Forex-novosti i prognoze od 10-05-2021

eFXdata reports that Danske Research discusses EUR/USD outlook and maintains a tactical bullish bias in the near term.

"For EUR/USD, Friday did prove to take spot higher, though not exactly in the way we had expected. With US payrolls coming in quite short of its 1m target (and some of that might be due to seasonality adjustments), the market took to roll back any notions of near-term tightening/talk of tapering by the Fed. In turn, lower-for-longer and rising inflationary pressures in the market continue to be EUR/USD positive. "

"This week, focus will turn to a number of Fed speeches, US CPI which is set to accelerate further and retail sales. Given markets have reduced tightening expectations, the key to look out for in terms of a mild dollar comeback would be hawkish Fed speeches. Much stronger than anticipated retail sales could probably have a similar effect. Generally, we expect EUR/USD to stay above 1.20 near term."

Francesco Pesole, FX Strategist at ING, reports that all G10 currencies except sterling saw a net increase in speculative positioning against the U.S. dollar in the week ending 4 May, a sign that USD bearish sentiment is rising again. 

"CFTC data on speculative positioning ending 04 May provided clear indications that USD bearish sentiment is consolidating again. The aggregate USD positioning vs reported G10 currencies (i.e. G9 excluding Norway's krone and Sweden's krona) moved deeper into net short territory for a fourth consecutive week, with net shorts now worth 6% of open interest."

"All currencies except GBP saw an increase in their net positioning versus the USD in the week ending 04 May. While euro positioning was only marginally changed, currently at +13% of open interest, the yen saw some trimming of its very wide net shorts, possibly aided by the more stable environment for Treasury yields. That said, there is still considerable room for JPY shorts to be unwound considering that it is the only currency with a net short positioning in the G10, currently worth 27% of open interest, although much will depend on the moves in US yields over the coming weeks."

"With the commodity space being broadly supported of late, CAD and NZD continued to see a larger increase in their net longs compared to their closest peer, the Australian dollar. CAD net longs are currently worth 13% of open interest, NZD net longs 19%, both being at the top end of their one-standard-deviation band."

"Sterling was the only currency that experienced a drop in its net positioning in the week ending 04 May, as its net long positions were trimmed by 5% of open interest, and are now worth 13%."

"There is a possibility that the recent political noise in the UK - with Prime Minister Boris Johnson at the centre - has prompted some speculative investors to cash in on their long GBP bets given the perceived higher risk of political instability in the country. What might also explain the long-squeeze in sterling is that part of the market may have positioned for a less hawkish message by the Bank of England on Thursday and possibly an outcome from the Scottish elections that could have raised the risk of a new Independence Referendum."

FXStreet reports that Benjamin Wong, Strategist at DBS Bank, notes that gold is at its best levels in six months as prices recover from March’s $1676 lows. The recovery is mindful of the strong confluence support zone of $1660-$1670 (April-June 2020 price congestion zones). With a near-term bullish double-bottom pattern evolving into another bullish pattern of a reverse head-and-shoulders, the onus is to buy tactical dips that would eye a sustained break of the 200-day moving average of $1850.

“It would take two hands to clap in unison for gold to stage further advances, beyond its current best showing in six months. Spot gold prices need to surmount the 200-DMA at $1850, and gold exchange-traded funds prices (GLD US) need to tick above the dropped down resistance line from last August’s 194 that would obliterate the key moving average resistance at 174.” 

“With a near-term resistance line that trails from $1874 easily taken out, it should imply that gold remains a buy-on-dips proposition, with the support pivot at $1798 worthy of a look.”

FXStreet reports that GBP/USD has surged above 1.41, benefiting from dollar weakness and from favorable election results in the UK. In the view of economists at TD Securities, the greenback should remain in a consolidative tone until data suggests that April's payrolls were a temporary aberration. If anything, it should redirect focus to currencies where central banks have undergone a 'hawkish' pivot to perform vs. the USD. This includes the pound.

“Over a more medium-term horizon, a softer payrolls report should reinforce a broadly consolidative tone in the USD. If anything, it will probably help to redirect focus in currencies where a 'hawkish' central bank pivot has already occurred. This includes the GBP after last week's BoE meeting.”

“GBP has been the day's best performer today after a set of market-friendly outcomes in local elections were announced. There wasn't a lot of election risk premium priced in ahead of the event (if any), so it is an open question as to how far GBP's uptick can run.” 

