Daily F.X.Analysis, May 12 – Mixed Risk Sentiments In-Play, Eyes on U.S. Retail Sales! 

During the last week on Friday, the data from the U.S. showed the unemployment rate climbed to 14.7% from the expected 16% and again supported the U.S. dollar. The Average Hourly Earnings from the U.S. also increased to 4.7% from expected0.5% and supported the dollar.

On the news front, the eyes will remain on the European industrial production figures, but the event is a medium impact, and it may not drive sharp selling or buying in the market today.

Economic Calendar     

 BTC/USD - Daily Analysis

Yesterday, the BTC/USD opened with a vast gap, falling sharply below 10K psychological resistance level to 8,500 support zone. Currently, the leading crypto pair is gaining support at this level and has closed a Doji candle above the 8,500 level. 

The BTC/USD prices have declined towards the $8,000 support mark after being discarded from the psychological $10,000 resistance mark during the weekend. Looking forward to this week, the BTCUSD sellers seem dominant, and they may target the $6,500 mark if they can drive a violation of BTC price below the $8,000 support zone this week. 

The BTCUSD is particularly bullish while trading over the $8,700 mark, key resistance is located at the $9,400 and the $10,000 marks. If the BTCUSD pair trades beneath the $8,700, sellers may examine the $8,000 and $7,000 support marks.

At the moment, the volatility in the leading cryptocurrency is notably high. Nevertheless, from a technical perspective, Bitcoin's downside is maintained by the assembly created by the 61.8% Fibonacci level and the 200-day SMA. Today, a bearish breakout of 8,500 level may extend selling bias until the next support level of 8,230. 

BTC/USD - Daily Technical Levels

Support Resistance 

8,054       9,485

7,376      10,239

6,622     10,917

Pivot Point 8,808

BTC/USD – Daily Forecast

The BTC/USD hasn't changed much as the huge gap continues to stay there. The Bitcoin has dropped sharply below 10K psychological resistance level to 8,500 support zone. Currently, the BTC/USD prices are gaining support above 8,400 level and 8,100 level. Today, bearish breakout and closing of candles below 8,450 level may extend selling bias until the next support level of 8,120. However, if Bitcoin continues to close candles above the 8,500 level, we may see bullish correction until the 9,000 level.

EUR/USD – RSI & EMA Extends Resistance  

The EUR/USD currency pair flashing red but still trading above 1.0802, having hit a low of 1.0784 early on the day, and the prospectus of shared currency bullish bias during the next session seem eased mainly due to the broad-based U.S. dollar strength in the wake of risk-off market sentiment. The second wave of coronavirus also weighed on the currency pair. 

The European Union has raised concerns over a lack of progress in negotiations and blamed the U.K. for prioritizing its interests over the mutual issues. Only seven months have left to reach a deal with E.U. before December 31, and Britain is showing a delayed approach towards negotiations.

As European Union has tried to negotiate a new trade deal with United Kingdom, France and the Netherland have joined forces to urge the European Union to impose labor and environmental standards more forcefully with the countries it signed trade deals with. The initiative came amid the concerns that the U.K. might seek E.U. to undercut the labor and environmental standards for boosting its competitiveness.

The European Dairy Association has issued a framework set out for future EU-UK trade. The framework issued by EDA consists of "rules of origin," which are the criteria used within the World Trade Organization to define where a product was made. After Brexit, U.K. will become a third country where rules of origin will apply for trade between E.U. & U.K.

Meanwhile, the largest country of Europe has reported a decreased number of deaths from the virus on Monday as it has proceeded with the gradual easing of restrictions. However, the fear of the second wave of coronavirus is still there, and it has created a risk-on sentiment in the market.

EUR/USD - Daily Technical Levels

Support Resistance 

1.0789      1.084

1.0769      1.0871

1.0738      1.089

Pivot Point 1.082

EUR/USD – Daily Forecast 

The EUR/USD is trading at 1.0820, holding mostly below an intraday pivot point resistance level of 1.082. A bearish breakout of 1.082 level can lead the EUR/USD prices towards the next support area of 1.07630, which marks the double bottom level. Below this, the next support holds 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. Consider staying bearish below 1.082 today, while buying can also be seen above this level today.

GBP/USD - Downward Channel In-Play

During Tuesday's Asian trading hours, the GBP/USD currency pair erases its early-day losses but still trading bearish while taking rounds near the 1.2326 as the broad-based U.S. dollar returned from the multi-day high. However, the currency pair hit the low of 1.2288 earlier in the morning, mainly due to the risk-off market sentiment in the wake of the second wave of the virus. 

This weighed on single currency British Pound on Monday in early sessions. Furthermore, the PM Boris Johnson on Monday released a 50-page document that contained the details about more relaxed coronavirus lockdown measures. He further said that a guideline for maintaining social distancing in the workplace would be given out late Monday.

The easing of lockdown by the U.K. government was not only criticized by the group of companies but also by devolved nations like Scotland and Wales. The previous message from the Tory government of "Stay at home, protect the NHS, save lives" was now converted into "Stay alert, control the virus, save lives." 

The new "stay alert" warning from the UK PM Boris Johnson was widely criticized as confused and nonsensical. The question has been raised against it like, why change the message if the situation has not changed? 

Most criticisms were based on the fact that people should be provided with a crystal clear and straight messages that cannot be misinterpreted or misunderstood. 

On the other hand, the greenback remained supportive of the increased U.S. Treasury Yields and increasing U.S. Dollar Index. The DXY erased its losses and recovered 1.2% on the day and reached to 100.27.

On the data front, there was no data to be published from the Britain side on Monday, but on Wednesday, the preliminary first-quarter GDP data from the U.K. will be under consideration by U.K. traders.

GBP/USD - Daily Technical Levels

Support Resistance 

1.2268      1.2422

1.2198      1.2508

1.2113       1.2577

Pivot Point 1.2353

GBP/USD – Daily Forecast

The GBP/USD is trading in a sideways range in between 1.2350 - 1.2285, holding below 50 EMA, which is extending resistance at 1.2400. The GBP/USD prices are holding the right blow daily pivot point level of 1.2353, which is suggesting odds of the bearish trend in the Cable. 

In case, the Cable violate 1.2353 level, we may see GBP/USD prices heading towards 1.2435 and 1.2530. The RSI and 50 EMA are suggesting the chances of a selling bias today. On the lower side, the GBP/USD prices are likely to find support at around 1.2310 and 1.2204. Let's look for selling trades below 1.2400 and buying above the same level today. 

Good luck!