Daily Market Analysis

Market Focus

US equities swung back and forth, the three big indices closed the last trading day with little gains. Treasury Secretary Janet Yellen emphasized the need for more supportive fiscal stimulus to help recover global economy during her first call with the G-7 group. She also suggested expanding the International Monetary Fund’s resource to help developing nations.

US consumer sentiment unexpectedly dropped from 79 to 76.2, refreshing the six-month low. Personal income deteriorated as Americans expect faster inflation in 2021 and 2022. Elevated unemployment figures, restricted social activity, and a slow vaccination process are destabilizing consumers confidence on future outlook.

The Fed releases its monetary policy report on Friday, it detailed its 2021 testing scenarios while stating the central banks does not yet plan to remove restrictions that has imposed on banks’ dividend payment amid the coronavirus pandemic. In its latest stress tests, the Fed is examining whether banks could keep lending if unemployment rose more than 4% to nearly 11%, and stock lost more than half of their value and commercial real estate valuations declined by 40%. The test results usually determine how much of a bank’s excess cash can be returned to investors through stock buybacks and dividend. Results for this new round of tests will come out by June 30

European Commission President Ursula von der Leyen admitted that the commission underestimated issues that led to inefficient vaccine manufacturing process, thus dragging the vaccination rollout program. Meanwhile, she expects further distribution of the vaccines to smooth out, adding that the time in the regulatory process to approve vaccines could still be reduced.

Market Wrap

Main Pairs Movement

The US greenback initially enjoyed a north ride until disappointing Michigan Consumer Sentiment put a dent in this uptrend, the dollar index is currently trading at 90.44, up little 0.03%. Meanwhile, the US 10-year treasury yield continues to rise in the backdrop, refreshing highs at 1.207%. The Yen is particularly vulnerable under surging US yield, it has depreciated 1.6% against the US dollar since January. Adding salt to the wound, the BoJ signaled to cut interest rate further if necessary, weighing down on the safe-haven currency.

Aussie was the second-best performing G-10 currency on Friday, gained 0.1%, just trailing behind the Sterling. The antipodean pair continues to derive support from upward trending commodities, iron ore, and other industrial metals price. Australian Finance Minister also expressed his optimism earlier this week, which underpins the growth of Australian dollar.

Strong fundamentals continues to bolster the Pound, surged 0.31% on Friday. The UK has now vaccinated over 14M people and continues to extend its lead in terms of percentage of its adult population vaccinated compare to other developed countries. GDP data also proven to be supportive of the current bullish bias, UK’s fourth quarter GDP (MoM) increased by 1%, beating anticipated 0.5%. Its December manufacturing production is slightly sluggish, printed 0.3% compares to previous 1.1%, and missed expectation of 0.6%.

Technical Analysis:

EURUSD (Daily Chart)

Euro dollar fell more than 40 pips prior to US market opens, downbeat consumer sentiment brought disruption to the pair’s downward movement, recovered most of its loss of day. The pair is still sitting comfortable above 1.206 support, and is clinging to the short term descending trendline. The yellow upward trendline has previously proven itself to be worthy for defending, now the bulls are in charge of another attack. However, there have been several layers of defense line set up by the bears, the first being the blue descending trendline, next to horizontal resistance of 1.2173, then the January’s high of 1.2333. Adding one more rejection from the descending trendline could largely increase the chance of further retreat. On the south, near support sits around 1.206, followed 1.193.

Resistance: 1.2173, 1.2333

Support: 1.206, 1.193

GBPUSD (Weekly Chart)

Cable is well placed in an upward trending tunnel since last April, and has managed to stand above 1.38 hurdle dated back to March 2018. The surge from the Sterling has been remarkable, gained nearly 15% against the US greenback since last May. We maintain our bullish bias on this pair given its strong fundamental, and most of the previous Brexit negativity have been removed from the market. However, it seems like Cable is running ahead of itself as RSI of 67.4 indicates the bulls are not far from overheating. A pullback toward 1.338 could definitely be healthy for a longer-term bullish run.