“Cable has finally been able to make a sustained push above 1.40 for the first time since February, making that threshold now primary support for the foreseeable future.” 

U.S. stock-index futures were mixed on Monday but hovered near records as raising commodity prices supported shares of miners, energy and steel companies.

Global Stocks:

FXStreet notes that the S&P 500 surged higher following its bullish ‘outside day’ for a clear move above 4200 but with strength for now having been capped at potential trend resistance from mid-April, today seen at 4240. The index needs to move above this latter level to end thoughts of a consolidation phase for a direct resumption of the core bull trend, in the view of the Credit Suisse analyst team.

“A move above 4240 is needed in our view to confirm a conclusive break higher to end thoughts of a broader consolidation phase, with Fibonacci projection resistance seen next at 4256/60, which we would look to cap at first. Big picture though, we would look for a move to 4350.” 

“A fresh rejection from 4238/40 followed by a fall and close below the price gap from Friday at 4203/02 would mark a false break higher to reinforce our scenario for a lengthier consolidation phase. "

• Says that Friday's jobs numbers were "definitely surprising"
• Thinks that disappointing jobs number will be a "one-month thing" due to restarting economy
• Unemployment benefits giving workers time to look more carefully about jobs, health risks
• I think workers are looking for jobs that will be good for 5 years, not 3 months
• Fed will have to pay attention to wages and whether that will lead to sustainable inflation over years, I don't think it will
• There isn't enough supply for a lot of goods
• Once all the bottlenecks are worked out, I think it will level out
• Beyond temporary factors, inflation expectations will be very important, we'll be watching that
• Inflation rates at 2.5% don't bother me as long as it's consistent with averaging 2% over time
• Going to take quite some time for Fed to see enough data to shift policy

• We're going to have to see more employment numbers and we're going to need to see inflation to start a taper talk. When data is stronger, we'll be talking about it

(company / ticker / price / change ($/%) / volume)

Alphabet A (GOOGL, GOOG) downgraded to Neutral from Buy at Citigroup; target $2415

Facebook (FB) downgraded to Neutral from Buy at Citigroup; target $320

Intel (INTC) downgraded to Underweight from Neutral at Atlantic Equities; target lowered to $45

FXStreet notes that AUD/USD has broken out of its range to the topside above 0.7816/18, completing a short-term base and turning the core bias of analysts at Credit Suisse back higher. 

“AUD/USD surged higher on Friday, breaking above resistance at the range top at 07814/18 to turn our core bias higher again, in line with the re-accelerating daily MACD momentum. The pair has also broken above the next resistance at the 0.7838/49, which triggers an irregular basing structure, with the next levels at 0.7900/05, then the 0.8000/07 high.” 

“We expect the 0.8000/07 high to prove a tough barrier once again, however, with the core medium-term uptrend still intact and reasserting itself, we now expect a break in due course, which would open up an eventual move to the 2018 highs at 0.8126/36.” 

CAD strengthened against most of its major rivals in the European session on Monday as crude oil prices surged after reports that Colonial Pipeline, the U.S. pipeline operator that transports nearly half of the East Coast’s supplies of diesel, gasoline and jet fuel, halted its operations on Friday night because of a cyberattack.

On Monday, the company said that most of its network continued to be shut and told shippers that it would “bring our full system back online only when we believe it is safe to do so, and in full compliance with the approval of all federal regulations”. According to New York Times, the shutdown could last days.  The U.S. government issued emergency legislation on Sunday, relaxing rules on the fuel being transported by road.

WTI crude futures for June delivery jumped by 0.88% to $65.47 per barrel, while Brent futures for July surged 1.00% to $68.96 per barrel.

The Canadian dollar is heavily dependent on the dynamics of the price of crude oil, one of Canada's key exports.

FXStreet notes that after having been among the best performers during the earlier stages of the pandemic, emerging market (EM) Asian equities have taken a bit of a breather this year. Economists at Capital Economics don’t think stock markets in emerging Asia will come roaring back to life any time soon and forecast relatively small increases in equity indices there over the next few years.

“We think the rotation trade has more room to run. As economies continue to reopen and investors increasingly factor in a return to normal, we think IT stocks, in particular, will continue to perform relatively poorly.”

“While demand for semiconductors may support earnings for a while, we suspect any further boosts to equity indices from this will be relatively small. Significant growth in earnings in the sector now already appears to be discounted. Additionally, the shortage of semiconductors has led the US, and others, to attempt to boost domestic production, which could eventually eat into the earnings of East Asian producers. And finally, many companies in the region use semiconductors as an input, the rise in prices of which has put upward pressure on their costs, and therefore limited any boost to the overall market.”

