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GBP/USD and GBP/JPY: British Pound Eyes Additional Gains

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GBP/USD found support near 1.3670 and it is now correcting higher. GBP/JPY is rising and it remains supported for more gains above 150.00

Important Takeaways for GBP/USD and GBP/JPY

  • The British Pound declined below 1.3800, but it found support near 1.3670 against the US Dollar.
  • There was a break above a major bearish trend line with resistance near 1.3740 on the hourly chart of GBP/USD.
  • GBP/JPY is trading nicely above the 105.00 and 105.20 resistance levels.     
  • There was also a break above a key bearish trend line with resistance near 149.20 on the hourly chart.

GBP/USD Technical Analysis

This past week, the British Pound saw a bearish wave below the 1.3850 support zone against the US Dollar. The GBP/USD pair even broke the 1.3720 support level.

However, the pair found support near the 1.3670 zone. A low was formed near 1.3670 on FXOpen and the pair recently started a fresh increase. It broke the 1.3700 and 1.3720 resistance levels.

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There was also a break above a major bearish trend line with resistance near 1.3740 on the hourly chart of GBP/USD. The pair is now trading nicely above the 1.3750 level and the 50 hourly simple moving average.

It is testing the 38.2% Fib retracement level of the key decline from the 1.4001 high to 1.3670 low. The first major resistance on the upside is near the 1.3825 level.

The next major resistance is near 1.3835 level or the 50% Fib retracement level of the key decline from the 1.4001 high to 1.3670 low. A clear upside break above the 1.3825 and 1.3835 resistance levels could open the doors for a larger increase.

If there is a fresh decline, the previous resistance near 1.3740 or the 50 hourly simple moving average might provide support. If there are additional losses, the pair could decline towards the 1.3700 level.

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Strong Dollar Breaks the Reflation Theme – All Eyes on the U.S. Yields

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2020 proved to be a challenging year for currency traders looking to forecast how the U.S. dollar will react to the pandemic. The Federal Reserve of the United States (Fed) immediately lowered the fed funds rate to the lower boundary (i.e., close to zero) and vouched to leave it there for as long as necessary.

On top of that, the Fed restarted the quantitative easing program, buying bonds to lower the yields on the short and long end of the curve. Furthermore, it opened USD swap lines with other central banks in the advanced world to provide liquidity and advert the strong dollar theme.

It worked.

The dollar initially appreciated as the world looked for safety in the face of the pandemic, but then the Fed’s plan entered into effect. Slowly at first, more aggressively after, the dollar started to lose ground across the dashboard.

Everything appreciated in dollar terms – the euro, the Australian dollar, the British pound, equities, and commodities alike. The bearish trend on the dollar was so strong that all investment houses forecasted an even lower dollar in 2021.
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They were right.

The so-called reflation trade, where U.S. equities advance, the dollar declines, and risk-on dominates, was the theme for most of the first quarter of the year. However, the dollar started to show some strength recently on the back of a faster economic recovery, impressive vaccination campaign, and a U.S. administration that delivers.

What’s Next for the U.S. Dollar?

As we head into the second quarter of the year, the dollar trades with a mixed tone. On the one hand, it gained against the euro since the year started.

At the start of January, the EURUSD pair traded above 1.23, and last Friday closed below 1.18. Because the euro has the biggest weight in the dollar index, the move lower in the EURUSD exchange rate led to a reversal in the DXY.

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Gold made a new all-time high in 2020 – it traded above $2,000 last summer but is in retreat ever since. It is barely holding above $1,700 at the moment, and fears of higher inflation in the United States and the developed world are not enough to fuel a rally in the yellow metal.

The problem for the reflation trade and gold comes from the fixed-income market. The U.S. yields are rising, and whenever this happened in the past, gold weakened.

Put it simply, rising yields mean that investors flee the safety of bonds in search of higher returns in riskier assets. Effectively, it means that confidence is back and, thus, gold suffers as investors do not look for protection anymore.

Higher yields also bode well for the dollar. Hence, before betting on a lower dollar, investors should first monitor the fixed-income market and interpret where the yields will go.

All in all, the second quarter will be extremely interesting. If the yields continue to rise, the dollar will have a hard time weakening.

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BTC and XRP – Looking bullish

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BTC/USD

The price of Bitcoin has been on the rise since the 25th of March when it fell to $50,420 level. From there a recovery of 17.38% was measured to its highest point so far at $59,236. Currently, it is being traded slightly lower but is still on an upward trajectory.

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The low on the 25th was the end of the corrective stage in which the price was since the 13th of March and as the third wave ended we have seen the start of the next impulsive move to the upside.

As its first wave looks like it has already developed now we could be already seeing the start of 3rd sub-wave from the five-wave impulse. The price would be now expected to continue moving upward above its last all-time high and potential somewhere around $68,000-$72,000 zone.

It is still soon to project the ending point so we are going to watch closely how the price action develops and reevaluate our projection accordingly. There could be a possibility that we are seeing an even higher degree impulse wave, increasing the room for growth.

