world’s two largest economies. Crucially, this includes the one which is already recovering.
There is still quite a bit of debate over whether we can expect another prolonged period of deflation or inflation. And that is key for how to develop investment portfolios.
As with other economic measures, there is an increased focus on China, because they overcame their outbreak sooner. China also did ramp up stimulus measures, but not at the scale that other countries did.
Also, they already had a relatively high inflation rate before the outbreak. That said, traders might still want to get clues from China about what we might expect in other economies, keeping the aforementioned caveats in mind.
The US is Different
Social distancing measures were in force in the US for the entirety of April. That no doubt will have distorted the regular measurement.
For one, the measures were not equal across the country. But, areas with more economic activity, such as Eastern Seaboard and California, had more stringent restrictions than the rest of the country.
If certain stores, such as clothing or accessories, are closed, you can’t get an inflation measure for those products. Other stores, such as large supermarkets, made a point of not adjusting prices during the pandemic.
Other services that were normally charged either were provided for free or payment was postponed (such as rent, mortgage payments).
The other factor to include in the analysis for both countries is the price of oil.
Many companies had forward hedging. This means that crude-dependent products and services didn’t instantly drop in price. However, by April, a significant portion of that adjustment should have filtered through, applying significant deflationary pressure.
What We Are Looking for From China
First to report is China in the early morning for Europe and the Americas.
The figure that usually gets the market’s attention is the monthly CPI change. Expectations are for this to be at -0.5% compared to -1.2% for March. This means a further reduction in annualized inflation to 3.7%, compared to 4.3% in the prior reading.
We could partially explain the deflation by a sort of return to normal as food prices spiked in February and March. Hog prices were already high before the pandemic, and the disruption in transportation further escalated the problem.
That, combined with an increase in prices as stores opened in a staggered fashion, allowed for momentary price increases that stabilized once the competition was restored.
What We Are Looking for From the US
In the US, we are looking at the monthly CPI ex-food and energy (core.) Projections are for this to come in at -0.2% compared to -0.1%.
Last month’s drop in inflation was attributed to the COVID-19 outbreak, and we can expect that to be exaggerated this time around.
Expectations are for the annualized CPI change to move away from the Fed’s target, coming in at 1.7% compared to 2.1% prior. But lower inflation at the start of a recession is normal.
Shares of Protagonist Therapeutics traded higher and reached a new 52-week high price after the company released Q1/20 financial results and positive data from its Phase 2 study of PTG-300 in patients with polycythemia vera, a type of blood cancer.
After U.S. markets closed for trading yesterday, Protagonist Therapeutics Inc. (PTGX:NASDAQ)reported financial results for Q1/20 ending March 31, 2020, and also provided an update on clinical development programs.
The company’s President and CEO Dinesh V. Patel, Ph.D., commented, “Based on the highly promising and consistent clinical responses achieved to date, we are pleased to announce polycythemia vera as the first indication for a pivotal study of PTG-300…With an orphan drug development regulatory path forward, we are focused on rapidly advancing PTG-300 as a first-in-class non-cytoreductive hepcidin hormone mimetic agent for this indication with significant unmet need. With a highly focused development effort forward with PTG-300 for polycythemia vera, and deferring PN-943 Phase 2 initiation due to the current COVID-19 environment, we have reduced our operational expenditures and now have an additional six months of cash runway estimated to extend through mid-2022.”
The company provided an update on the status of its three main pipeline drug candidates. These candidates include PTG-300, which is currently being studied in a Phase 2 trial study for use in polycythemia vera; PTG-200 that is part of a Phase 2 global study in moderate-to-severe Crohn’s disease, which has been temporarily suspended due to the COVID-19 situation; and PN-943, which the company plans to test in a Phase 2 study in approximately 150 patients with moderate-to-severe ulcerative colitis.
The company stated that as of March 31, 2020, it had cash and cash equivalents on hand totaling $117.5 million. It reported that it earned license and collaboration revenue in Q1/20 of $3.6 million, compared to $1.6 million in Q1/19.
The firm stated that research and development expenses for Q1/20 were $18.8 million, versus $12.4 million in Q1/19 and noted that the increase was due primarily to increased collaborative clinical development costs.
The company posted a net loss of $20.1 million, or ($0.72) per share in Q1/20, compared to a net loss of $14.1 million, or ($0.58) per share in Q1/19.