“We forecast growth in China to be weaker than most expect over the next couple of years. And China’s stock market also faces risks, in our view, from financial decoupling with the US, the country’s continuing anti-trust push, and the move by authorities to reduce implicit government guarantees in China’s credit markets.”

“We forecast the MSCI EM Asia Index to finish this year at 1,225, not too far from its current level of ~1,170. And we project similarly small gains over the following couple of years as well.”

FXStreet reports that USD/CHF closed the week below the 200-day average at 0.9084 after a sharp fall on Friday – which turns the bias of analysts at Credit Suisse to the downside, with next support at 0.8910. 

“The broader downtrend is resuming and we turn our bias to the downside, with the next levels at 0.9000/8995, which is stalling the market this morning, then 0.8922/11, before 0.8871/62, which is an important price low.” 

“With daily MACD accelerating lower and weekly MACD crossing back below MACDA, we would not even rule out a test of the 2021 low at 0.8757” 

“Resistance now moves to the 200-day average at 0.9084/9102."

FXStreet reports that according to UOB Group’s FX Strategists, the likeliness of a short-term top in USD/JPY seems to have picked up pace as of late.

24-hour view: “Downward momentum has improved a tad and the bias for today is tilted to the downside. However, any weakness is likely limited to a test of 108.80. The strong support at 108.55 is unlikely to come under threat. Resistance is at 109.30 followed by 109.45.”

Next 1-3 weeks: “In our narrative from Tuesday (04 May, spot at 109.10), we indicated that ‘there is scope for the current USD strength to extend to 109.95’. We added, ‘the prospect for such a move is not high for now’. Since then, USD has not been able to make any headway on the upside. Shorter-term momentum is beginning to shift to the downside and the risk of a short-term top has increased. However, only a break of 108.55 (no change in ‘strong support’ level) would indicate that the positive phase that started late last week has ended.

FXStreet reports that EUR/USD last week saw a strong recovery off the 1.1994/89 band of support (mid March highs and the 22nd April low). In the view of Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, the pair is set to retest the 1.2243 February high.

“We suspect that the correction is over and look for the market to re-test 1.2210/43, the 78.6% retracement of the move seen this year and the February high and then 1.2349, the 2021 high.”

“Dips should be contained by the 55-day ma at 1.1965 and the 200-day ma at 1.1950."

FXStreet notes that the shockingly disappointing US Nonfarm Payroll numbers last Friday firmly sent gold trading above $1800/oz for the second straight session. The next target on the upside aligns at $1,850, economists at OCBC Bank appraise.

“The $1800 handle now appears to be the new support level for gold and we expect buying interest for gold in the short term on the back of the poor labour market report from the US.”

“Such is the shock from the NFP report that we think gold may find buying demand in the short term.”

“Resistance expected at $1850/oz, which is the 200-DMA.” 

Reuters reports that Finnish central bank chief Olli Rehn told that the European Central Bank should follow the U.S. Fed by accepting an overshooting of its inflation target to make up for many years of sluggish price growth.

According to Rehn, changes in the eurozone labour market and world economy had weakened wage inflation pressures and meant "the economy can cope with lower levels of unemployment...without rapid inflation".

Rehn said that a focus on full or maximum employment makes sense in the current context of a lower natural rate of interest.

FXStreet reports that Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, discusses USD/JPY prospects.

“USD/JPY saw a fairly solid dive lower last week, but remained above the 2021 uptrend at 108.17 and while this holds we will continue to give the upside the benefit of the doubt. The 109.96 April 9 high remains the barrier to the 110.97 March high. Our medium term target is 112.23/50, which represents the April 2019 high, the 2020 high and a long term Fibonacci retracement.”

FXStreet reports that in the view of economists at MUFG Bank, risks of Scottish independence are too far in future to have lasting impact on sterling.

“The SNP missed out on a majority by one seat winning 64 seats which was one seat better than they achieved at the last election in 2016. The SNP will now have to govern with the support from the other pro-independence Green party who won 8 seats. Together the pro-independence parties won a comfortable majority.” 

“The SNP will likely remain reluctant to hold an illegal referendum without Westminster consent, while the UK’s government refusal to hold another referendum could see public support for independence rise further. The likelihood of a second referendum should increase but it is not yet certain to be held and the potential timing remains unclear. It would though likely take at least a year at the earliest to pass legislation and hold a referendum.”