Resistance: 1.416, 1.4625

Support: 1.38, 1.338, 1.2769

XAUUSD (Daily Chart)

Gold was previously stuck within previous support band between $1838 and $1823, and it failed to stand on top of previous neckline, which speculators usually perceive as a strong sell signal. Now that price slips below $1823, it opens door for sellers to explore further downside space. Bearish momentum could accelerate from here since not much technical supports or resistances were established between $1823 and $1765. It seems like MACD on the daily chart changes its tone from a bullish reversal to continuation of bearish trend.

Resistance: 1823, 1872, 1930

Support: 1765, 1691

Economic Data

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Daily Market Analysis

Market Focus

US equities declined as technology stocks were leading the retreat, the Nasdaq Index dipped 0.52%. Twitter Inc. and Lyft Inc. turned up again the tide, Twitter Inc. surged after reporting a jump in revenue, meanwhile Lyft Inc. co-founder said the company will absolutely turn a quarterly profit this year.

The Senate approved to proceed with former President Donald Trumps’ second impeachment trial. Trump was impeached by the House on a single article accusing him of incitement of an insurrection by provoking the mob that stormed the US Capitol last month.

Across the Atlantic, German Chancellor Angela Merkel is set to announce an extension of lockdown until March 14 amid new virus strain emergence. Current restriction is set expire on Feb.14, but some fears the new contagious variants of coronavirus could hamper the already slow vaccination rollouts. The longer vaccination rollouts take, the more prolonged the economic damage of lockdowns are expected to be. Germany’s economy contracted by 5% in 2020, according to full-year GDP data released in January.

BoC Deputy Governor Time Lane called the soaring price in cryptocurrency as purely speculative mania, and said such assets don’t have the qualities to become the money of the future. He opposes Tesla’s plan to use Bitcoin as a method of payment in the future, said costly verification methods and unstable purchasing power makes cryptocurrencies like Bitcoin a “flawed” method of payment.

Market Wrap

Main Pairs Movement

Euro-dollar pared half of its gain, closed the day up 0.1%, after ECB President Christine Lagarde said it will be a while before the central bank needs to deal with unwanted inflation, and that the euro region needs fiscal support at least through the end of the year. Weak US inflation figure also helped non-US currencies to climb on Wednesday, January core inflation fell 0.1% from previous month. US 10-year treasury yield also dropped 2.6bps to 1.135% after having topped 2% on Monday. Gold once hit $1855, the highest price in two weeks, but failed to capitalize its gain, closed the day around $1843.

Traditional safe-haven currencies like the Japanese Yen and Swiss Franc performed differently against the US greenback, Yen dipped 0.07% while Franc gained 0.27%. BoJ officials are considering ways to communicate that the bank can cut its interest rate further in the negative territory if needed while considering the side effect of such move.

Cable climbed to the highest level since April 2018, rallied 0.23% on Wednesday. The British Sterling was underpinned by BoE Governor Andrew Bailey’s speech, who said it’s not in the UK’s interest to dramatically ease banking rules following Brexit.

The antipodean pairs underperformed in the G-10 space; Aussie dollar dropped 0.14% whilst Kiwi retreated 0.4%. The decline is probably attributed to thin liquidity ahead of Chinese New Year holiday, rather than a fundamental one.

Technical Analysis:

EURUSD (Daily Chart)

Euro dollar has managed to reclaim 1.206 support, and is currently kissing the short term descending trendline. The yellow upward trendline has previously proven itself to be worthy for defending, now the bulls are in charge of another attack. However, there have been several layers of defense line set up the bears, the first being the blue descending trendline, next to horizontal resistance of 1.2173, then the January’s high of 1.2333. On the south, near support sits around 1.206, followed 1.193. MACD on the daily chart is printing a bullish reversal picture. However, it would be prudent to wait for a clear breakout as neither side has the dominance over the other.

