SUMMARY

  • Following the European Central Bank’s decision to cut interest rates for the first time in 5 years, the EURUSD posted a 1% correction. On Friday, the currency closed down -0.81%.
  • The currency managed to reach 157, but traders are watching for a correction due to the Bank of Japan’s intervention in the currency market.
  • For the time being, traders and investment funds are keeping an eye on the Federal Reserve’s tight monetary policy strategy, which is characterized by keeping interest rates at their current level pending a decline in inflation to the targeted level of 2% per annum.

 

Key developments:

  • Statement by Mr. Nagel, President of the Bundesbank.
  • U.S. 3-year T-Note allocation
  • NAB business confidence index in Australia

EURUSD

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$539
  • Example: 100 pips change in EURUSD price = USD1,000 potential PL.
  • Support 1: 1.0798
  • Support 2: 1.0795
  • Resistance 1: 1.0806
  • Resistance 2: 1.0811

Fundamental Analysis

  • Following the European Central Bank’s decision to cut interest rates for the first time in 5 years, the EURUSD posted a 1% correction. On Friday, the currency closed down -0.81%. It is currently trading at 1.0803.
  • Today, Bundesbank President Nagel will speak about the ECB’s decision and the change in the eurozone’s monetary policy.
  • Traders are watching the results of the European Parliament elections. A right-wing victory is expected.
  • Analysts are watching this week’s US inflation report, which may or may not prompt the Fed to start cutting interest rates.
  • EURUSD is below its 200-day moving average, continuing its fall towards the next support level. The RSI is at 18.20, i.e. in the oversold zone, which could attract buyers’ attention. At the moment, the volume of short positions is higher.

USDJPY

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$499
  • Example: 100 pips change in USDJPY price = USD1,000 potential PL.
  • Support 1: 156.66
  • Support 2: 156.56
  • Resistance 1: 156.80
  • Resistance 2: 156.86

Fundamental Analysis

  • The currency managed to reach 157, but traders are watching for a correction due to the Bank of Japan’s intervention in the currency market. The BoJ announced that it wanted the USDJPY to reach a ceiling of 160.
  • Buyers are still targeting the 160 area, which is mainly supported by Japan’s economic results.
  • Following the good NFP results in the US, the currency quickly rose +1.13%.
  • USDJPY continues to move towards a resistance zone. The price remains above its 200-day moving average. The RSI is at 64.44, indicating neutrality, but close to the overbought zone. This could generate an initial gain. The moving averages indicate buying.
  • Traders are looking to consolidate buying volume in an attempt to mitigate the Bank of Japan’s intervention in the currency market.

NASDAQ 100

Specifications

  • Leverage: 200
  • Units: 1
  • Margin requirement: USD$93
  • Example: movement of 100 points= $1,000 potential PL.
  • Support 1: 19017.59
  • Support 2: 19004.92
  • Resistance 1: 19042.34
  • Resistance 2: 19054.42

Fundamental Analysis

  • Traders and investment funds are currently keeping a close eye on the Federal Reserve’s tight monetary policy strategy, which is characterized by keeping interest rates at their current level while waiting for inflation to fall to the expected level of 2% per annum. The Nasdaq 100 is currently trading down -0.12% at 19,030 points.
  • The index has managed to hold steady at 19,000 points. Traders are looking to consolidate this level to move higher towards 19,200 points. The RSI is at 44.45, i.e. in the neutral zone, so the trend could remain sideways above the current level. The moving averages indicate a massive sell-off.
  • The three best-performing companies at Friday’s close were CrowdStrike +2.53%, Palo Alto Networks +2.02%, and ADP +1.75%. The worst performers were The Trade Desk -3.11%, Biogen -2.83% and Moderna -2.38%.

SOURCES

  • Thomson Reuters
  • Market watch
  • Bloomberg
  • Tradingview

 

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