“With independence risk so far in the future, we do not expect the developments to materially alter our outlook for the pound to continue to trade at stronger levels this year supported by the robust UK cyclical recovery and vastly diminished Brexit risks.”

According to the report from Sentix, the economic situation in the Eurozone continues to improve. The sentix situation index rises for the third time in a row to 6.3 points (highest level since May 2019). The overall index (21.0) reaches its highest value since March 2018, meaning that the recession caused by the Corona crisis has been overcome. In Euroland, expectations even rise slightly to +36.8 points, an all-time high! This is very unusual and underlines that the very expansive monetary and fiscal policy that has been in place for a year has not failed to have an effect on the real economy. But where there is light, there is also shadow. There are increasing signs that the economy is being overstimulated. This is evident in individual sectors that report shortages of materials. However, the strong global economy is having an even stronger impact on commodity prices and thus on inflation.

The extent to which investors are concerned about rising inflation is reflected in the sentix thematic barometer for the bond market. The inflation sub-index falls to -45.25 points in May, also an all-time low. The inflation rates, which already surprised negatively in April, are thus likely to continue to rise significantly. This not only puts pressure on the bond markets, but is also likely to have an impact on central banks. Investors expect a signal soon that the current strong expansion of liquidity will be curbed. The sub-index central bank policy reacts significantly from +13.75 to -0.75 points. The period of strongly supportive central bank policy is thus coming to an end, which should also have an impact on the development of the risk markets.

CNBC reports that the U.K. Prime Minister Boris Johnson is expected to announce on Monday that the government will push ahead with the next stage of lifting lockdown in England, but a renewed bid for an independence vote in Scotland threatens to overshadow Westminster in the weeks and months ahead.

Johnson’s Cabinet is expected to sign off on Monday the further relaxing of lockdown measures from May 17, when international travel can resume in most circumstances although quarantines and testing will be required on return to the U.K., for the most part.

Ministers will meet on Monday morning to agree on the next steps, the BBC reported Monday. Johnson is expected to say the data supports a further relaxation of measures and the public could be advised on whether more close personal contact with friends and family, such as hugging, is allowed, the broadcaster added.

The expected announcement on a further lifting of lockdown comes at a time when a political storm is brewing north of the border after Scotland’s First Minister Nicola Sturgeon vowed on Saturday to press ahead with plans for a new referendum on independence from the U.K.

Reuters reports that ECB Chief Economist Philip Lane told that the European Central Bank could still increase bond purchases at its June meeting if such a move is needed to keep borrowing conditions favourable.

He also said unemployment is not expected to return to its pre-pandemic level before 2023, a long process that will require a "sustained effort" from both the ECB and governments.

"We can increase or decrease our purchases depending on what is necessary to keep financing conditions favourable. Our overall commitment is to maintain favourable financing conditions," Lane told.

Lane's comments suggest the decision remains open as the recovery is coming later than policymakers had hoped and the bloc's economy still needs another year to grow back to its pre-crisis size.

According to the report from Halifax Bank of Scotland, on a monthly basis, house prices in April were 1.4% higher than in March. In the latest quarter (February to April) house prices were 0.9% higher than in the preceding three months (November to January). House prices were 8.2% higher than in April 2020.

Russell Galley, Managing Director, Halifax, said: “House prices in April eclipsed the record high set the month before as the market continued to maintain its recent momentum. The average property is now worth £258,204, up 1.4% month on month and 8.2% annually, the highest annual growth rate in 5 years. In cash terms, almost £20,000 has been added to the value of the average home since the market had essentially come to a standstill in April 2020. The stamp duty holiday continues to add impetus to an extremely active market, magnifying the current shortage of available homes as buyers aim to take advantage of the Government scheme. The influence of the stamp duty holiday will fade gradually over the coming months as it’s tapered out but low stock levels, low interest rates and continued demand is likely to continue to underpin prices in the market. However, we do expect recent levels of activity to be sustained over the short-term as buyers continue to search for homes with more space and potentially better suited for their new working patterns".

The dollar fell to a more than two-month low against its major currencies on Monday after a disappointing US employment report prompted investors to moderate expectations of higher interest rates, and now the focus is on inflation data this week.

Last month, the United States created just over a quarter of jobs and the unemployment rate unexpectedly rose, adding fuel to speculation runaway inflation.

The dollar index, which measures the greenback against six rivals, was at 90.20 after falling to 90.128 for the first time since February 26 at the start of the session.