Resistance: 1.2173, 1.2333

Support: 1.206, 1.193

GBPUSD (Weekly Chart)

Cable is well placed in an upward trending tunnel since last April, this pair continues to gain traction as BoE Bailey lifted concerns of negative interest rate. It came on top of 1.38 hurdle from March 2018, but we still have two more trading days to confirm whether if it can firmly stand above this level. It is hardly any surprises to see the Pound clinging to the Bollinger upper band in the longer term since it was severely subdued from Brexit shock. However, a retreat from here seems plausible since weekly RSI figure is one step away from overheating, currently hovers around 67.

Resistance: 1.416, 1.4625

Support: 1.38, 1.338, 1.2769

AUDUSD (Daily Chart)

Aussie dollar was unable to complete the breakout of the descending trendline given the lack of trading volume ahead of Chinese New Year holiday. Nonetheless, the bulls are here to stay amid resurgence of the reflation narrative, which should bolster commodity linked Aussie and Kiwi throughout 2021. This pair spent the last month consolidating after a huge ramp up in late 2020, and now investors are waiting for a fresh impetus to move forward. That being said, approval on Biden’s $1.9 trillion stimulus package should give risky currencies a big boost. But investors should always keep an eye on US yield curve since rising yields will hinder non-US currencies strength. MACD on the daily chart is undergoing a bullish reversal.

Resistance: 0.78, 0.7982

Support: 0.758, 0.7414

Economic Data

Daily Market Analysis

Market Focus

US stocks halted a six-day winning streak as investors debated whether commitments by the Federal Reserve and the Biden administration to let the economy run hot will spark destabilizing inflation. The S&P 500 Index edged lower from an all-time high after a 5.4% surge this month fueled by signs the Biden administration intends to pass a sizable aid bill while the central bank promises to keep rates pinned near zero. The Nas100 eked out a gain, while small caps notched the longest rally since Dec 2019. Treasuries advanced and the dollar fell for a third straight session.

Stretched valuations are giving investors pause as they cheer advancing vaccination efforts, rising stimulus prospects and a slowdown in coronavirus infections across the globe. With inflation expectations near the highest since 2013, questions have also begun to be raised about when the so-called reflation trade in bonds could start to threaten equities.

According to Saira Malik, Nuveen head of global equities, “We are getting to the point where we have to start worrying about the risk of how we pull back on that stimulus, will it cause the economy to overheat, are these valuations becoming too expensive. That is something we are going to be grappling with as the year goes on.”

Elsewhere, Brent oil hovered around $60 a barrel on signs the global market is tightening, and demand is improving. Bitcoin pared an earlier jump to a record after Tesla Inc. bought $1.5 billion of the cryptocurrency.

Market Wrap

Main Pairs Movement

GBPUSD advances towards 1.3800, sitting at the highest levels since April 2018 ahead of the London open. The Cable rises as broad US dollar weakness supersedes uncertainty over Brexit and the UK Covid vaccine news.

Retreating US Treasury yields weigh on the American currency. The macroeconomic calendar will remain scarce, having no impact on currencies. USDJPY is in a corrective decline, the bearish trend could gain momentum.

The USDCAD pair climbed to a daily high of 1.2766 in the early trading hours of the American session but reversed its course amid broad selling pressure surrounding the greenback.

DXY accelerates the downside and navigates multi-day lows in the 90.50 zone on turnaround Tuesday. WTI has reversed earlier decline to as low as the $57.25 per barrel to trade back above the $58.00 level and is back in the green, setting the crude oil contract up for a seventh day of successive gains.

Technical Analysis:

EURUSD (Four-hour Chart)

The EURUSD extends its Monday gains and posts another bullish day on Tuesday, at the moment of writing, the Fiber pair is flirting with the 1.2120 resistance. Given that there is no specific theme or story affecting the EUR on the day, the major driver that boosted the EURUSD is the weakening USD. Technically speaking, as the 15-Day SMAVG is staging a golden cross with the 60-Day SMAVG, it is reasonable to assume that the EURUSD is going to extend its bullish momentum. This bullish trend is also supported by the MACD histogram. Nevertheless, given that the RSI has now reached the overbought region, a downward correction might prevent the pair from further advancing.