In a separate news release, Protagonist Therapeutics announced initial data from its ongoing Phase 2 study of PTG-300 in patients with polycythemia vera. The company stated that “the current results demonstrate that treatment with PTG-300 at individualized doses ranging from 10 mg to 80 mg for up to 28 weeks provided dose-related control of hematocrit levels and eliminated the need for phlebotomy in all six out of six patients that received the dosing as per protocol…and in addition, positive symptomatic measurements related to the ability of PTG-300 to address iron deficiency in these frequently phlebotomized patients were observed, with increases in serum ferritin values approaching the range observed in healthy subjects.”
The company’s Chief Medical Officer Samuel Saks, M.D., commented, “While further follow up and data from additional patients will be needed to confirm the continuity of the robust clinical responses observed to date, we believe that this study provides a compelling rationale to initiate planning for a pivotal program in polycythemia vera…As a peptide mimetic of the natural hepcidin hormone, PTG-300 is believed to limit the excess number of red blood cells in polycythemia vera by reducing iron available for red blood cell production.”
Ronald Hoffman, M.D., director of the Myeloproliferative Diseases Program at the Icahn School of Medicine at Mount Sinai and an investigator in the PTG-300 polycythemia vera study, remarked, “These initial data demonstrate the potential of PTG-300 to almost entirely avoid the need for phlebotomy in the treatment of polycythemia vera by persistent control of hematocrit levels to below 45 percent…PTG-300 offers the possibility of maintaining patients consistently below 45 percent hematocrit levels with weekly administration of a mimetic of the endogenous iron regulator without the up and down excursions inherent in typical phlebotomy therapy….These early results are very encouraging and suggest the potential for a paradigm shift for the treatment of polycythemia vera.”
The company advised that the study is designed to monitor the safety profile and to obtain evidence of efficacy in patients requiring frequent phlebotomies. The firm has enrolled eight patients in the continuing study and is looking to increase the number to 50 patients. The company reported that administration of PTG-300 has been well tolerated in the study.
Protagonist Therapeutics, headquartered in Newark, Calif., describes its business as “a clinical stage biopharmaceutical company that utilizes a proprietary technology platform to discover and develop novel peptide-based drugs to transform existing treatment paradigms for patients with significant unmet medical needs.” The company’s drug candidate pipeline includes PTG-300 used in the treatment of iron overload anemia and related rare blood diseases including beta-thalassemia and polycythemia vera.
Protagonist Therapeutics began the day with a market capitalization of around $212.1 million with approximately 27.44 million shares outstanding and a short interest of about 4.7%. PTGX shares opened 27% higher today at $9.84 (+$2.11, +27.30%) over yesterday’s $7.73 closing price and then climbed to a new 52-week high price this morning of $16.82. The stock has traded today between $9.65 and $16.82 per share and is currently trading at $15.32 (+$7.59, +98.19%).
Disclosure: 1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. 3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. 6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.
The euro is under pressure as Europe’s unity is again in question. While most major central banks opened their balance sheets to revive their economies, the clash between Germany’s constitutional court and the European Central Bank has added a layer of uncertainty.
The ECB will have to justify its overly stretched asset purchase program or may lose Bundesbank’s support. Perhaps this week’s GDP number will do Lagarde a favor. A low reading may inject a sense of urgency and put the single currency back on track.
The pair is heading towards 1.6110, while 1.7100 around the 30-day moving average is key resistance.
USDJPY Weakens on Negative Rates Rumours
The US dollar continues to drift lower against the Japanese yen despite businesses reopening across states. Markets are wary of a worse-than-expected downturn, which could force the Fed into uncharted territory.
Speculations of negative rates by the end of the year are weighing on the greenback. With the unemployment rate nearing 15%, a rebound in the real economy is on everyone’s wish list. Otherwise, the dollar may continue to suffer from the pricing of a protracted recession.
USDJPY has retraced more than half of its March rally. The 61.8% (105.10) Fibonacci level is the next target, and 108.00 is the immediate resistance.
USDCAD Struggles as Oil Recovers
The Canadian dollar has shown some strength lately as oil prices rallied back from the abyss. Investors are betting on a gradual recovery in oil demand, and in conjunction with production cuts, Canada’s trade-dependent economy could be the main beneficiary.
