EURJPY TECHS: Recovery Extends
- RES 4: 171.99 2.0% 10-dma envelope
- RES 3: 171.56 High Apr 29 and the bull trigger
- RES 2: 170.65 0.618 proj of the May 3 - 15 - 16 price swing
- RES 1: 169.94 High May 21
- PRICE: 169.68 @ 17:08 BST May 22
- SUP 1: 167.63 20-day EMA
- SUP 2: 166.07 Trendline support drawn from the Dec 7 ‘23 low
- SUP 3: 165.73 50-day EMA
- SUP 4: 164.02 Low May 3
EURJPY has recovered from last Thursday’s low and is trading higher this week. The medium-term trend structure is bullish and sights are on 171.56, the Apr 29 high and key resistance. Initial support at the 20-day EMA, at 167.63, remains intact. Key trendline support drawn from the Dec 7 ‘23 low, lies at 166.07. A clear break of this line would highlight a stronger reversal and initially expose support at the 50-day EMA, at 165.73.
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EURJPY TECHS: Trend Needle Points North
- RES 4: 167.69 2.0% 10-dma envelope
- RES 3: 166.00 Round number resistance
- RES 2: 165.35 High Mar 20 and the bull trigger
- RES 1: 165.17 High Apr 09
- PRICE: 164.68 @ 15:33 BST Apr 22
- SUP 1: 163.68/162.28 Trendline from Dec 7 ‘23 low / Low Apr 12
- SUP 2: 161.07 Low Mar 15
- SUP 3: 160.72 38.2% retracement of the Dec 7 ‘23 - Mar 20 rally
- SUP 4: 160.22 Low Mar 11
The trend condition in EURJPY remains bullish and this is reinforced by the fact that the cross remains above key support at 163.68 - a trendline drawn from the Dec 7 ‘23 low. This line has recently been pierced. A clear break of it is required to signal a short-term reversal and this would also highlight a breach of the 50-day EMA, at 163.01. For bulls, key resistance is unchanged at 165.35, the Mar 20 high.
CANADA: GS Push USDCAD Forecasts Higher
Goldman Sachs late last week revised their USDCAD forecasts from 1.34, 1.32 and 1.30 in three-, six- and 12-months to 1.40, 1.38 and 1.36.
- Last Tuesday’s events appear a big driver: “Core inflation is now below 2% on a 3-month annualized basis. Barring any surprises in the April inflation data, a June cut looks very likely.”
- “Governor Macklem’s conversation with Fed Chair Powell this week put into sharp relief the difference between the economic backdrops in Canada and the US.”
- “BoC and Fed policy can diverge, and we think it is likely they will, given that the backdrop calls for diverging policy paths.”
- “This also takes into account our view that USD depreciation has been delayed”, noting separately that “long Dollar calls still represent good hedges against geopolitical and inflation risks.”
US STOCKS: Late Equities Roundup: Chip Stocks, Banks Continue to Buoy Market
- Stocks continued to gain in the second half, rising back to early Thursday levels in late Monday trade with banks and microchip stocks outperforming. Currently, DJIA is up 449.85 points (1.18%) at 38435.65, S&P E-Minis up 72.5 points (1.45%) at 5076, Nasdaq up 254.2 points (1.7%) at 15535.9.
- Information Technology and Financial sectors led gainers in the second half, IT buoyed by chip stocks as they recovered from better selling late last week: Nvidia +4.64%, Enphase +3.69%, Seagate +3.08%. Banks supporting the former: Truist +3.89%, Citigroup +2.93%, Bank of America +2.41%.
- Laggers: Materials and Real Estate sectors underperformed late, metals and mining stocks weighed on the former as Gold prices tumbled over $63.0 in late trade: Newmont -3.66%, Freeport McMoRan -0.43%. Meanwhile, real estate investment trusts weighed on the latter: Crown Castle -0.12%, Ventas -0.07%, Digital Realty Trust +0.2%.
- Corporate earnings: Verizon and Albertsons announced ahead of the open, Nucor, Alexandria Real Estate, Globe Life after the close. Expected Tuesday: Pepsico, UPS, GM, Halliburton, Philip Morris, Pulte, Freeport McMoRan, Lockheed Martin, JetBlue, GE, Kimberly-Clark, Sherwin-Williams, Baker Hughes, Tesla, Texas Instruments, Visa, Enphase, Seagate.
