Weekly Technical Analysis with Candlestick Charts – 8 May, 2022

Weekly Technical Analysis with Candlestick Charts – 8 May, 2022

Technical Analysis

WEEKLY SNAPSHOT

Manufacturing PMI (Apr), U.K.

WHEN: 03rd May 2022                                                   WHAT IT HAD INFLUENCED: GBP and its subsequent pairs.

WHAT HAPPENED: The Manufacturing Purchasing Mangers’ Index (PMI) is a diffusion index incorporating survey results provided by manufacturing firms throughout the country. A reading above fifty suggests the manufacturing sector is expanding, while a reading below fifty suggests the manufacturing sector is in contraction.

GBP/USD is trading in a downward channel. Further downside movement can be seen in the coming weeks.

Unemployment Rate (Apr), U.S.

WHEN: 06th May 2022                                                    WHAT IT HAD INFLUENCED: USD and its subsequent pairs.

WHAT HAPPENED: The unemployment rate measures the percentage of the total work force that is not working, yet actively seeking employment. A reading that is higher than forecast is generally negative (bearish) for the USD, while a lower than forecast reading is generally supportive (bullish) for the USD.

USD/CHF is trading in an upward channel. Further upside movement can be seen in the coming weeks.

German Unemployment Change (Apr), Eurozone

WHEN: 03rd May 2022                                                   WHAT IT HAD INFLUENCED: EUR and its subsequent pairs.

WHAT HAPPENED: German unemployment change measures the change in the number of unemployed people during the prior month. A reading that is higher than forecast is generally negative (bearish) for the EUR, while a lower than forecast reading is generally positive (bullish) for the EUR.

EUR/USD is trading in a downward channel. Further downside movement can be seen in the coming weeks.

Employment Change (Apr), Canada

WHEN: 06th May 2022                                                   WHAT IT HAD INFLUENCED: CAD and its subsequent pairs.

WHAT HAPPENED: Employment change reports the change in the number of people employed versus the prior month. Job creation is an important indicator of consumer spending. A reading that is stronger than forecast is generally supportive (bullish) for the CAD, while a weaker than forecast reading is generally negative (bearish) for the CAD.

CAD/JPY is trading in an upward channel. Further upside movement can be seen in the coming weeks.

Retail Sales (MoM) (Mar), Australia

WHEN: 04th May 2022                                                   WHAT IT HAD INFLUENCED: AUD and its subsequent pairs.

WHAT HAPPENED: Retail sales gauges the change in aggregate value of sales at the retail level across the country. It is an important indicator of consumer spending accounting for the majority of overall economic activity. A reading that is stronger than forecast is generally supportive (bullish) for the AUD, while a weaker than forecast reading is generally negative (bearish) for the AUD.

AUD/USD is trading in a downward channel. Further downside can be seen in the coming weeks

Gold prices declined moderately this week after Wednesday’s rate hike.

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED:  Gold prices closed moderately lower this week. It fell sharply at the beginning of the week and touched its weakest level since mid-February at $1,850. The yellow metal staged a rebound in the second half of the week. However, the dollar strength didn’t allow gold to snap its two-week losing streak.

As the greenback strengthened on Monday, gold prices fell around 2%, closing at $1836.3. Ahead of the US Federal Reserve’s policy announcement on Wednesday, the market remains relatively quiet on Tuesday, closing above the previous day’s (Monday’s) close. On Wednesday, the FOMC hiked its policy rate by 50 bps. The Fed chairman Jerome Powell dismissed the possibility of a more aggressive 75 bps rate hike. This Fed’s comment led to a rebound in gold prices, with the greenback coming under intense selling pressure. With the dollar selloff picking up steam, the price of gold climbed to a five-day high of $1910 but ended up closing negatively at $1875. Gold prices end the week on a bullish note, closing at $1882.

The immediate support and resistance are seen at the $1860 and $1900 – levels.

Gold is trading in a downward channel. Further downside is seen in the coming weeks.

Crude oil posts another weekly gain on supply concerns.