Despite a surge in Friday’s unemployment figure, the loonie may find support from hopes that fiscal and monetary policies would start to ease economic strains.
The pair remains in sideways actions between 1.3850 and 1.4250 until a breakout chooses the next direction.
GBPJPY Falls Amid Economy’s Darkest Times
The Bank of England pledged a ‘total and unwavering commitment’ last Thursday as the economy is facing the sharpest decline in over 300 years. The central bank forecasts a 25% drop in GDP in the second quarter and this week’s Q1 data will define the baseline from the start of the crisis.
A serious contraction from March may raise voice in favor of further stimulus. The pound sterling could continue to grind lower against the safe-haven currency.
The pound has started to head lower near the 50% (134.50) Fibonacci retracement level. A drop below 128.00 could lead to a sell-off into 124s.
Worse than forecast Italy’s industrial production bearish for EURUSD
Italy’s industrial production fell in March more than expected : industrial production fell 28.4% in March after 1% decline in prior month, when a 20% drop was expected. This is bearish for EURUSD.
EURUSD is falling towards 1.0801. Possibly, the pair may reach this level and then start a new correction towards 1.0840, thus forming a new consolidation range between these two levels. If later the price breaks this range to the downside, the market may resume trading downwards with the target at 1.0730; if to the upside – choose an alternative scenario to continue the correction to reach 1.0900, but may yet start plummeting at any moment.
GBPUSD, “Great Britain Pound vs US Dollar”
After completing the descending impulse along with the correction, GBPUSD is falling again to break 1.2393. After that, the instrument may continue trading downwards towards 1.2343. This movement may be considered as a part of the wave with the target at 1.2307.
USDRUB, “US Dollar vs Russian Ruble”
USDRUB is still falling towards 72.50. Later, the market may form one more ascending structure to test 74.00 from below and then resume trading inside the downtrend with the target at 71.30.
USDJPY, “US Dollar vs Japanese Yen”
USDJPY is moving upwards. Today, the pair may expand reach 107.10 and then start a new correction towards 106.73. After that, the instrument form one more ascending structure with the target at 107.26.
USDCHF, “US Dollar vs Swiss Franc”
USDCHF is consolidating around 0.9700. If later the price breaks this range to the upside at 0.9724, the market may resume trading upwards with the target at 0.9800; if to the downside at 0.9680 – continue the correction towards 0.9655.
AUDUSD, “Australian Dollar vs US Dollar”
AUDUSD is moving upwards. According to the main scenario, the price is expected to grow towards 0.6565 and then start another correction with the target at 0.6470.
BRENT
Brent is still consolidating around 30.70. The main scenario implies that the price may expand the range up to 32.40 and then fall towards 30.70. If later the price breaks this range to the upside, the market may resume trading upwards with the target at 36.03; if to the downside – start a new correction to reach 29.00 and then form one more ascending structure towards 38.20.
XAUUSD, “Gold vs US Dollar”
Gold has formed the consolidation range around 1709.58; right now, it is trading to expand it down to 1696.76. After that, the instrument may start another growth with the target at 1745.25.
BTCUSD, “Bitcoin vs US Dollar”
After completing the correction at 8000.00, BTCUSD is growing to break 8888.00. Later, the market may continue trading upwards to reach 9500.00 and then correct to test 9000.00 from above. After that, the instrument may form one more ascending structure with the target at 9800.00.
S&P 500
After forming the consolidation range around 2900.0 and breaking it to the upside, the Index is expected to trade upwards and reach 2970.0. Later, the market may return to 2900.0 to test it from above and then resume trading upwards with the target at 3027.5.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
As we can see in the H4 chart, XAUUSD continues consolidating in the form of a Triangle pattern between the high at 1747.77 and 23.6% fibo. The main scenario implies a breakout of the high and further growth towards the post-correctional extension area between 138.2% and 161.8% fibo at 1798.90 and 1858.60 respectively. At the same time, there might be another scenario, according to which, the instrument may form a new descending wave with the targets at 38.2% and 50.0% fibo at 1634.40 and 1599.50 respectively.
In the H1 chart, the pair is stuck between 23.6% fibo and the high at 1677.77 and 1747.77 respectively. The MACD indicator is moving above 0 and it’s a signal in favor of a further growth.