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EUR/USD Dives, USD/CHF Likely To Continue Higher

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EUR/USD started a fresh decline below the 1.1800 and 1.1780 support levels. USD/CHF is rising and it is likely to continue higher above 0.9450.

Important Takeaways for EUR/USD and USD/CHF

  • The Euro started a fresh drop below the 1.1850 and 1.1800 support levels against the US Dollar.
  • There is a major bearish trend line forming with resistance near 1.1755 on the hourly chart of EUR/USD.
  • USD/CHF is trading in a bullish zone above the 0.9350 resistance zone.
  • There is a key ascending channel forming with support near 0.9405 on the hourly chart.

EUR/USD Technical Analysis

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The Euro failed to stay above the 1.1900 zone and started a fresh decline against the US Dollar. The EUR/USD pair broke the key 1.1850 pivot zone to move into a bearish zone.

The pair even broke the 1.1820 support level and settled below the 50 hourly simple moving average. The bears were able to push the pair below 1.1800 and a low is formed near 1.1709 on FXOpen.

It is currently showing a lot of bearish signs and it seems like there are high chances of more losses below the 1.1700 support zone. The next major support could be near the 1.1660 level, below which the pair may possibly test the 1.1620 support.

On the upside, an initial resistance is near the 1.1730 level. It is close to the 23.6% Fib retracement level of the recent decline from the 1.1804 high to 1.1709 low.

There is also a major bearish trend line forming with resistance near 1.1755 on the hourly chart of EUR/USD. The trend line is close to the 50% Fib retracement level of the recent decline from the 1.1804 high to 1.1709 low.

The 50 hourly simple moving average is also near 1.1760. If there is a break above the trend line resistance, the pair could correct higher towards the 1.1800 zone. The next major resistance is near the 1.1850 level.

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LTC and EOS – More upside expected

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LTC/USD

The price of Litecoin has been on the rise from the 25th when it was being traded at $169. We have seen an increase of 18.7% as the price came up to $200 at its highest point today. Currently it is being traded slightly lower but is still in an upward trajectory overall.

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Looking at the hourly chart, we can see that the price came up to the 0.382 Fibonacci level and made an attempt to break out above it but failed to do so. The first attempt was made on the 29th from which we have seen some sideways movement below the level before finally another attempt was made today. The price would now be expected to make pullback as the 3rd attempt for a breakout failed, but we haven’t seen a rejection just yet.

If from the 25th we have seen the development of the 4th corrective wave out of the five-wave impulse to the downside now the price would be starting the development of its 5th wave to the downside which would be set to achieve a lower low compared to the 25th one. However, there could be a possibility that the decrease ended as a three-wave move as the part of the higher degree complex correction count, in which case the ascending move would be the first sub-wave of the next starting impulse to the upside.

In either way, we are going to see from the interaction with the 0.382 Fib level what would be the scenario, as if it manages to go above it, it would enter the territory of the 1st wave and invalidated the possibility of a lower low.

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Gold Price and Oil Price Eye Additional Gains

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Gold price started a fresh increase after testing the $1,680 support zone. Crude oil price is trading nicely above $60.00 and it might continue to rise steadily.

Important Takeaways for Gold and Oil

  • Gold price remained well bid near the $1,680 and $1,675 levels against the US Dollar.
  • There was a break above a major bearish trend line with resistance near $1,708 on the hourly chart of gold.
  • Crude oil price is holding the key $59.50 and $60.00 support levels.
  • There was a break above a key bearish trend line with resistance near $60.55 on the hourly chart of XTI/USD.

Gold Price Technical Analysis

Earlier this week, gold price extended its decline below the $1,710 and $1,700 support levels against the US Dollar. However, the bulls were active near the $1,680 and $1,675 levels.

A low was formed near $1,677 on FXOpen before the price started a fresh increase. There was a break above the $1,695 and $1,700 resistance levels. The price climbed nicely above the 50% Fib retracement level of the downward move from the $1,745 swing high to $1,677

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There was also a break above a major bearish trend line with resistance near $1,708 on the hourly chart of gold. The price is now trading well above $1,710 and the 50 hourly simple moving average.

It is now testing the 76.4% Fib retracement level of the downward move from the $1,745 swing high to $1,677 low. A successful break above the $1,730 resistance could open the doors for a larger increase in the coming sessions.

The next key resistance is near the $1,745 level. The main resistance is still near $1,750, above which the price could test $1,780. Conversely, the price could fail to continue higher and it might decline below the $1,720 level.

The main support is near the $1,705 level. A clear break below the $1,705 support may possibly start a strong decline towards $1,675 in the near term.

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GBP/USD Could Accelerate Higher, EUR/GBP Remains At Risk

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GBP/USD is facing resistance near 1.3850, but it might accelerate higher. EUR/GBP is facing an increase in selling pressure below 0.8550.

Important Takeaways for GBP/USD and EUR/GBP

  • The British Pound is showing positive signs, but it is facing resistance near 1.3850.
  • There is a key bullish trend line forming with support at 1.3810 on the hourly chart of GBP/USD.
  • EUR/GBP declined below the 0.8580 and 0.8550 support levels.
  • There is a connecting bearish trend line forming with resistance near 0.8510 on the hourly chart.

