Technical Analytics Report

Morning Market Review 05 May 2021


Morning Market Review:



EUR shows a slight increase against USD during today’s Asian session, correcting after yesterday’s decline, which led to the renewal of local lows of April 22. USD retains its previous growth momentum, which was formed at the end of last week, receiving additional support after the speech of the US Treasury Secretary Janet Yellen, who did not rule out the possibility of an early rate hike in order to avoid overheating the American economy, which is demonstrating impressive growth rates. Investors are also optimistic about news of the gradual reopening of the US states against the backdrop of an active vaccination campaign and a general stabilization of the epidemiological situation. Market participants are focused on statistics on business activity in the services and manufacturing sectors of the eurozone from Markit. In addition, a speech by the European Central Bank representative Philip Lane is expected, who may hint on tightening monetary policy in the region.


GBP is trading slightly higher against USD in today’s morning session, again actively testing 1.3900 for a breakout. Despite the rather aggressive strengthening of USD since the end of last trading week, GBP position remains quite strong, which is facilitated by a more stable epidemiological situation in the UK compared to the EU, as well as optimistic macroeconomic statistics. Investors reacted positively to further growth of the Markit Manufacturing PMI in April from 60.7 to 60.9 points, which turned out to be better than the neutral forecasts of analysts. The Bank of England meeting on the interest rate will be held tomorrow, at which, most likely, a unanimous decision will be made to leave the monetary policy parameters unchanged, but the comments of the officials will still be very important.


NZD is actively growing paired with USD during this morning session, recovering from an equally active decline the day before, thanks to which the pair renewed its local lows since April 14. A noticeable support for the instrument is provided by the report on the New Zealand labor market published yesterday. Employment Change in Q1 2021 maintained the same growth rate by 0.6% QoQ, despite the forecast of a slowdown to +0.2% QoQ. The Unemployment Rate for the same period fell from 4.9% to 4.7%, which also turned out to be better than the market’s neutral forecasts. Participation Rate in Q1 2021 increased from 70.2% to 70.4%, which is 0.1% ahead of analysts’ expectations.


USD is showing ambiguous dynamics against JPY today, consolidating at 109.30. The day before, USD showed moderate growth, which was due to the overall positive market sentiment regarding the pace of recovery of the US economy after the coronavirus crisis. The buying sentiment was also supported by the speech of the US Treasury Secretary Janet Yellen, who spoke in favor of a rate hike soon in order to reduce the risks of overheating of the economy, as well as to slow down the rapidly growing inflation. It should be noted that on Tuesday, Japanese sites were closed to celebrate Children’s Day, so at the moment, not all investors have returned to the market. Tomorrow, the minutes of the Monetary Policy Committee of the Bank of Japan meeting are to be published.


Gold prices are consolidating during today’s morning trading session, having retreated from local highs since February 25 yesterday. Another wave of sales of the instrument was associated with the strengthening of USD in response to the statements of the US Treasury Secretary Janet Yellen in favor of raising interest rates. However, the Chairman of the US Fed, Jerome Powell, who spoke earlier, remained true to himself, stating that the national economy is demonstrating steady growth rates, but it is still somewhat premature to talk about a full-fledged recovery from the crisis. Gold was also supported by the declining yield on Treasury bonds. 

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