WHAT IT HAD INFLUENCED:

WTI CRUDE OIL

WHAT HAPPENED: Chicago WTI crude oil futures open the week on a bullish note, closing at $105 per barrel. It, however, declined around 2% on Tuesday as demand worries stem from China’s prolonged COVID-19 lockdowns. Prices advanced on Wednesday as the EU president Ursula Von der Leyen called on the member nations to phase out Russian crude imports within 6 months and refined products by the end of 2022. The proposed ban on Russian oil drove oil prices higher as the demand worries of the top importer China were offset by plans of the world’s largest trading bloc, the EU, to phase out Russian energy imports. Prices rose further on Friday, posting a second straight weekly gain as impending EU sanctions on Russian oil raised the prospect of tighter supply. While weak economic growth outlook and stringent lockdown measures in China act as a headwind for crude oil prices.

The immediate support and resistance are seen at the $107 and $111 – levels.

Chicago crude oil price has broken out above its previous symmetrical triangle and is currently trading in an upward channel. Further upside is seen in the coming weeks.

Bitcoin prices hit a new two-month as prices decline for the 6th consecutive weeks 

WHAT IT HAD INFLUENCED:

BITCOIN

WHAT HAPPENED: Bitcoin opened the week with a bullish Doji candle, indicating indecisiveness among market participants, gaining a meager 0.10% on Monday. The crypto market didn’t cash in the market momentum of the US indices growth during the closing period on Monday. Investors were reluctant to take fresh, new positions as they awaited the Fed’s Wednesday rate hike announcement. Prices gained on Wednesday as the Fed’s chairman Jerome Powell announced that the more aggressive rate hike of 75 bps was off the table. It, however, suffered a massive setback on Thursday, falling around 7.5% as the volatility bought on by the Fed’s action on Wednesday crashed the stock and cryptocurrency market. Prices stabilized on Friday at about $36,000, trading with low volatility. Bitcoin prices seemed poised for a bearish week, marking this the 6th consecutive bearish week.

The immediate support and resistance are seen at $35,330 and $37,500 – levels.

BTCUSD is trading in a downward channel. Further downside is seen in the coming weeks.

5 KEY EVENTS TO WATCH OUT

GDP (QoQ) (Q1), U.K.

WHEN: 12th May 2022                                                   WHAT IT HAD INFLUENCED: GBP and its subsequent pairs.

WHAT’S HAPPENING: Gross Domestic Product (GDP) gauges the inflation-adjusted value of all goods and services produced within the economy. It is the most comprehensive measure of economic activity and an important indicator of economic health.

A reading that is stronger than forecast is generally supportive (bullish) for the GBP, while a weaker than forecast reading is generally negative (bearish) for the GBP.

Core CPI (MoM) (Apr), U.S.

WHEN: 11th May 2022                                                   WHAT IT HAD INFLUENCED: USD and its subsequent pairs.

WHAT’S HAPPENING:  The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The Central bank pays very close attention to this figure in its role of maintaining price stability. Because the Fed believes that core inflation is a better gauge of underlying price pressures, it is more closely watched than overall inflation which tends to be more volatile.

A reading that is stronger than forecast is generally supportive (bullish) for the USD, while a weaker than forecast reading is generally negative (bearish) for the USD.

German ZEW Economic Sentiment (May), Eurozone

WHEN: 10th May 2022                                                   WHAT IT HAD INFLUENCED: EUR and its subsequent pairs.

WHAT’S HAPPENING: The German Zentrum für Europäische Wirtschaftsforschung (ZEW) Economic Sentiment Index gauges the six-month economic outlook. A level above zero indicates optimism; below indicates pessimism. The reading is compiled from a survey of about 350 German institutional investors and analysts.

A reading that is stronger than forecast is generally supportive (bullish) for the EUR, while a weaker than forecast reading is generally negative (bearish) for the EUR.

Building Permits (MoM) (Mar), Canada

WHEN: 09th May 2022                                                   WHAT IT HAD INFLUENCED: CAD and its subsequent pairs.

WHAT’S HAPPENING: Building Permits reports the change in the quantity of new building permits issued by the government relative the prior month. Building permits are an important leading indicator of housing starts.