Resistance: 1.2120, 1.2145, 1.2163

Support: 1.2078, 1.2060, 1.2017

AUDUSD (Four-hour Chart)

The Aussie is posting its three consecutive day win on Tuesday, but is currently struggling to extend above the 0.7736 resistance zone. The board-based greenback weakness drives Aussie’s Tuesday gains. Given that the Australia Business Confidence index rose to 10 from 4 and that the NAB’s capacity utilization rose to 81.0% in January, those positive numbers also gave some lift for the pair’s recent rise. From a technical perspective, the Aussie’s surge is supported by the 15-Day SMAVG and MACD histogram. However, with the 69 RSI, it is likely that the Aussie might not find acceptance above the most immediate resistance at 0.7736. A break above the 0.7736 zone could open the door for an acceleration of the recent appreciation.

Resistance: 0.7736, 0.7766, 0.7798

Support: 0.7703, 0.7678, 0.7642

XAUUSD (Four-hour Chart)

The gold traders experienced a roller-coaster type of day on Tuesday. After breaking key resistance levels at $1840 in the later European session, the yellow metal has now retreated back to $1837. Despite the broad-based USD weakness, the failure to find a further acceptance above the $1846 zone still weighed down on the precious metal extensively. The market’s undecisive sentiment on the greenback would continue to play a significant part in XAUUSD price action. From a technical perspective, the gold is still under bearish pressure. However, the 50s RSI is suggesting that the pair still has some room to extend Tuesday’s positive traction. On the upside, the yellow metal must first move above $1846 to reclaim its $1850 territory. On the flipside, the most immediate cushion for the pair can be found at $1829 and $1818.

Resistance: 1846, 1856, 1864

Support: 1829, 1818

Economic Data

Daily Market Analysis

Market Focus

US equity market is refreshing highs on brightening prospects for a robust stimulus package. The S&P 500 Index once hit 3900 after Treasury Secretary Janet Yellen said the US can return to full employment in 2020 with a robust federal paycheck. Meanwhile, Dow Jones Industrial Index extended its rally to six days, also breaking record high of 31263 points. House Democrats released its first draft for the relief bill on Monday. The first committee vote on elements of Biden’s $1.9 trillion relief package begin on Tuesday.

Coronavirus infections continued to slow as countries are pushing for their vaccine rollouts across the globe, more than 131 million shots were given worldwide. There appears to be another virus mutation in South Africa, patients suffers mild symptom from the new variant. AstraZeneca Plc said they are working on a new shot to combat the South African strain.

Bitcoin gained huge traction and soared to $44860 on Monday as Tesla announced they invested $1.5 billion in the leading cryptocurrency. More importantly, it also said that it will accept Bitcoin as a form of payment in the future.

Market Wrap

Main Pairs Movement

Euro-dollar is little motivated at the start of the week, closed the day up 0.05%. The US greenback was on the back foot against most of its G-10 peers, the dollar index slipped 0.11%. US 10-year treasury yield once hit 1.2%, its highest levels since March 2020.

Gold extended its recovery after investors dumped 2.2% last Thursday, rallied 0.92% near market close. Last week’s plunging has prompted some dip-buying around $1806. Surging copper price also help the precious metal to regain some ground, copper’s future spiked 3.34% in the past two trading days.

Cable pared all of its loss after North America session started price was essentially unfazed. Denial of the negative interest rate from BoE continues to underpin the Sterling. It also benefited from successful vaccination rollout program compare to other developed nation. So far, the country has vaccinated 17% of its population, nearly doubling the US figure.

The Canadian dollar gained 0.18% against the US dollar amid rebounding oil price, the Brent oil advanced above $60 a barrel for the first time in more than a year.

Aussie and Kiwi were the best performers in the G-10 space, rallied 0.31% and 0.35% respectively. The antipodean currencies were supported by renewed risk appetite and rising commodity prices. Iron Ore futures have spiked 5.2% in the past four trading days. Meanwhile, Bloomberg commodity index climbed to highest level since December 2018.