The British pound posted the biggest gain among the most traded currencies, rising 0.65% to its highest level since February 25, despite the Scottish leader saying a second independence referendum was inevitable after her party's resounding election victory.

"The unexpected slow recovery in the US labor market reinforces the FOMC's patient approach to monetary policy, while the improving global economic outlook is putting medium-term pressure on the US dollar, " Commonwealth Bank of Australia strategist Kim Mundy said.

Even before the big payrolls miss, Fed Chair Jerome Powell had argued the US labor market is far from what it takes to start talking about reducing asset purchases and that the short-term spike in inflation will be temporary. Several Fed officials will have a chance to confirm that message this week, starting with Governor Lael Brainard on Tuesday. On Wednesday, the April consumer price index will be published.

FXStreet reports that economists at ING expect the NZD/USD to extend its rise and move into the 0.73 neighbourhood.

“Markets are inevitably starting to question how long the Reserve Bank of New Zealand will be able to stick to its dovish tone given the data improvement. Calendar in New Zealand is very light, with some focus only on Finance Minister Robertson’s pre-budget speech (the budget will be announced on 20 May) and some housing data. The latter are set to be increasingly monitored after April’s house data showed that the Government’s measures to curb the housing bubble have not had the desired effect yet. NZD/USD should move back above the late April highs, and possibly advance into the 0.73 region.”

Reuters reports that Fitch Ratings said that relief measures announced by India's central bank last week to help lenders and borrowers during the new devastating wave of COVID-19 infections will only delay the stress for financial institutions.

The Reserve Bank of India (RBI) rolled out last Wednesday a slew of measures including a loan restructuring scheme to help lenders tide over mounting bad loans and give some borrowers more time for debt repayment.

Fitch said these measures would provide some relief to financial institutions over the next 12-24 months but at the expense of delaying the recognition and resolution of underlying asset-quality problems.

The central bank may unveil more measures to support the financial sector, like credit guarantee schemes or a blanket moratorium, if indications of economic stress mount, the ratings agency said.

Last week, S&P Global Ratings said its outlook on India's sovereign debt remained stable, even though surging cases could threaten the economic recovery it had seen so far.

Bloomberg reports that the pound gained by 0.6% against the dollar after Prime Minister Boris Johnson emerged stronger from local U.K. elections, while the main party pushing for independence in Scotland failed to win an outright majority.

The U.K. prime minister had gone into the elections on the back foot, but emerged stronger after his party tightened their grip in northern England. While the Scottish National Party wants to press for another referendum on independence, it fell one seat short of an outright majority after the election.

“Calls for an independence referendum certainly won’t go away, but the FX market doesn’t seem to be reading the election outcome as heralding fresh immediate political risks for the pound,” said Richard Franulovich, head of foreign-exchange strategy at Westpac Banking Corp. in Sydney.

RTTNews reports that survey results from National Australia Bank showed that Australia's business conditions and confidence reached record levels in April.

The business conditions index rose to a fresh record high of 32 in April from 24 in March. Trading conditions rose 5 points to +40 in April, profitability was up 8 points to +33, and employment rose 7 points to +22 index points. Each component was the highest on record.

The business confidence also set a new record high of 26 points versus 17 in the previous month, indicating that conditions will remain strong in the near term.

Confidence improved in all industries, led by a pickup in retail. In trend terms, mining, construction and finance, business and property were most optimistic, while retail and wholesale were the least confident - but still healthy, the survey showed.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2298 (1656)

$1.2241 (2345)

$1.2205 (691)

Price at time of writing this review: $1.2155

Support levels (open interest**, contracts):

$1.2083 (75)

$1.2019 (2418)

$1.1937 (2006)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date June, 4 is 54154 contracts (according to data from May, 7) with the maximum number of contracts with strike price $1,2200 (3169);

GBP/USD

$1.4134 (2762)

$1.4096 (843)

$1.4062 (1022)

Price at time of writing this review: $1.4047

Support levels (open interest**, contracts):

$1.3783 (198)

$1.3726 (602)

$1.3655 (853)

Comments:

- Overall open interest on the CALL options with the expiration date June, 4 is 20708 contracts, with the maximum number of contracts with strike price $1,4100 (2762);

- Overall open interest on the PUT options with the expiration date June, 4 is 16283 contracts, with the maximum number of contracts with strike price $1,3100 (3731);

- The ratio of PUT/CALL was 0.79 versus 1.69 from the previous trading day according to data from May, 7

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.