GBP/USD Technical Analysis

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After forming a support base above 1.3720, the British Pound started a fresh increase against the US Dollar. The GBP/USD pair broke the 1.3780 and 1.3800 resistance levels to move into a positive zone.

There was also a close above the 1.3800 level and the 50 hourly simple moving average. The pair is now facing a strong resistance near the 1.3850 level. The recent high was formed near 1.3852 on FXOpen before there was a minor downside correction.

There was a break below the 1.3825 level. The pair even declined below the 23.6% Fib retracement level of the upward move from the 1.3746 swing low to 1.3852 high.

The pair is now holding the 1.3800 support zone and the 50 hourly simple moving average. There is also a key bullish trend line forming with support at 1.3810 on the hourly chart of GBP/USD. The trend line is close to the 50% Fib retracement level of the upward move from the 1.3746 swing low to 1.3852 high.

If there is a downside break below the trend line, the pair could decline towards the 1.3780 and 1.3770 support levels. Any more losses might lead the pair towards the key 1.3720 support.

On the upside, the pair is facing hurdles near the 1.3850 level. A clear upside break above the 1.3850 level could open the doors for a steady increase. In the stated case, GBP/USD could rise towards the 1.6000 level in the near term.


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Global Economic Activity Picks Up On Increased Vaccination Campaigns

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As most of the world celebrates Easter, strong signs of economic recovery emerge. Last Friday, with most banks closed, the United States revealed the Non-Farm Payrolls (NFP) numbers for March 2021.

The release exceeded all expectations, showing that the United States economy added close to a million new jobs in only one month. Moreover, the unemployment rate edged down to 6%, a further encouraging sign that the world’s largest economy is recovering from the pandemic.

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Furthermore, important revisions to previous data showed that an additional 156k jobs were created in January and February. In total, 1.7 million jobs were added by the United States economy in the first quarter of the year. Because this is the largest economy in the world, the chances are that the positive economic effects will spill over to its main trading partners, fueling a strong economic recovery around the world.
Vaccines Rollout Spurring Economic Growth

Last November, the world found out that science delivered on its efforts to find a vaccine against the COVID-19 virus. For three consecutive weeks, companies like Pfizer/BioNTech, Moderna, or AstraZeneca, released promising data on their vaccine trials.

Fast forward four months to present times, and the vaccines are rolled out around the world. While differences exist in the vaccination pace, the main idea is that the quicker the governments manage to inoculate the population, the faster the economy recovers, and life will get back to normal.

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Supply and distribution disparities exist. The United Kingdom and the United States are leading the developed world, while the Euro area is lagging behind.

It all came down to how fast the nations moved to secure the vaccines and what risks they took in the early days of the pandemic. Europe lost momentum in the first quarter, but things look promising starting with April – in the first day of April, over three million people received a vaccine in Europe, a pace that will likely increase moving forward.

If we add the fiscal stimulus in the United States (i.e., $1.9 trillion) already distributed and the upcoming $3 trillion for long-term infrastructure projects, the chances are that the economic data will beat expectations in the months ahead too.

The currency market acted accordingly and rewarded investors closely watching the vaccination race – the U.S. dollar and the British pound rallied in the last months, while the euro lagged. Moving forward, 2021 might be a year dominated by a risk-on environment as the global economy recovers from the pandemic. The key stays with the vaccination campaigns – the quicker the world’s nations inoculate the population, the better for the economic growth.

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BTC struggling to break $60,000 while Ripple shown a parabolic rise

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BTC/USD

The price of Bitcoin has attempted to break the $60,000 last week as we have mostly seen buyers’ pressure on the level throughout the week until Sunday when a decrease was made to $56,466. From there we have seen another increase followed by a higher low and now the price has made a higher high which is a bullish sign. However, it is once again back below the first horizontal level in line at $59,420 and is shortly going to make another breakout attempt.

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The uptrend continuation would be expected in either way but it is still unclear whether or not before it we are going to see a deeper retracement. The primary scenario is a bullish one and says that now the price has started developing a new lower degree five-wave move to the upside.

If this is true, then we are going to see another higher low for the 4th wave and potentially an interaction with the all-time high on its ending wave. But this would only be the 1st sub-wave of the higher degree count which is why new highs would be anticipated after a pullback to establish further support.

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EUR/USD and EUR/JPY: Euro is Eyeing More Gains

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EUR/USD started a fresh increase above the 1.1820 and 1.1850 resistance levels. EUR/JPY is correcting gains, but it is likely to restart its rise above 130.50.

Important Takeaways for EUR/USD and EUR/JPY

  • The Euro formed a base above 1.1720 and started a fresh increase above 1.1800.
  • EUR/JPY is also trading in a positive zone above the 130.00 support.
  • There is a major bullish trend line forming with support near 129.95 on the hourly chart.

