Daily F.X. Analysis, May 06 – Series of Eurozone Final Services PMI In Highlights!
By Eaglefx On May 06, 2020 in Daily Market Analysis
dThe U.S. dollar edged higher on the back of better than expected performance of the Services Sector of the United States in April. At 19:00 GMT, the U.S. Institute of Supply Management released PMI for the Non-Manufacturing Industry, which exceeded the expectations of 37.5 and came in as 41.8 and supported the U.S. dollar.
Later today, the eyes will be on the series of low to medium impact Services PMI figures from the Eurozone. Alongside this, the U.S. ADP figures will also help drive some price action in the market during the U.S. session.
Economic Calendar
BTC/USD - Daily Analysis
During the Asian session today, the Bitcoin prices showed a slight bears correction, but the overall trading range remains the same around 8,970/ Before that, the BTC/USD price gained back a significant portion of its losses from Sunday's weekly close retracement, and figures show that within a previous hour the leading cryptocurrency has remained below the $9K mark again.
Despite testing the $8,500 previously, BTC/USD price immediately rebounded and gained support in the $8,700-$8,850 range before spending the bulk of Monday consolidating in this zone.
The BTC/USD prices showed some bearish movement considering a stronger U.S. dollar. However, the dovish monetary policy and low-interest rates from the Federal Reserve are likely to keep the Bitcoin bullish in the wake of potential weakness in USD. 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
8,838 9,176
8,638 9,314
8,501 9,514
Pivot Point 8,976
BTC/USD – Daily Forecast
On Wednesday, the BTCUSD is exhibiting choppy sessions. However, the technical side of the market mostly remains neutral as the Bitcoin is now facing double top resistance around 9,000, and closing of candles above this level is likely to drive more buying in the BTC/USD pair. Continuation of a bullish trend above 9K level can extend buying until 9,200 and 9,380. RSI and EMA also support an upward trend in the market. However, below 9K, the BTC/USD can remain exposed to the 50 EMA, which is likely to support it around 8,615.
EUR/USD – Upward Channel Breakout
The EUR/USD pair was closed at 1.08372 after placing a high of 1.09257 and a low 1.08257. Overall the movement of the EUR/USD pair remained bearish throughout the day.
On Tuesday, EUR/USD fell after the German constitutional court ruled that if the ECB could prove the need for bond purchases, then the Bundesbank must stop it. The ruling by court hit the EUR market hard, which was calmed by the aggressive asset purchases by ECB to prevent the economic crisis caused by a coronavirus.
However, the decision by the court was not applicable for the ECB's latest program against the pandemic worth 750 Billion euro program, which was announced to prop up the economy. As a result of the court decision, the single currency EUR fell about 0.7% to $1.0826. Another factor included in the downward movement of the EUR/USD pair on Tuesday was the poor economic data. The PPI of the European Union showed a decline more than the forecasted and weighed on EUR.
On the other hand, the U.S. dollar edged higher on Tuesday on the back of better than expected performance of the Services Sector of the United States in April. At 19:00 GMT, the U.S. Institute of Supply Management released PMI for the Non-Manufacturing Industry, which exceeded the expectations of 37.5 and came in as 41.8 and supported the U.S. dollar. At 18:45 GMT, the Final Services PMI came almost in line with the expectations of 27.0 and supported the U.S. dollar.
EUR/USD - Daily Technical Levels
Support Resistance
1.0801 1.0902
1.0763 1.0965
1.07 1.1003
Pivot Point 1.0864
EUR/USD – Daily Forecast
The EUR/USD is trading at 1.0833, having completed 61.8% Fibonacci retracement at 1.0833. A bearish breakout of 1.0833 level can lead the EUR/USD prices towards 1.0786, which marks 78.6% Fibonacci level. Below this, the next support stays around 1.0725. On the higher side, resistance holds around 1.0864. The RSI is holding below 50, which is keeping the EUR/USD in a bearish mode while the 50 EMA is also suggesting odds of selling trend in the EUR/USD.
GBP/USD - Fibonacci In-play
The GBP/USD pair was closed at 1.24339 after placing a high of 1.24836 and a low of 1.24202. Overall the currency pair GBP/USD moved sideways throughout the day while holding a bearish trend. The GBP/USD moved in between a consolidated range of 1.2420 and 1.2483 on Tuesday.
The outlook of the GBP/USD pair suggests that traders are confused about how to react over the recent circumstances when COVID-19 has affected the global economy. The latest escalation in the conflicting relationship between U.S. & China has come in a time when the world is already facing a bigger fear named COVID-19. This pandemic has forced the central banks and governments around the globe to respond with monetary & fiscal easing.
Meanwhile, the GDP forecast by the Standard Chartered of the United Kingdom for 2020 was dropped to -6.0%, which was previously forecasted as -3.0%. The expected contraction of GDP in the 1st quarter was reported as 3.4%, while for the second quarter the contraction in GDP is expected to be even large as 12.6%.
On the other hand, at 13:30 GMT, the Final Services PMI came in better than the expectations and supported GBP. Sterling was in demand after the services sector of the U.K. exceeded the forecast of 12.3 and came in as 13.4 in the month of April. This helped GBP/USD to move near 1.248 levels on Tuesday.
GBP/USD - Daily Technical Levels
Support Resistance
1.2409 1.2473
1.2383 1.2511
1.2345 1.2537
Pivot Point 1.2447
GBP/USD – Daily Forecast
The GBP/USD is entering into a selling zone after having violated the 1.2447 pivot point level. On the 4 hour timeframe, the GBP/USD has violated the upward trendline, which was supporting the pair around 1.2435. On the lower side, the Cable is likely to find support around 1.2385 and 1.2309. Considering the RSI and 50 EMA are suggesting chances of selling bias until 1.2385. On the higher side, the GBP/USD prices are likely to find resistance around 1.2470 and 1.2515. Let's look for selling trades below 1.2447 today.
Good luck!