USDCHF, “US Dollar vs Swiss Franc”
As we can see in the H4 chart, the long-running correction is transforming from the Triangle into the Flat. If the price breaks the current channel’s upside border, the pair may grow to reach the local high at 0.9901 and even mid-term 76.0% fibo at 0.9982. At the same time, one shouldn’t exclude the possibility that the par may yet resume falling with the downside target at 61.8% fibo (0.9453).
In the H1 chart, the divergence made the pair start a new correctional decline, which has already reached 50.0% fibo. The next downside targets may be 61.8% and 76.0% fibo at 0.9663 and 0.9635 respectively, as well as the low at 0.9588. In the case of further growth, the upside target will be the local high at 0.9784.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
On Friday, the US currency closed the trading session with a decline against a basket of currency majors. The US dollar index (#DX) closed in the negative zone (-0.14%). The United States published ambiguous statistics on the labor market for April. Currency majors have shown a multidirectional response to this report. The main indicators of the US labor market have deteriorated significantly. At the same time, published data exceeded market expectations. The number of people employed in the nonfarm sector of the country decreased by 20.5 million compared to the forecasted value of 22.0 million. The unemployment rate increased significantly and counted to 14.7%. Experts expected the figure at 16.0%.
The greenback is under pressure due to tension in relations between the US and China. So, on Friday, Donald Trump announced that he was not sure whether to complete the “phase one” trade deal with China. Executive Office of the President is considering punitive measures against Beijing because China could not prevent and control the outbreak of coronavirus. Trump said the trade deal would be terminated if China did not meet its purchase commitments.
The European Commission may initiate a sanction procedure against Germany, as it considers that the German Federal Constitutional Court violated the priority of EU law. It should be recalled that the German Court blamed the ECB for the issue that buying government bonds seemed to be an excess of the powers of the regulator and a violation of German law. The European Court of Justice in Luxembourg supports the European Commission in this matter. The President of the European Commission, Ursula von der Leyen, noted that the accusation of the German Constitutional Court raised two EU issues: the euro system and the European legal system.
The “black gold” prices have fallen again. At the moment, futures for the WTI crude oil are testing the $23.90 mark per barrel.
Market indicators
On Friday, there was the bullish sentiment in the US stock market: #SPY (+1.65%), #DIA (+1.97%), #QQQ (+1.37%).
The 10-year US government bonds yield is consolidating. At the moment, the indicator is at the level of 0.69-0.70%.
The news feed on 2020.05.11:
Today, the publication of economic reports is not expected.
– As advanced economies have failed to contain COVID-19, fattened epidemic curves could make the global pandemic longer and deadlier.
In my new report, The Tragedy of Missed Opportunities, I have examined the huge human costs and economic damage of COVID-19 [for the report, click https://www.differencegroup.net/coronavirus-briefs ].
Before advanced economies began to flatten the epidemic curve, they fattened it for 6-8 weeks. This could prolong the global pandemic and cause secondary waves of imported infections and new virus clusters worldwide.
Defective herd immunity
Like the United States, most of Europe initially relied on voluntary measures until the accelerated virus spread forced stricter measures, but only belatedly. In the UK, Prime Minister Boris Johnson tried to portray inadequate preparedness as a foresighted strategy: “We can turn the tide within the next 12 weeks.”
At first, Johnson, who eventually contracted the virus himself, advocated “herd immunity” as a new strategy, relying on the advice of a group of epidemiologists. The idea was to keep virus transmission at low levels until a vaccine was available. A long lockdown was deemed impractical, due to the negative economic impact.
One report from Oxford University even claimed that the UK had already achieved herd immunity. It presumed that more than half of the population had had the virus and recovered. So, there was no longer any need to trace the contacts of every suspected case. UK would only test people who were admitted to hospitals.
To avoid a second peak in the winter, Sir Patrick Vallance, the U.K.’s chief scientific adviser, said the UK would suppress the virus “but not get rid of it completely.” While it could protect vulnerable groups, such as the elderly, herd immunity would reduce transmission in the event of a winter resurgence. In effect, Vallance thought “60 percent” of people would need to be infected for herd immunity.
In reality, herd immunity is neither a new idea nor a strategy. The idea first evolved in the 1920s. It was recognized as a recurring phenomenon when, after a significant number of children had become immune to measles, new infections temporarily decreased. As a result, mass vaccination to induce herd immunity became common.