EUR/USD Technical Analysis

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After trading close to the 1.1700 level, the Euro started a fresh increase against the US Dollar. The EUR/USD pair broke the 1.1780 and 1.1800 resistance levels to move into a positive zone.

There was also a break above a couple of bullish continuation patterns near 1.1765 and 1.1820 on the hourly chart of EUR/USD. It opened the doors for more gains above the 1.1850 level and the 50 hourly simple moving average.

It traded as high as 1.1877 on FXOpen and it is now consolidating gains. An initial support is near the 1.1855 level. It is near the 23.6% Fib retracement level of the recent increase from the 1.1795 low to 1.1877 high.

Any more losses might call for a test of the 1.1840 support or the 50% Fib retracement level of the recent increase from the 1.1795 low to 1.1877 high. The next major support is near the 1.1800 level or the 50 hourly simple moving average.

On the upside, the pair is facing resistance near the 1.1880 level. The next major resistance is near the 1.1920 level. A clear break above 1.1920 might start a steady increase towards the 1.2000 resistance. The next major resistance above the 1.2000 level sits near the 1.2050 level.

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LTC and EOS – Looking for support

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LTC/USD

The price of Litecoin has been rising since last week and came up to its previous high at $244 on the 6th of April. From there we have seen a decline of 13.26% as it came down to $211.62. Currently, it is being traded at around $220.9 as a minor recovery has been made but the price has been moving to the downside again.

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On the hourly chart, you can see that the price of Litecoin was on the rise since the 25th of March when it fell down to the 0.618 Fibonacci level. This was at first expected as a corrective 4th wave from the descending impulse wave but as it continued increasing from there above the 0.382 FIb level the count was invalidated which implied that previously we have seen a three-wave correction.

If the previosly seen descending move ended as the higher degree WXY correction then from the 25th of March we have seen the start of the next impulsive move being its first wave. No retracement back to the 0.382 Fib level could be expected as the second sub-wave of the five-wave impulse to the upside from which the price of Litecoin would be set to continue its upward trajectory. However, first, we need to see the establishment of support and the validation of the count so from the momentum and the depth of the expected descending move we are going to reevaluate this possibility.

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AUD/USD and NZD/USD Remains Supported For More Upsides

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AUD/USD is following a positive zone and it recently broke the 0.7620 resistance. NZD/USD is also trading in a positive zone above the 0.7030 support.

Important Takeaways for AUD/USD and NZD/USD

  • The Aussie Dollar started a fresh increase above the 0.7580 and 0.7600 levels against the US Dollar.
  • There is a key bullish trend line forming with support near 0.7630 on the hourly chart of AUD/USD.
  • NZD/USD traded as high as 0.7065 and it is currently correcting lower.
  • There is a major bullish trend line forming with support near 0.7025 on the hourly chart of NZD/USD.

AUD/USD Technical Analysis

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After testing the 0.7550 support zone, the Aussie Dollar started a fresh increase against the US Dollar. The AUD/USD pair broke a few key hurdles near the 0.7580 level to move into a positive zone.

The pair even broke the 0.7600 level and the 50 hourly simple moving average. It traded as high as 0.7676 on FXOpen and recently corrected lower. The recent swing high was formed near 0.7660 and the pair is now trading below the 0.7650 level.

It broke the 23.6% Fib retracement level of the upward move from the 0.7600 swing low to 0.7660 swing high. It is now testing the 0.7635 support level and the 50 hourly simple moving average.

There is also a key bullish trend line forming with support near 0.7630 on the hourly chart of AUD/USD. The trend line is close to the 50% Fib retracement level of the upward move from the 0.7600 swing low to 0.7660 swing high.

If there is a downside break below the trend line, the pair could dive towards the 0.7600 support zone in the near term. On the upside, the pair is facing hurdles near the 0.7650 and 0.7660 levels.

The main resistance is near the 0.7675 level. A successful close above the 0.7660 and 0.7675 levels could open the doors for a steady increase in the coming sessions. The next key resistance could be 0.7720.

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GBP/USD is Diving, USD/CAD Could Start Steady Increase

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GBP/USD failed to stay above 1.3800 and extended its decline. USD/CAD is showing positive signs, but it must clear 1.2570 for a decent increase in the near term.

Important Takeaways for GBP/USD and USD/CAD

  • The British Pound started a fresh decline from well above the 1.3850 support zone.
  • There is a key declining channel forming with resistance near 1.3715 on the hourly chart of GBP/USD.
  • USD/CAD found support near the 1.2525 zone and it is now recovering higher.
  • Earlier, there was a break below a key contracting triangle with support near 1.3565 on the hourly chart.

GBP/USD Technical Analysis

gbpusd-chart-1.png

This past week, the British Pound failed to stay above the 1.3850 and 1.3800 support levels against the US Dollar. As a result, the GBP/USD pair started a fresh decline and it even broke the 1.3750 support zone.

There was a close below the 1.3750 level and the 50 hourly simple moving average. The pair declined below the 1.3700 level and it traded as low as 1.3670. Recently, there was an upside correction above 1.3700, but the pair struggled to clear the 1.3750 zone.

