Weekend Market Wrap

Yesterday was a busy day as investors returned to the market following the May 1 Labor Day holiday. The Australian dollar is the most potent primary currency, up about 0.70 percent as of midday in Europe following the RBA’s larger-than-expected hike.

The Stoxx 600 in Europe is up about 0.6 percent. It gapped lower yesterday and has not entered the gap today. Futures in the United States are a little softer. The 10-year Treasury note broke through the 3% barrier yesterday and is just below it. European benchmark yields are mostly 1-3 basis points higher, but the UK Gilt yield has risen by eight.

New Zealand’s unemployment remained at a record low in the first three months of the year, stoking wage and inflation expectations and fueling an aggressive central bank tightening cycle. According to government data released Wednesday in Wellington, the unemployment rate remained at 3.2 percent, the lowest since records began in 1986 and in line with economists’ estimates. Whereas, Employment increased by 0.1 percent over the previous three months, while annual wage inflation rose to 3.1 percent, the fastest rate since 2008.

Here’s what you can expect from the market today.

The Data Agenda Today

On Wednesday, all eyes will be on the Federal Reserve, where Chairman Jerome Powell is expected to announce a 50-basis-point rate hike and additional details on how the Fed will unwind its USD 9 trillion balance sheet. During the global outbreak of Covid in 2020, monetary authorities took drastic measures to alleviate illiquidity concerns and strengthen the financial system’s functional integrity. However, because inflation is not “transitory,” officials have tightened their belts and pushed for aggressive tightening.

Economists anticipate that the US Fed will raise interest rates by another half-point in June, followed by smaller increases. However, if prices continue to rise – as Core PCE did last week, with a 5.2 percent increase over the previous year – it could spell trouble.

Furthermore, the US ADP employment statistics will also remain under the spotlight. Traders will be especially attentive at the end of the week for a key data point: non-farm payrolls. Economists predict that 390,000 jobs will be added in April, down from 431k in March. The US unemployment rate is expected to fall to 3.5 percent, from 3.6 percent in the previous month.

Forex Signal Update

Yesterday we opened two new signals as the market was on the move. However, volatility remained relatively low as traders from Muslim countries took the Eid ul Fitr holiday. We profited on GBP/USD and EUR/GBP because both signals hit take profit. Let’s take a quick look at the remaining signals’ technical outlook.

GBP/USD – Sell Signal

The GBPUSD pair completed forming a bearish pennant pattern, as we can see on the 4-hour chart. The GBP/USD broke its support line to get a negative motive that we are expecting to push the price to continue the decline on an intraday basis, reminding you that our next targets start at 1.2410 and extend to 1.2300.

As a result, we will continue to recommend a bearish trend supported by the EMA50 and conditioned by price stability below 1.2570. Today’s trading range is expected to be between 1.2400 support and 1.2570 resistance.

USD/CHF – Buy Signal

The USD/CHF pair has resumed positive trading and is currently trading at 0.9800. The bullish bias within the bullish channel visible on the chart is expected to continue as we head towards our next target of 0.9865.

The EMA50 supports the proposed bullish wave, which will be valid as long as the price remains above 0.9750. Today’s trading range is expected to be between 0.9750 support and 0.9865 resistance.

Cryptocurrency Update

Long on THORChain from $8.26

The current price of THORChain is $6.74, with a 24-hour trading volume of $118,574,396. THORChain has increased by 5.00% in the last 24 hours, and it currently ranks 43rd, with a live market cap of $2,229,190,411. It has a total circulating supply of 500,000,000 RUNE coins and a circulating supply of 330,688,061 RUNE coins.

Technically, the RUNE/USDT pair is trading in accordance with our cryptocurrency trading signal. The coin has violated the symmetrical triangle pattern recently, and now it’s heading towards the next target resistance level of $6.86. A slice through this level can lead THORChain towards the $7.20 level.

Keeping Our Terra LUNA Buy Signal As it Breaks Above Double Top

Terra LUNA is gaining traction as a result of the ongoing skew of positive fundamentals. Lyn Alden, a macro strategist, believes Terra’s (LUNA) recent Bitcoin buying spree could be the catalyst for a capitulation event for BTC and the rest of the crypto markets.

The Luna Foundation Guard (LFG), a non-profit organization created to support Terra, has been aggressively accumulating BTC to $1.63 billion over the last few months. According to Terra founder Do Kwon, the massive Bitcoin purchases are intended to support Terra’s native dollar-pegged stablecoin TerraUSD (UST).

LUNA/USDT is trading with a bullish bias, having broken through the triple top pattern at $85. The closing of candles above $85 is likely to support our buying signal, and the uptrend may continue until the next resistance level of $88 is reached. Today’s RSI and MACD are also in favor of a buying trend. As a result, we will maintain our long-term position until the market shows signs of reversal.