Technical Analysis:

GBPUSD (Daily Chart)

Cable is running into a stubborn resistance around 1.376, which it has failed to conquer in the last three weeks. The pair may struggle to find demand amid recovering US dollar. Intersection between the long term ascending trendline and horizontal support line at 1.352 looks like a good place to retreat if the bulls run out of steam. On the upside, UK’s leading vaccine rollouts could probably lend some strengths to the Pound to break the immediate resistance. Some follow through buying power will push price to 1.3807, highest price not seen since April 2018.

Resistance: 1.376, 1.3087

Support: 1.352, 1.322

EURUSD (Daily Chart)

Euro-dollar bounced upon touching the yellow ascending trendline, but failed to overcome previous resistance of 1.206. It will be interesting to see how price could maneuver in such narrow range. If bidders could manage to regain 1.206, then this pair will find itself back into the bullish trend. However, failed to defend the upward trendline will open doors for wide downside space, which has not been touched since last November. MACD on the daily chart favors the bears, which in turn boost possibilities for a bearish run.

Zooming out to the monthly chart, a retreat towards 23.6% Fibonacci at 1.167 looks quite plausible. Such healthy retreat could be beneficial to long-term bidders as more money printing from the Biden’s administration will continue to favor the so-called reflation trades in 2021.

Resistance: 1.2803, 1.2835, 1.2873

Support: 1.2765, 1.2741, 1.2714

XAUUSD (Daily Chart)

Gold preciously formed a double-top pattern on the daily chart, which usually points to bearish trend. Price has successfully breached the support band between $1839 and $ 1823, but did not quite reach 50% Fibonacci level of $1765. Then some dip buying drives price back to test whether the neck-line resistance is valid. It is currently trapped inside the support band, but judging from Monday’s trading, it’s highly likely this resistance level could block further north move. On the downside, sellers will be eyeing aforementioned $1765 horizontal support. MACD on the daily chart continues to underpin a sustainable bearish trend.

Resistance: 1839, 1872, 1930

Support: 1823, 1765

Economic Data

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Daily Market Analysis

Market Focus

Stocks extended their weekly rally after weaker-than-forecast US jobs data bolstered the case for President Joe Biden’s $1.9 trillion coronavirus relief package. The dollar fell.

The House adopted the budget resolution that cleared the Senate early Friday, paving the way to pass a stimulus bill with only Democratic votes. The S&P 500 climbed to another record in its best week since Nov as every major group, but technology rose. The surge in GameStop Corp. after Robinhood Markets Inc. removed limits on buying the stock did little to repair the videogame retailer’s weekly plunge of 80%. Two-year Treasury note yields matched an all-time low amid a drop across shorter-dated rates.

The recovery in the U.S. labor market disappointed for a second month as modest job growth highlighted the persistently difficult prospects for millions of unemployed Americans. Nonfarm payrolls increased by just 49,000 after a downwardly revised 227,000 Dec decline. President Biden gave the strongest indication yet he’ll push for stimulus without Republican support, saying Friday’s weak economic data show the risk of doing “too little”.

In corporate news, Pinterest Inc. surged as the digital scrapbooking and search company reported sales that topped estimates. In the meantime, Peloton Interactive Inc. sank after saying it can’t keep up with surging demand for its exercise machines and warning that profit will be squeezed.

Market Wrap

Main Pairs Movement

EURUSD is trading around 1.20, up from the lows after the US reported an increase of only 49,000 jobs in January, worse than expected. Investors are eyeing stimulus news from Washington.

USDJPY ran into a widely tracked technical resistance on Friday. The pair tested the 200-Day SMAVG for the first time since June 2020. The SMA located at 105.59 was breached with a move to 105.64, however, the breakout was short-lived.

The AUDUSD is having on Friday the best day in weeks boosted by a broad-based slide of the US dollar and also on the back of a recovery of the aussie. The pair is about to end the week hovering above 0.7665, at the highest level in a week.

It’s been a rough end to what would otherwise have been an excellent week for the US dollar. After soft NFP data, the DXY has fallen all the way back to the key 91.00 level.