A high was formed near 1.3744 and the pair is now declining. It broke the 50% Fib retracement level of the upward move from the 1.3670 low to 1.3744 high.

There is also a key declining channel forming with resistance near 1.3715 on the hourly chart of GBP/USD. The pair is now trading near the 76.4% Fib retracement level of the upward move from the 1.3670 low to 1.3744 high.

It seems like the pair might continue to move down below the 1.3670 support zone. The next major support is near the 1.3620 level, below which the pair might test 1.3580.

On the upside, the 1.3720 zone is a major hurdle along with the 50 hourly simple moving average. A successful close above the 1.3720 and 1.3750 levels could open the doors for a decent increase in the coming sessions.

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Cryptocurrencies Remain Well Bid as Coinbase Goes Public This Week

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Over the weekend, the price of Bitcoin extended its rally to above $60,000 again. While not making a new all-time high, Bitcoin remains well bid ahead of the main event of the week ahead – the listing of Coinbase, one of the largest crypto exchanges.

The cryptocurrency market increased in size dramatically in recent years. The interest surrounding cryptocurrencies is on the rise, as suggested by the number of people trading on the various exchanges.

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Part of the process of becoming a listed company, Coinbase made public its Q1 2021 numbers. What is interesting is that the number of active traders increased dramatically in the first months of the year, explaining the rise in Bitcoin and other cryptocurrencies.

While many traders focus on Bitcoin only, some other cryptocurrencies had an even better performance than Bitcoin. For example, Ethereum reached a new all-time high over the weekend, and the rally looks poised to continue.

Bitcoin’s detractors argue that the digital currency wastes a vast amount of energy, and thus it is an environmental disaster. Because of that, many traders flee Bitcoin to other alternatives, such as Ether, that do not have such a problem.

Yet, when it comes to institutional investors’ adoption, Bitcoin remains the preferred choice. Moving forward, the price of Bitcoin remains well bid, and so the rally is poised to continue.

Two days from now, Coinbase, one of the largest crypto exchanges in the world, goes public. Companies usually choose to go public during a rising market. Often companies postpone the listing process when markets are falling. But now, the main indices are close to all-time highs, and so the timing of going public boats well for Coinbase and cryptocurrency traders.

Judging by the interest surrounding cryptocurrencies, the chances are that Coinbase’s listing will be a bullish event for the main cryptocurrencies too. As such, Bitcoin and Ethereum remain well bid, with buyers likely to step in on every dip.

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EUR/USD Gains Traction, USD/JPY Is Extending Losses

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EUR/USD started a decent increase after forming a base above the 1.1850 level. USD/JPY is declining and it broke the 109.00 support zone.

Important Takeaways for EUR/USD and USD/JPY

  • The Euro is showing positive signs above the 1.1880 and 1.1900 levels.
  • There was a break above a key declining channel with resistance near 1.1915 on the hourly chart of EUR/USD.
  • USD/JPY started a fresh decline below the 109.20 and 109.00 support levels.
  • There is a major bearish trend line forming with resistance near 109.50 on the hourly chart.

EUR/USD Technical Analysis

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After a decent upward move, the Euro settled above the 1.1850 resistance zone against the US Dollar. Recently, the EUR/USD pair formed a support base above 1.1850 and started a fresh increase.

It broke a few important hurdles near the 1.1880 and 1.1900 levels. There was also a break above a key declining channel with resistance near 1.1915 on the hourly chart of EUR/USD. The pair gained pace above the 1.1940 level and settled above the 50 hourly simple moving average.

A high is formed near 1.1960 on FXOpen and the pair is now consolidating gains. An initial support on the downside is near the 1.1940 level.

The 23.6% Fib retracement level of the recent wave from the 1.1877 low to 1.1960 high is also near the 1.1940 level. The next major support on the downside is near the 1.1920 level (the recent breakout zone).

The 50% Fib retracement level of the recent wave from the 1.1877 low to 1.1960 high is also near the 1.1920 level. Any more losses might call for a test of the 1.1850 level. On the upside, the first major resistance is now forming near the 1.1960 levels.

A successful break above the 1.1960 resistance could open the doors for a push towards the 1.2000 resistance zone in the coming sessions.

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LTC and EOS – Resistance found

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LTC/USD

The price of Litecoin has reached $282 at its highest point yesterday and after a minor retracement made it back to that area again today. Currently, it is being traded at $271.89 and is looking like it’s moving to the downside.

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On the hourly chart, we can see that the price of Litecoin was in an uptrend from the 25th of March when it was traded at $167. Measured to its highest point yesterday that was an increase of 68.8% but what more significant is that it made a higher high compared to the one on the 20th of February. This is why the increase from the 25th is considered the 3rd wave from the higher degree five-wave count. The wave structure implies that it might have ended and considering that we have seen the formation of the ascending channel from the start of the year now a pullback all the way down to its support might occur.