A reading that is stronger than forecast is generally supportive (bullish) for the CAD, while a weaker than forecast reading is generally negative (bearish) for the CAD.

NAB Business Confidence (Apr), Australia

WHEN: 10th May 2022                                                   WHAT IT HAD INFLUENCED: AUD and its subsequent pairs.

WHAT’S HAPPENING: The National Australia Bank (NAB) Business Confidence Index rates the current level of business conditions in Australia. Changes in business sentiment can be an early signal of future economic activity such as spending, hiring, and investment. The index is based on data collected from a survey of around 350 companies. A level above zero indicates improving conditions; below indicates worsening conditions.

A higher-than-expected reading should be taken as positive/bullish for the AUD, while a lower-than-expected reading should be taken as negative/bearish for the AUD.

EQUITIES IN THE COMING WEEK

1. Duke Energy (DUK) is expected to announce its quarterly result on 09th May 2022, EPS is estimated to be $1.33 per share while revenue is estimated to be 5.69B.

2. Baidu (BIDU) is expected to announce its quarterly result on 09th May 2022, EPS is estimated to be $5.09 per share while revenue is estimated to be 27.89B.

3. Electronic Arts (EA) is expected to announce its quarterly result on 10th May 2022, EPS is estimated to be $1.43 per share while revenue is forecasted to be 1.77B.

4. Walt Disney (DIS) is expected to announce its quarterly result on 11th May 2022, EPS is estimated to be $1.19 per share while revenue is forecasted to be 20.08B.

5. Motorola (MSI) is expected to announce its quarterly result on 12th May 2022, EPS is estimated to be $1.58 per share while revenue is forecasted to be 1.83B.

TOP COMMODITIES IN THE COMING WEEK

GOLD

Technical Analysis

GOLD is trading in a downward channel. Further downside is seen in the coming weeks.

SILVER

Technical Analysis

SILVER is trading in a downward channel. Further downside is seen in the coming weeks.

WTI CRUDE OIL

Technical Analysis

WTI Crude Oil is trading in an upward channel. Further upside is seen in the coming weeks.

TOP CRYPTO IN THE COMING WEEK

BTCUSD

Technical Analysis

BTCUSD is trading in a downward channel. Further downside is seen in the coming weeks.

ETHEREUM

Technical Analysis

ETHEREUM is trading in a downward channel. Further downside is seen in the coming weeks.

TOP CURRENCY IN THE COMING WEEK

EURUSD

Technical Analysis

EURUSD is trading in a downward channel. Further downside is seen in the coming weeks.

GBPUSD

Technical Analysis

GBPUSD has broken down further below its previous downward channel. Further downside is seen in the coming weeks.

EURJPY

Technical Analysis

EURJPY is trading in an upward channel. Further upside is seen in the coming weeks.

TOP INDEX IN THE COMING WEEK

NASDAQ 100

Technical Analysis

NASDAQ 100 is trading in a downward channel. Further downside is seen in the coming weeks.

S&P 500

Technical Analysis

S&P 500 is trading in a downward channel. Further downside is seen in the coming weeks.

DATA WATCH

TimeCurrencyEventForecastPrevious
Monday, May 09, 2022    
18:00CADBuilding Permits (MoM) (Mar)21.00%
Tuesday, May 10, 2022    
14:30EURGerman ZEW Economic Sentiment (May)-42.5-41
07:00AUDNAB Business Confidence (Apr)16
Wednesday, May 11, 2022    
13:30EURECB President Lagarde Speaks
18:00USDCore CPI (MoM) (Apr)0.40%0.30%
20:00USDCrude Oil Inventories-0.829M1.302M
Thursday, May 12, 2022    
11:30GBPGDP (QoQ) (Q1)1.00%1.30%
11:30GBPGDP (YoY) (Q1)9.00%6.60%
11:30GBPManufacturing Production (MoM) (Mar)-0.50%-0.40%
11:30GBPGDP (MoM)0.10%
11:30GBPMonthly GDP 3M/3M Change1.00%
18:00USDPPI (MoM) (Apr)0.50%1.40%
18:00USDInitial Jobless Claims200K

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