WTI is having a strong finish to the week, having rallied as high as $57.00 on Friday. Higher stock prices, US bond yields, and a lower US dollar are all providing tailwinds to the crude oil complex.

Technical Analysis:

GBPUSD (Four-hour Chart)

GBPUSD advances above the 1.3700 price zone and is trading comfortably around 1.3730 at the time of writing. Given that the US economy only gained 49K new jobs, which is below the market expectation, this Non-Farm Payrolls reading undermines the demand for the greenback and gives a boost to the GBPUSD bulls. From a technical perspective, a bearish pressure continues to be supported by the 60-Day SMAVG, but with the recent advances of the Cable pair, a golden-cross is staging. Consider the BoE has dished out hawkish signals on Thursday and the continuation on vaccine rollouts, the bullish trend of GBP is likely to extend. Not to mention the fact that the RSI is currently hovering around 60, indicating there is still room for the pair to advance. If the Cable can find acceptance above the 1.3740 resistance, the next resistance can be seen around 1.3760. On the flip side, if the Cable reverses its ongoing upward momentum, the most immediate cushion is 1.3657, then 1.3606, followed by 1.3568.

Resistance: 1.3740, 1.3761

Support: 1.3657, 1.3606, 1.3568

USDCAD (Four-hour Chart)

After successfully breaking the 3-month bearish trend on 1/27, the Loonie pair has been trading between in a confined range within 1.2835 and 1.2765.

On the last day of the week, the Loonie dipped low despite a disappointing Canadian labour market data as the strength in crude oil and the worse-than-expected US labour data supported the CAD and reversed the bullish trend of the pair, which subsequently pulled the pair back down to around 1.2765 at the time of writing. Technically speaking, the 15-Day SMAVG is supporting the USDCAD, but the 40s RSI is suggesting the market is currently tilted to the seller’s side. If the Loonie can break below 1.2765, the next cushion would be 1.2741 and 1.2714. Conversely, when the pair resumes its bullish run, the buyers must find acceptance above 1.2803 before further advancing towards 1.2835.

Resistance: 1.2803, 1.2835, 1.2873

Support: 1.2765, 1.2741, 1.2714

XAUUSD (Four-hour Chart)

Bouncing back from the three-consecutive day loss, the yellow metal finally regained some upward momentum on Friday, reclaiming $1812 at the time of writing. After the downbeat US labour data was released, the Gold regained some positive traction. However, if the precious metal fails to break above the $1812, the bearish pressure on XAUUSD could persist as indicated by both the MACD and 60-Day SMAVG. Looking ahead, the US Consumer Price Inflation numbers for Jan and a speech from Fed Chair Powell in the upcoming week are closely eyed. If the precious metal can find acceptance above $1812, the next resistance can be found at $1825 and $1834. On the flip side, if the bears outplay the bulls, the most immediate support is seen at $1789, then $1769.

Resistance: 1812, 1825, 1834

Support: 1789, 1769

Economic Data

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Daily Market Analysis

Market Focus

Stocks almost wiped out their advance as a drop in technology and retail shares dragged down the Nasdaq 100. Treasuries retreated. Oil climbed. The S&P500 closed with a small gain following its biggest two-day rally in almost three months. Energy and financial shares outpaced tech even after Google’s parent Alphabet Inc. hit a record on stellar results, while Amazon.com Inc. slumped. Banks climbed as JPMorgan Chase & Co. and Morgan Stanley issued bullish calls on the industry. GameStop Corp., the poster child for Redditors looking to squeeze short sellers, and movie-theater chain AMC Entertainment Holdings Inc. rebounded following Tuesday’s plunge. Drug-maker Biogen Inc. slumped after disappointing forecasts.

A widely watched segment of the Treasury yield curve reached its steepest level in almost five years even as the U.S. decided not to increase auction sizes for long-maturity notes and bonds at next week’s quarterly refunding sales. Data showed companies added more jobs than forecast in Jan, while growth at service providers accelerated.