There is still a bit more room to the upside for proper interaction with the channel’s resistance and more so if the level is adjusted to encompass February’s high. However, this structure appears to be an ending diagonal as the 5th wave from the higher degree impulse which is why further interactions with its level would be expected before the completion, meaning we could likely see the price of Litecoin back to $220 area, before another higher high to $330 area.

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Gold Price and Oil Price Could Continue To Rise

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Gold price started a fresh increase above the $1,740 resistance zone. Crude oil price is also rising and it is likely to continue higher above $63.50.

Important Takeaways for Gold and Oil

  • Gold price gained pace after it broke the $1,720 and $1,740 resistance levels against the US Dollar.
  • There was a break above a key bearish trend line with resistance near $1,745 on the hourly chart of gold.
  • Crude oil price climbed higher nicely and it settled above the $62.00 support zone.
  • There is a major bullish trend line forming with support near $62.45 on the hourly chart of XTI/USD.

Gold Price Technical Analysis

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Earlier this week, gold price formed a decent support base above the $1,725 level against the US Dollar. As a result, there was a fresh increase above the $1,730 and $1,740 levels.

There was a break above a key bearish trend line with resistance near $1,745 on the hourly chart of gold. The price gained pace above the $1,750 level and it settled well above the 50 hourly simple moving average.

It even traded above the $1,765 level and a high is formed near $1,769 on FXOpen. The price is now correcting lower and trading below the $1,765 level.

It is testing the 23.6% Fib retracement level of the upward move from the $1,732 low to $1,769 high. An immediate support on the downside is near the $1,758 level. The next major support on the downside is near the $1,755 level.

Any more losses might call for a test of the $1,750 support. It is near the 50% Fib retracement level of the upward move from the $1,732 low to $1,769 high.

On the upside, the $1,768 and $1,770 levels are immediate hurdles. A clear break above $1,770 might open the doors for a steady increase towards the $1,780 level. The next key resistance is near the $1,800 level.

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GBP/USD Eyes More Upsides, EUR/GBP Holding Key Support

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GBP/USD is showing positive signs above 1.3800 and 1.3780. EUR/GBP is showing bearish signs and it is testing a major support near 0.8640.

Important Takeaways for GBP/USD and EUR/GBP

  • The British Pound started a decent increase from the 1.3720 support zone.
  • There was a break above a key contracting triangle with resistance near 1.3780 on the hourly chart of GBP/USD.
  • EUR/GBP failed to continue higher above 0.8720 and corrected lower.
  • There was a break below a major contracting triangle with support near 0.8685 on the hourly chart.

GBP/USD Technical Analysis

After forming a support base above 1.3700, the British Pound started a fresh increase against the US Dollar. The GBP/USD pair broke the 1.3750 and 1.3800 resistance levels to move into a positive zone.

There was also a close above the 1.3800 level and the 50 hourly simple moving average. During the increase, there was a break above a key contracting triangle with resistance near 1.3780 on the hourly chart of GBP/USD.

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The pair climbed above the 1.3820 level and traded as high as 1.3843 on FXOpen. Recently, there was a downside correction from the 1.3843 high.

The pair tested the 23.6% Fib retracement level of the upward move from the 1.3716 swing low to 1.3843 high at 1.3813. The next major support on the downside is near the 1.3800 zone (the recent breakout zone).

Any more losses could initiate a drop towards the 1.3780 support or the 50 hourly simple moving average. The 50% Fib retracement level of the upward move from the 1.3716 swing low to 1.3843 high is also near the 1.3780 level.

On the upside, the 1.3840 and 1.3850 levels are immediate hurdles. A successful break above 1.3850 might clear the path for more gains above the 1.3880 and 1.3900 levels.

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Lumber Prices Go Ballistic as the U.S. Housing Market Booms

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The U.S. housing sector is closely watched by investors from all over the world. It has strategic importance both for the United States GDP (Gross Domestic Product) and for the world’s economies.

People are too focused now on the COVID-19 pandemic to remember that the previous crisis, a financial one, started from the U.S. housing sector. In 2008-2009, the U.S. housing market bubble burst, a combination of derivative products used the wrong way, and so the market collapsed rapidly. The shockwave reached Europe and other developed economies, generating a financial crisis that haunted Europe for several years.

Fast forward to 2021, the world still struggles with the pandemic, but the housing market in the United States is in an unprecedented boom. This is very good news for the domestic economy and also for other economies. After all, when America’s economy outperforms, the positive spillovers influence other economies too.

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Recovery Stronger Than Expected As Suggested by Strong Housing Sector Activity

The COVID-19 pandemic triggered changes in consumer behavior. People learned that online shopping (for some products) is as good as going out and buying the product. And, cheaper.

Therefore, the chances are that most of the changes seen during the pandemic are here to stay. One of the most interesting changes affected the workplace. Those who can work from home have built a home office, for example.

Also, people fled cities for outdoor spaces. Or, they stopped using common transportation favoring personal cars.

As such, contrary to all expectations, the COVID-19 recession was unique as both the auto and the housing sectors performed well. In particular, the housing sector has seen tremendous growth, as America literally faces a shortage of new houses.

