Daily F.X. Analysis, May 05 – ISM Non-Manufacturing PMI In focus!

On Tuesday, the research firm Markit will report final readings of April Services PMI for the U.K. (12.3 expected) and the U.S. (27.0 expected). The European Commission will post March PPI (-2.7% on year expected). The U.S. Commerce Department will release March's trade balance (44.2 billion dollars deficit expected). The Institute for Supply Management will publish its Non-manufacturing Index for April (37.8 expected).

Economic Calendar     

BTC/USD - Daily Analysis

During the Asian session, the BTC/USD prices rose to break over the major resistance areas and to trade around $8,943. 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 is trading around 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. dollar.

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 BTCUSD prices are on a bullish run, as just now, the Bitcoin prices have violated the double top resistance level of 8,969, and closing of candles above this level is likely to drive more buying in the BTC/USD pair. Continuation of a bullish trend above 8,969 level can extend buying until 9,200 and 9,380. RSI and EMA also support an upward trend in the market. While the recent candle close on the 4-hour timeframe is also bullish engulfing, bullish bias can be seen in the BTC/USD today.

EUR/USD – Upward Channel Breakout

 the EUR/USD pair was closed at 1.09035 after placing a high of 1.09738 and a low of 1.08954. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair dropped on Monday amid the risk-off market sentiment after the U.S. administration accused China of holding the information from the rest of the world, which ultimately led to the global pandemic of coronavirus.

The World Health Organization has confirmed that it has not received any evidence from the U.S. administration about the speculations of the Wuhan laboratory. The WHO response came in after the U.S. Secretary of State Mike Pompeo said that there were huge shreds of evidence that the coronavirus was originated in the Wuhan laboratory. 

However, according to the U.S. intelligence agency report, the COVID-19 was not a man-made virus. For the start of the new month, the U.S. dollar remained strong across the board and caused its rival currencies like EUR to move in a downward direction. On Monday, the EUR/USD pair dropped below 1.090 level on the back of weak PMI from the whole bloc.

At 12:15 GMT, the Spanish Manufacturing PMI for the month of April showed a contraction in the manufacturing sector of Spain when it came in as 30.8 against the expectations of 35.0. At 12:45 GMT, the Italian Manufacturing PMI exceeded the expectations of 30.3 but still showed contraction when it came in as 31.3 and weighed on EUR.

At 12:50 GMT, the French Final Manufacturing PMI came in line with the expectations of 31.5 for the month of April and represented a contraction in manufacturing activities in France. At 12:55 GMT, the German Final Manufacturing PMI showed a decline in the manufacturing sector of Germany when it came in line with the expected 34.5. At 13:00, the Final Manufacturing PMI for the whole bloc was released, which also showed a contraction by 33.4 points of the index. 

EUR/USD - Daily Technical Levels

Support Resistance 

1.0896      1.0912

1.0891      1.0921

1.0881     1.0927

Pivot Point 1.0906

EUR/USD – Daily Forecast

The EUR/USD is trading at 1.0890, exhibiting bearish bias in the wake of the stronger dollar and weaker Euro. At the moment, the EUR/USD is entering into the selling zone as we cane in the chart above, the Stochastics is crossing below 50 zones. This means the bulls are exhausted, and sellers have entered the market. The EUR/USD is trading with a bearish bias, falling from 1.0906 area to 1.0890 level. Below this, the pair may open further room for selling until 1.0830, which marks a 61.8% Fibonacci level. Below this, the next support can be found around 1.0800.

GBP/USD - Fibonacci In-play

The GBP/USD pair was closed at 1.24416 after placing a high of 1.24854 and a low of 1.24051. Overall the movement of GBP/USD pair remained bearish throughout the day. It is only the second trading day of May, and Sterling has already lost all of its April gains. April was the positive month for Pound, which was derived by the new U.K. tax year and corporate dividend deportation of overseas income. But May seems to be a month for Pound where dollar's strength would decide the movement of under-performed Sterling.

Throughout April, Sterling underperformed and picked up its pace at the end of the month due to the weakness of the U.S. dollar across the board. The fall of Pound was caused after it was confirmed that the U.K. was the worst-hit country by the coronavirus pandemic in Europe. This was confirmed after the day-to-day testing of COVID-19 was conducted throughout April.

However, U.K.'s Prime Minister Boris Johnson at the end of April announced to come up with a comprehensive plan on how to restart the economy and restart the schools and hospitals and transports to bring back the normal life. This gave hopes to Britain about the easing of lockdown and better economic conditions. 

GBP/USD - Daily Technical Levels

Support Resistance 

1.2449      1.247

1.244        1.2482

1.2427      1.2491

Pivot Point 1.2461

GBP/USD – Daily Forecast

The GBP/USD is recovering from earlier losses as it's the price has bounced off from 1.2406 level. The Cable price has retraced higher to complete 23.8% Fibonacci retracement at 1.2461 level, which also marks the pivot point area for Sterling today. Next support is expected 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!