Technical Analytics Report

Fundamental Analysis - Morning Market Review 15 April 2021

Morning Market Review: 


 EUR is consolidating against USD during today’s Asian session, having stopped its growth and having failed to reach the psychological level of 1.2000. The reason for the weakening of the “bullish” momentum was not the most confident macroeconomic publications from the eurozone, as well as the speech of the head of the European Central Bank (ECB) Christine Lagarde, who said that the region’s economy is still standing on the “two crutches” of fiscal and monetary stimulus. Thus, the European regulator again makes it clear that the soft monetary policy will persist for a long time, especially since inflation in the region, unlike in the United States, does not show alarming signs of too rapid growth. Macroeconomic data, in turn, reflected a fall in industrial production in the eurozone in February by 1% MoM and 1.6% YoY after rising by 0.8% MoM and 0.1% YoY in January.


 GBP shows a slight decline against USD during this morning session, retreating from the local highs since April 7, updated the day before. Some support for USD on Wednesday was provided by a very optimistic speech by the US Fed’s Chair, Jerome Powell, who tried to support the markets, worried about the too rapid rise in prices in the country. The regulator will continue to monitor the situation on the labor market and the dynamics of inflation in order to adjust the vector of monetary policy; however, it may begin to reduce the volume of the quantitative easing program a little earlier than originally planned, since the pace of economic recovery exceeds forecasts. Today, investors are focused on statistics from the USA on the dynamics of retail sales, as well as Empire State Manufacturing Survey and Philadelphia Fed Survey.


 AUD is showing a moderate decline in pairing with USD in trading in today’s Asian session, retreating from local highs since March 23 and preparing to test 0.7700 for a breakdown. The instrument does not respond to the publication of quite strong data from Australia in the March labor market report. The Employment Change increased by 70.7K in March, which turned out to be significantly better than market expectations of 35K. At the same time, the February indicator indicated an increase of 88.7K. Full employment decreased by 20.8K, so the positive dynamics is due only to the growth of part-time employment. The unemployment rate fell from 5.8% to 5.6% in March, which also turned out to be better than forecasts of a reduction to 5.7%.


 USD shows ambiguous trading dynamics against JPY in today’s trading in Asia, consolidating near the local lows since March 25, updated the day before. The positions of USD are gradually strengthening at the end of the week, which, in addition to the technical factors of correction, is facilitated by yesterday’s speech by the US Fed’s Chairman Jerome Powell. The head of the regulator hinted at a possible tightening of the monetary policy earlier than planned, but so far it is only a matter of reducing the volume of the quantitative easing program. JPY, in turn, reacts cautiously to alarming statistics on the dynamics of morbidity in Japan. On April 14, the country’s authorities announced the identification of over 4K new cases of coronavirus infection, which is comparable to the growth rate at the beginning of the year, when a state of emergency was introduced in a number of prefectures. Local medical associations are calling for a return to restrictive measures, as the situation is compounded by the approaching series of national holidays in late April and early May.


 Gold prices are slightly increasing in today’s Asian session, reluctantly recovering from the decline the day before, due to the growth in stock exchanges. In turn, the instrument is still supported by not the strongest positions of USD, as well as the recent statistics from the US on the dynamics of industrial and consumer inflation. As expected, the rate of inflation in the US continues to renew its record highs, which causes concern for investors who are unhappy with the wait-and-see approach of the US Federal Reserve. One way or another, high inflation rates triggered a short-term drop in US Treasury yields, which provided additional support for gold.

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