And lumber to build them.
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The price of lumber broke above $1,000 as there is no lumber enough to satisfy the demand. For those unfamiliar with the commodities market, lumber is a product of timberland and is usually harvested in periods of rising prices.

This is such a period. However, the demand from the U.S. housing market is so strong that the futures market still points to higher lumber prices. Commodities are typically traded on futures exchanges, where the clearinghouse brings together buyers and sellers and settles the prices on a daily basis.

When the spot price exceeds the futures price, it is said that the market is in backwardation. The entire lumber futures curve is in backwardation – a bullish sign suggesting more upside is possible for the price of lumber.

Therefore, investors should expect more upside for the U.S. housing market and, thus, for the U.S. economy. Are we about to witness one of the biggest economic recoveries in history?

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BTC and XRP – Recovery seen but further downside expected

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BTC/USD

The price of Bitcoin has fallen by 20.4% measured from its all-time high of $64,791 made on the 14th of April to its lowest wick on the 17th when the price came down to $51,531. From there we have seen a recovery to $57,702 but then again the price started falling back down and is currently being traded at around $55,980.

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On the hourly chart, you can see that the price made the majority of its decrease on the 17th which was the 5th wave from the descending impulse. This could be the first sub-wave of the higher degree downturn that we are to see in the market.

It broke down from some of the highly significant support levels both horizontal and the ascending triangle in which it was since the 21st of February. This ascending triangle could have been the ending diagonal which marked the completion of the five-wave impulse from March last year.

This is the overdue correction that the market needed to overcome in order to continue moving to the upside and is now likely to push the price further to the downside. However, this isn’t expected in a straight line. More likely we are to see now a corrective increase and a consolidation before another impulsive move to the downside of the equally strong amount.

Potentially we could see now an ABC correction out of which we are currently seeing the development of the B wave and in the upcoming days the C wave would make a higher high compared to Monday’s one but from there further lows would be expected below the $50,000 mark.

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EUR/USD Gains Traction, USD/CHF Could Extend Losses

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EUR/USD started a fresh increase above the 1.1950 and 1.2000 resistance levels. USD/CHF is declining and it could dive if it breaks the 0.9125 support.

Important Takeaways for EUR/USD and USD/CHF

  • The Euro started a fresh increase after it settle above 1.1950 against the US Dollar.
  • There is a key connecting bullish trend line forming with support near 1.2000 on the hourly chart of EUR/USD.
  • USD/CHF is following a bearish path below the 0.9200 support zone.
  • There is a major bearish trend line forming with resistance near 0.9170 on the hourly chart.

EUR/USD Technical Analysis

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The Euro formed a strong support base above the 1.1950 level against the US Dollar. As a result, the EUR/USD pair started a fresh increase and it broke many hurdles near the 1.1980 and 1.2000 levels.

The pair even surged above the 1.2040 level and settled above the 50 hourly simple moving average. A high was formed near 1.2079 on FXOpen and the pair is now correcting gains. It traded below the 1.2060 and 1.2050 levels.

There was a break below the 23.6% Fib retracement level of the upward move from the 1.1942 swing low to 1.2079 high. However, the bulls are defending the 1.2030 support zone and the 50 hourly simple moving average.

The next major support is near the 1.2010 level. It is near the 50% Fib retracement level of the upward move from the 1.1942 swing low to 1.2079 high.

There is also a key connecting bullish trend line forming with support near 1.2000 on the hourly chart of EUR/USD. On the upside, the pair is facing hurdles near the 1.2050 level. The next major resistance is near the 1.2080 level, above which the pair could rise above the 1.2100 zone.

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LTC and EOS – Are we seeing the establishment of an uptrend?

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LTC/USD

The price of Litecoin has been on the rise since Tuesday when it fell to $234 at its lowest point. It is currently being traded at $281 which is an increase of 21.45% from Tuesday and is still in an upward trajectory.

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On the hourly chart, you can see that the price of Litecoin is currently sitting at the level of its Monday’s high and has found resistance, indicated but the wick on the seller’s side on the hourly candle. However, we have seen a breakout from the descending triangle which is why the momentum looks strong enough to push the price higher.

If we have seen the completion of the corrective move from the 17th, the next move could be the starting five-wave impulse to the upside that is going to make new highs. Another possibility could be that the price is forming the second sub-wave of the higher degree correction in which case the current rise would end as a three-wave formation. But in either way from here another high to around the $310 area would be expected.

From the pullback that would be anticipated after we are going to see which scenario is in play as if the price falls back below $280 again on the pullback, it would invalidate the possibility of the price forming a five-wave impulse. In that case another lower low could be seen below the $230 area but for now the chart of Litecoin looks bullish.

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AUD/USD and NZD/USD Could Extend Losses

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AUD/USD failed to clear the 0.7800 resistance and corrected lower. NZD/USD is likely to extend losses if there is a clear break below the 0.7150 support.