However, as of yet, there’s no vaccination against COVID-19. And access to adequate, available and safe vaccination or therapies may take until spring 2021, or longer. Moreover, no country should ever rely on a highly contagious and deadly infectious agent to create an immune population.
Without effective vaccine, risk groups – the elderly, those with chronic pulmonary conditions, hypertension, diabetes and asthma patients, and those without adequate access to affordable health care – would be condemned into a premature death. That’s the worst kind of eugenics in the 21st century.
Eventually, the idea of herd immunity was rejected in the UK as unrealistic as the government finally opted for stricter lockdown measures that China, Hong Kong and South Korea had opted for already in January. Meanwhile, the epidemic curve had been fattened – not flattened – for some 6-8 weeks (Figure).
FigureUK: From misguided theories to extended lockdown
Fattening the curve
In Wuhan and Hubei, a faster infection rate had resulted in a strained healthcare system, many daily hospital visits and many infected people being turned away. That’s why social distancing was adopted to contain the spread. The goal was to “flatten the curve” quickly to reduce the potential of the virus to spread exponentially.
Despite the rejection of the idea of herd immunity, most countries in Europe and North America have in fact adopted a (failed, partial) version of it. Since they resorted to social distancing only belatedly, their health care systems became overloaded, healthcare professionals were penalized and the virus got a free ride.
Due to the belated and ineffective responses, these countries – from the U.S. to the Euro area and the UK – effectively fattened the curve before more determined efforts to flatten it. And that has broad ramifications. First, the human costs – infection cases and fatalities – will prove far higher than initially expected.
Second, in a global, interconnected economy, it is the weakest links that determine the future of the whole, through flows of trade, investment and mobility. That’s why, when countries that failed to contain the virus exit from lockdowns, they may serve as reservoirs of future infections elsewhere.
Third, the rise of imported cases in China, Hong Kong, and South Korea in the past weeks are just a prelude for waves of potential imported infections later in 2020.
Fourth, since COVID-19 is a global pandemic, it has potential to become endemic, which means elevated long-term risks in emerging and developing countries that have relatively weaker healthcare systems.
Finally, since the de facto herd immunity in the West has caused the virus to multiply into millions of effective cases, the potential for new mutations will be heightened, which will add to uncertainty while complicating the hoped-for vaccine response.
The cost of complacency
As China and other countries that mobilized early and broadly against the virus have shown, effective containment can dramatically lower the number of cases and deaths and thus drastically minimize the economic damage.
In the UK, the tragedy of the missed opportunities is particularly painful. At the time of the herd immunity debate in mid-March, when Chinese and South Korean measures were still shunned as too “authoritarian” and “invasive,” there were some 1,400 recorded cases and 50 deaths in the UK. As in the US, inadequate testing virtually ensured that thousands more were not detected, while the opportunity window for containment was missed.
As a result, today, less than 2 months later, the pandemic has cost the UK some 220,000 cases and 32,000 deaths. In 8 weeks, the recorded cases have multiplied almost 160-fold and deaths by 640 times, respectively. Worse, the curve hasn’t been flattened yet.
But that’s not the end of the bad news. Like other contagious network effects, what has happened in the UK (and the US and other advanced economies that responded to the pandemic challenge too late) won’t stay within its borders. When the UK and other advanced economies exit their lockdowns in the coming weeks, the costs of their failures have potential to further spread worldwide.
Even when less prosperous economies, have tried to flatten the curve with stricter and longer quarantines, they will soon have to cope with inflows of people and goods from advanced economies where containment failed, proved partial and resulted in defectiveherd immunity.
The kind of imported infections that China, Hong Kong, South Korea and other relatively successful virus fighters have recently witnessed could then become a new norm around the world.
The time to prepare for these imported infections is now.
