Daily F.X. Analysis, May 04 – Eyes on E.U. Economic Forecasts!
By Eaglefx On May 04, 2020 in Daily Market Analysis
The U.S. dollar remains weaker due to more than expected unemployment claims. The recorded unemployed people for the previous week increased to 3839K against the expected 3500K and weighed on the U.S. dollar.
Later today, during the New York session, the market will be following ISM Manufacturing PMI from the United States. Later today, the eyes will remain on the E.U. Economic Forecasts as it may help drive some movement in the market today.
Economic Calendar
BTC/USD - Daily Analysis
During the previous week, the BTC/USD prices soared sharply to violate major resistance areas and to trade around $9,400. It crossed over the 200-day SMA (simple moving average), the 200-day EMA (exponential moving average), and the 0.618 Fibonacci Retracement level measured in within $3,600 and $14,000.
The BTC/USD prices soared to their highest levels in approximately two months, up as much as $9,478, following the release of worse than expected Jobless Claims data from the U.S. econoU.S.The recorded unemployed people for the previous week increased to 3839K against the expected 3500K and weighed on the U.S. dollaU.S.
It seems like the BTC/USD prices can remain high for a while now, considering the significantly low-interest rates, which are making dollar weaker versus Bitcoin. It seems like; the Bitcoin can hold in the overbought zone for days or even weeks before a correction ensues.
BTC/USD - Daily Technical Levels
Support Resistance
8,689 9,153
8,479 9,408
8,224 9,618
Pivot Point 8,943
BTC/USD – Daily Forecast
The Bitcoin's immediate resistance holds below 8,840 level, which marks the pivot point of the day. Closing of candles below this level is suggesting odd's of bearish potential bearish retracement in the Bitcoin. On the lower side, Bitcoin may find immediate support at 8,370 level. Violation of this 8.370 can open up additional space for selling until 8,100 and 7,700. The market is extremely volatile. Therefore, a bullish crossover of 9,465 can lead to Bitcoin prices towards 10K psychological mark.
EUR/USD – E.U. Economic Forecasts Ahead
The EUR/USD pair was closed at 1.09785 after placing a high of 1.10186 and a low of 1.09343. Overall the movement of the EUR/USD pair remained bullish throughout the day.
On Friday, euro raised higher for the 3rd consecutive day in spite of the risk-off sentiment in the market. EUR/USD pair has posted gains for five days in the last six days and has recovered some of its losses by moving from 1.072 to 1.101.
The rise of EUR/USD above 1.101 level was due to the weakened U.S. dollar across the board after the release of weaker than expected U.S. manufacturing data. The ISM Manufacturing Purchasing Manager's Index dropped to its lowest level for 11 years on Friday on the back of coronavirus pandemic, which resulted in a contraction in U.S. manufacturing activities by affecting the supply chain across the globe.
In the U.S. session, EUR/USD pair jumped over 1.101 level due to weakened U.S. dollar, but in the European session, it remained steady because of the empty Eurozone Calendar where major European markets were closed for Labor Day.
On Thursday, the ECB left its interest rates unchanged but introduced a new lending program, the initial reaction to this decision of ECB was negative, but in Friday markets were stabilized afterward. On the other hand, the U.S. Federal Reserve also announced two lending programs for Municipal Bonds and Main Street this week.
EUR/USD - Daily Technical Levels
Support Resistance
1.095 1.0977
1.0937 1.0993
1.0922 1.1005
Pivot Point 1.0965
EUR/USD – Daily Forecast
The EUR/USD is trading at 1.09410, exhibiting bullish bias in the wake of the weaker dollar amid worse than expected jobless claims data from the U.S. econoU.S.At the moment, the EUR/USD is entering into the overbought zone. As we see in the chart above, the Stochastics is entering over 80 zones, and this means the bulls can get exhausted soon, and sellers are looming around the corner. The EUR/USD is trading with a bearish bias, falling from 1.0970 area to 1.0940 level. Below this, the pair may open further room for selling until 1.0940, which marks a 38.2% Fibonacci level. Below this, the next support may be found around 1.0890.
GBP/USD - Fibonacci In-play
The GBP/USD pair was closed at 1.24943 after placing a high of 1.26002 and a low of 1.24828. Overall the movement of pair GBP/USD remained bearish throughout the day. The GBP/USD pair came under fresh selling pressure on the last day of the week after posting gains for the last two consecutive days.
At 13:30 GMT, the Final Manufacturing PMI from the United Kingdom was released, which came in line with the expectations of 32.8 and had almost no impact over the pair. The M4 money supply surged to 2.8% against the expectations of 0.2%. The M4 money supply measures the change in the total quantity of money in circulation as well as in the bank's deposits. A sharp increase in the M4 money supply in the month of March supported Sterling on Friday.
The Mortgage Approvals for the month of March dropped to 56K against the forecasted 59K and represented a decreased number of purchased homes during the month, which impacted negatively on the single currency Pound.
Moreover, the Net Lending to individuals in the month of March was reported as 1.0B, which was lesser than the forecasted number of 4.2B, and it also affected Pound in negative ways. Decreased number of Homes purchases and Net Lending caused the pair GBP/USD to move in a downward direction.
Although the Manufacturing PMI of the U.K. exceeded the expectations, it still showed a contraction in the manufacturing sector by falling further in the month of April. It was caused by the coronavirus pandemic, which has created enormous disruptions for the supply chain. This sent the UK PMI from 47.8 in March to 32.6 in April and caused GBP to fall.
GBP/USD - Daily Technical Levels
Support Resistance
1.2436 1.249
1.2416 1.2524
1.2382 1.2544
Pivot Point 1.247
GBP/USD – Daily Forecast
The GBP/USD prices trading sharply bearish, in the wake of stronger U.S. dollar and weaker Sterling bais. The Cable prices have dipped below 1.2470, which marks the pivot point area for Sterling today. Next support is likely to be found around 1.2384, which mark's double top pattern now and closing of candles below this level are indicating odds of bearish retracement, mainly because the Cable is trading in the selling zone. On the lower side, violation of 1.2384 level may extend selling until 1.2309 level while resistance will continue to pressure around 1.2520 today.
Good luck!