Important Takeaways for AUD/USD and NZD/USD

  • The Aussie Dollar failed to gain strength above the 0.7800 level against the US Dollar.
  • There is a key bearish trend line forming with resistance near 0.7730 on the hourly chart of AUD/USD.
  • NZD/USD corrected lower and it is now testing the 0.7150 support zone.
  • There was a break below a major contracting triangle with support near 0.7180 on the hourly chart of NZD/USD.

AUD/USD Technical Analysis

After a steady increase, the Aussie Dollar struggled above the 0.7800 level against the US Dollar. The AUD/USD pair traded as high as 0.7815 on FXOpen and it recently started a fresh decline.

There was a break below the 0.7780 and 0.7750 support levels. The pair even settled below the 0.7750 level and the 50 hourly simple moving average. It traded as low as 0.7689 and it is now correcting losses.

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It broke the 23.6% Fib retracement level of the downward move from the 0.7764 swing high to 0.7689 low. On the upside, there is a major resistance forming near the 0.7725 and 0.7730 levels. There is also a key bearish trend line forming with resistance near 0.7730 on the hourly chart of AUD/USD.

The trend line is close to the 50% Fib retracement level of the downward move from the 0.7764 swing high to 0.7689 low. The 50 hourly simple moving average is also near the trend line.

Therefore, a clear break above the trend line and 0.7730 is must for a steady increase. The next major resistance could be 0.7750, above which the price could rise towards the 0.7800 resistance.

Conversely, the pair could decline below the 0.7700 support zone. If there is a downside break below the 0.7700 and 0.7685 levels, the pair could extend its decline towards the 0.7650 level.

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GBP/USD and GBP/JPY: British Pound Eyes Fresh Increase

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GBP/USD found support near 1.3825 and it is now showing positive signs. GBP/JPY is stable above 149.40 and it is now facing hurdles near 150.00.

Important Takeaways for GBP/USD and GBP/JPY

  • The British Pound tested the 1.3825 support zone and it is now recovering against the US Dollar.
  • There was a break above a major contracting triangle with resistance near 1.3885 on the hourly chart of GBP/USD.
  • GBP/JPY is holding the main 149.40 and 149.20 support levels.
  • There was a break above a key bearish trend line with resistance near 149.65 on the hourly chart.

GBP/USD Technical Analysis

This past week, the British Pound saw a steady decline below the 1.3950 support zone against the US Dollar. The GBP/USD pair even broke the 1.3880 support level.

However, the pair found support near the 1.3825 zone. A low was formed near 1.3823 on FXOpen and the pair recently started a fresh increase. It broke the 1.3850 and 1.3880 resistance levels.

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There was also a break above a major contracting triangle with resistance near 1.3885 on the hourly chart of GBP/USD. Moreover, there was a break above the 50% Fib retracement level of the key decline from the 1.3949 swing high to 1.3823 low.

The pair is now trading nicely above the 1.3750 level and the 50 hourly simple moving average. It is testing the 61.8% Fib retracement level of the key decline from the 1.3949 swing high to 1.3823 low.

If there is a clear upside break above the 1.3900 and 1.3920 levels, there are chances of more upsides. In the stated case, the pair is likely to accelerate higher towards the 1.4000 resistance.

If there is a fresh decline, the previous resistance near 1.3880 or the 50 hourly simple moving average might provide support. If there are additional losses, the pair could decline towards the 1.3850 level.

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GDP Growth Follows Success In Vaccination Efforts

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The week ahead is marked by two important central banks delivering their monetary policy statements – the Bank of Japan and the Federal Reserve in the United States. While the two events are crucial for Japanese yen and U.S. dollar traders, the market is also interested in what the GDP data in the United States and Canada will reveal.

Since the COVID-19 pandemic hit the world, the GDP or Gross Domestic Product fell sharply in all countries. For the first time, the entire world was in an economic recession.

Last November, the world found out for the first time that vaccines have promising results. Since that moment, a race against the clock started, with the price being not only the defeat of the virus but also a quick economic recovery.

Chinese GDP Growth Signals Strong Bounce in Developed Economies Too

Unfortunately, there are not enough vaccines for everybody at this point, but the situation gets better by the day. The more time passes, the more vaccines will be delivered throughout the world, and the faster the economic recovery will be.

However, because of the inequalities in vaccine deliveries, some countries will experience economic growth faster and stronger than others. Hence, their currencies will likely benefit from it, as well as the stock market.

The Chinese GDP grew by over 18% in the first quarter of the year, when compared to the same quarter a year ago. The bounce was much stronger than expected, and the chances are that the U.S. economic growth will also exceed expectations.

Next Thursday, the advanced GDP in the United States is expected to show that the U.S. economy grew by 6.5% in the first quarter of the year. Judging by how the Chinese economy performed, the chances are that the U.S. economy will also beat expectations.

One day earlier, Jerome Powell will have a hard time explaining to market participants why the Fed is not preparing to taper its asset purchases. As the chart above shows, America is one of the nations that lead in the vaccination race, and so the economic recovery is much stronger – why the need for easing?

To sum up, the bigger the economic expansion, the more difficult for the Fed to keep its policy unchanged. The tapering may be closer than market participants expect.

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