About the Author:
Dr. Dan Steinbock is an internationally recognized strategist of the multipolar world and the founder of Difference Group. He has served at the India, China and America Institute (USA), Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more, see https://www.differencegroup.net
The commentary is based on Dr Steinbock’s briefing on May 9 and report The Tragedy of Missed Opportunities: The COVID-19 Human Costs and Economic Damage (SIIS)
On Friday, the United States released ambiguous statistics on the labor market for April. Currency majors have shown a multidirectional response to this report. The main indicators of the US labor market have deteriorated significantly. At the same time, published data exceeded market expectations. The number of people employed in the nonfarm sector of the country decreased by 20.5 million compared to the forecasted value of 22.0 million. The unemployment rate increased significantly and counted to 14.7%. Experts expected the figure at 16.0%. The coronavirus epidemic is still in the focus of attention. The number of infected with COVID-19 virus in the world has approached the mark of 4 million. Currently, EUR/USD quotes are consolidating in the range of 1.0815-1.0855. Positions should be opened from these marks.
Today, the publication of important economic releases is not planned.
Indicators do not give accurate signals: the price has crossed 50 MA.
The MACD histogram is near the 0 mark.
Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates the bearish sentiment.
Trading recommendations
Support levels: 1.0815, 1.0775, 1.0750
Resistance levels: 1.0855, 1.0885, 1.0925
If the price fixes above 1.0855, the EUR/USD currency pair is expected to recover. The movement is tending to 1.0885-1.0925.
An alternative could be a drop in EUR/USD quotes to 1.0780-1.0750.
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.23508
Open: 1.23933
% chg. over the last day: +0.37
Day’s range: 1.23809 – 1.24377
52 wk range: 1.1466 – 1.3516
The technical pattern on the GBP/USD currency pair is still ambiguous. The British pound is in a sideways trend. Financial market participants assess a report on the US labor market for April. Today, London and Brussels will resume negotiations on relations after Brexit. At the moment, the key support and resistance levels are 1.2365 and 1.2435, respectively. We recommend opening positions from these marks.
The news feed on the UK economy is calm.
Indicators do not give accurate signals: the price has fixed between 50 MA and 100 MA.
The MACD histogram is in the positive zone, but below the signal line, which gives a weak signal to buy GBP/USD.
Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates the bearish sentiment.
Trading recommendations
Support levels: 1.2365, 1.2310, 1.2270
Resistance levels: 1.2435, 1.2485, 1.2545
If the price fixes above 1.2435, GBP/USD quotes are expected to rise. The movement is tending to 1.2480-1.2520.
An alternative could be a decrease in the GBP/USD currency pair to 1.2320-1.2280.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.39758
Open: 1.39325
% chg. over the last day: -0.32
Day’s range: 1.39001 – 1.39463
52 wk range: 1.2949 – 1.4668
The USD/CAD currency pair has become stable after a significant drop at the end of last week. The loonie is currently consolidating. Investors assess labor market reports in the US and Canada. The key support and resistance levels are 1.3900 and 1.3955, respectively. A trading instrument has the potential for further decline. We recommend paying attention to the dynamics of oil quotes. Positions should be opened from key levels.
Today, the publication of important economic releases is not expected.
Indicators signal the power of sellers: the price has fixed below 50 MA and 100 MA.
The MACD histogram is in the negative zone, indicating the bearish sentiment.
Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which gives a signal to buy USD/CAD.
Trading recommendations
Support levels: 1.3900, 1.3850
Resistance levels: 1.3955, 1.4010, 1.4050
If the price fixes below the support level of 1.3900, a further drop in USD/CAD quotes is expected. The movement is tending to 1.3860-1.3840.
An alternative could be the growth of the USD/CAD currency pair to 1.3990-1.4020.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 106.275
Open: 106.515
% chg. over the last day: +0.26
Day’s range: 106.488 – 107.249
52 wk range: 101.19 – 112.41
The USD/JPY currency pair has been growing. The trading instrument has reached key extremes. At the moment, USD/JPY quotes are testing the resistance level of 107.25. The 106.90 mark is already a “mirror” support. The yen has the potential for further decline against the US currency. We recommend paying attention to the dynamics of US government bonds yield. Positions should be opened from key levels.
The news feed on Japan’s economy is calm.
Indicators signal the power of buyers: the price has fixed above 100 MA.
The MACD histogram is in the positive zone and continues to rise, indicating the bullish sentiment.
Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which gives a signal to buy USD/JPY.
Trading recommendations
Support levels: 106.90, 106.70, 106.45
Resistance levels: 107.25, 107.50
If the price fixes above 107.25, further growth of USD/JPY quotes is expected. The movement is tending to 107.50-107.70.
An alternative could be a decrease in the USD/JPY currency pair to 106.70-106.50.