According to Mike Loewengart, the managing director of investment strategy at E*Trade Financial Corp, “There has been a ton of noise in the stock market these past few weeks, so it’s encouraging to see solid economic reads. There may be signs of overextension when it comes to single stocks, but under the surface there is an economy regaining serious momentum.”

Market Wrap

Main Pairs Movement

JPY net long positions had dropped after their recent push to the highest levels since October 2016 which is transpired in the spot market following a breakout of the long-term bearish dynamic resistance.

Demand for the greenback receded, leaving room for the aussie to recover some ground. At the time of writing, AUDUSD trades around 0.7625, looks to snap three-day losing streak.

USDCAD has for the most part stayed below the 1.2800 level on Wednesday, with resistance in the form of the 50-Day moving average at 1.27967 also helping to keep the price action under wraps. Right now, USDCAD is trading in the 1.2760s and eyeing a test of Tuesday lows.

The US Dollar Index, which tracks the greenbaack vs. a bundle of its main competitors, recedes to the 90.15/10 band following earlier 2021 tops aorund 90.30.

WTI surged for a third straight day on Wednesday, rallying from around the $55.00 mark during early European trading hours to as high as the $56.30s in wake of the 14:00GMT crude oil pit open.

Technical Analysis:

EURUSD (Four-hour Chart)

EURUSD continues to dip low on Wednesday amid stronger greenback and better-than-expected US ISM PMI data. In the beginning of the day, the EURUSD traded in a tight range between 1.2050 and 1.2036, but tumbled to the daily low near the psychological support at 1.2000 in the American session. The renewed bearish pressure is largely initiated by the increasing demand for the greenback as the upbeat data published by Eurostat earlier in the day is mostly ignored by the market. From a technical perspective, the 60-Day SMAVG is supporting the current bearish trend of the Fiber. However, as both the RSI is approaching the 30-threshold and the price of EURUSD is closing near the 1.2000 support, it is inferable that a positive correction may be staged in the near future. On Thursday, Retail Sales data from the eurozone and US Initial Jobless Claims are closely monitored.

Resistance: 1.2049, 1.2093, 1.2131

Support: 1.2014, 1.1960, 1.1925.

GBPUSD (Four-hour Chart)

The Cable pair is trading modestly lower on the day after temporarily touching the high of 1.3684 in the early Euro session. The pullback of the GBPUSD was largely due to the two-consecutive day winning DXY, however, despite the better-than-expected US ISM and ADP data, the DXY did not seem to react much to those numbers. This is possibly because the UK data in the service sector is also indicating a strong, resilience comeback. On top of that, since the expected rate cut from the BoE is lifted, the pound is perceived to be relatively strong amid the strengthened greenback. Upcoming post-Brexit meeting are eyed. Technically speaking, the Cable is under a downward momentum, and would likely to remain bearish as the 40ish RSI indicates there are still room for the pair to move lower.

Resistance: 1.3681, 1.3711, 1.3761

Support: 1.3636, 1.3608, 1.3554

XAUUSD (Four-hour Chart)

For the second day in a row, the XAUUSD continues to struggle to find a direction between the close range within $1833 and $1842. Although U.S. President Biden is pushing to go big on the next stimulus package, but his decision only incentivizes a sell-off in bonds and does not help to boost the pricing of Gold. From a technical perspective, the XAUUSD remains under pressure as the 60-Day SMAVG is currently fluctuating above the 20-Day SMAVG. Additionally, if the XAUUSD is able to break below the multiply tested support at $1829, the RSI reading suggests the precious metal would dip further. On the flip side, if the XAUUSD reverses its downward trending pattern, the first resistance can be seen at $1842, then $1858, followed by $1875.

Resistance: 1842, 1858, 1875

Support: 1829, 1818, 1805

Economic Data

Daily Market Analysis

Market Focus

US equities gained traction on Tuesday, the three big indices each rallied nearly 2% amid corporate earnings seasons. Meanwhile, the Reddit frenzy has been cooled off, GameStop Corp. and AMC Entertainment Inc. tanked 56% and 40% respectively. The GameStop rout wiped out $27 billion market value as Redditors leave the party, however, the battle between retail investors and hedge funds may not be over.

The Senate will begin a process that will allow Democrats pass President Joe Biden’s $1.9 trillion proposal without Republican votes, Majority Leader Chuck Schumer said. Although the push to deliver relief package is urgently needed, but a single party vote could somewhat contradict President Biden’s calls for unity during his inauguration.

RBA kept interest rate unchanged at 0.1% on Tuesday, here are the key takeaways from its monetary statement:

Market Wrap

Main Pairs Movement

The US greenback recovered amid rising 10-year US treasury yield reclaim 1.1% on Tuesday. Safe-haven currencies like the Japanese Yen and Swiss Franc were on the defensive as investors are reviving carry trades, both down 0.1% against the dollar.

Gold is falling in sync with significant pullback in silver markets, gold dropped 1.21%. After a sudden surge in retail investor demand for the silver metal subsides, silver price ramped up nearly 19%, refreshing 8 years record high. CME immediately followed to hike margin requirement for silver futures, a move that is said to take some of the froth out of the market. Soon, Redditors realized they are picking the wrong bully, as a result silver price dumped 8% on Tuesday.

Euro-dollar declined 0.2%, to the lowest level since Dec. 1, 2020. The shared currency lagged behind as the EU vaccination program slowly takes place across regions. On the data front, fourth-quarter GDP from the EU Zone declined 5.1% on a year-to-year basis, missing expectation of -4.3%, putting further pressure on the Euro.

The Cable was essentially unfazed at 1.3658. Scotland has extended its current lockdown into early March. The pandemic situation continues to ease in the UK with its government speeding up vaccine immunization. So far, the UK has administered nearly 10 million doses.

Kiwi outperformed its peer Aussie, AUDNZD slipped 0.33%. The Aussie failed to bounce upon RBA’s optimism towards its economic recovery. Falling iron ore prices are dragging down the commodity linked currency, market consensus on reflation trades seems to take a pause from here.

Technical Analysis:

EURUSD (Daily Chart)

Euro-dollar breached a critical support line at 1.206. This level has successfully defended seller’s attack in the last two months, but its strength looks faint this time. We cannot rule out the possibility of a false breakout, Tuesday’s session settled with a long lower and upper wick, which always indicates tentative trading. If the downward breakout is proven to be valid, then the bears will eye for 1.193 support. However, the longer-term ascending trend line is expected to persist as the general dollar weakness theme remains intact throughout 2021. On the upside, it would take a while for the bulls to build up power to march toward 1.233 resistance.

Resistance: 1.206, 1.2333

Support: 1.193, 1.163

USDJPY (Daily Chart)

USDJPY has overcame the long descending trend line that kept price subdued since last March. Bidders cheered the bullish reversal and ramped up 1.5% in the past 5 sessions. The bulls are now eyeing for the 38.2% Fibonacci retracement of 105.4, but given its previous strong rebound, upward momentum is exhausting prior reaching 105.4. Nonetheless, we expect price to at least touch this level within the near term before staging for a retreat. On the south, DMA100 could be supportive if the bulls lose steam. MACD on the daily chart is indicating a sustainable bullish trend.

Resistance: 105.42, 106.72

Support: 104.4, 103.84

XAUUSD (Daily Chart)

Gold is under pressure on Tuesday, slipping from $1865 to $1838, refreshing two-week lows. Despite breaking the ascending trendline from below, the precious metal is still able to find acceptance from $1839-$1822 support band. Weak dollar narrative has been changed recently attributed to rising treasury yield, it would be interesting to see how bidders will react to Gold’s declining price this time around. If they give up the defense line at $1822, then the bears will bring price down to $1765, last seen in November 2020. Conversely, we expect some rangebound trading between $1874 and $1838 if downward momentum looks unconvincing. MACD on the daily chart provide little to no sign of trading direction.

Resistance: 1874, 1930

Support: 1838, 1823, 1765

Economic Data