LiteForex Analitics

[Mikhail Kurakin]

WTI Crude Oil: wave analysis

The price may fall.

On the daily chart, a downward correction of the higher level developed as the wave B, and the upward wave C forms, within which the first wave 1 of (1) of C develops. Now, the third wave of the lower level iii of 1 has formed, and a local correction is developing as the wave iv of 1, within which the wave (b) of iv has ended, and the wave (c) of iv is developing. If the assumption is correct, the price will fall to the levels of 57.06–54.69. In this scenario, critical stop loss level is 66.82.

 

[Mikhail Kurakin]

Morning Market Review

EUR/USD

EUR is showing moderate gains against USD, developing the "bullish" momentum that formed the day before, when EUR managed to recover in a thin market. USD remains under pressure against the backdrop of inaction by the US Fed and actively growing inflation in the country. The regulator has repeatedly explained the rapid rise in prices only by temporary phenomena, but the market is beginning to doubt this. Macroeconomic statistics from the US published last Friday supported USD position, but investors are already confident in the recovery of the national economy, so the data did not have any long-term effect. Today, market participants expect the publication of statistics from Germany, which will help assess the prospects for the recovery of the largest economy in Europe.

GBP/USD

GBP is strengthening against USD during today's Asian session, trying to recover from the decline at the end of last week and the timid start of trading on Monday. Market activity remains subdued, while investors expect new drivers to emerge. Macroeconomic statistics from the US released last Friday provided only short-term support to USD, while traders are somewhat disappointed by the vague prospects of the US Fed's monetary policy, which prefers to take a wait-and-see attitude. Today investors will be focused on statistics on the US house price index from S&P/Case-Shiller for March, as well as the April dynamics of new home sales. In addition, a speech by the representative of the Bank of England Silvana Tenreiro is expected.

AUD/USD

AUD is showing ambiguous dynamics against USD during today's Asian session, testing 0.7760 for a breakout. The instrument's positions are strengthening against the backdrop of corrective sentiment for USD, as well as due to the stable positive dynamics in the commodity markets, including the oil market. The minutes of the US Fed meeting released last week underscored the wait-and-see position of the American regulator, which does not seek to curtail the measures to stimulate the economy. According to the Fed Governor Jerome Powell, the national economy will need several more months to reach a plateau, where it would be appropriate to discuss the reduction of support programs. This week, investors expect the publication of American statistics on the dynamics of personal income and spending, which will help assess the current inflationary processes within the economy.

USD/JPY

USD is trading with ambiguous dynamics against JPY in today's Asian session, consolidating near 108.70. Yesterday's trading was marked by a slight decrease in the rate of USD; however, in general, the market sentiment remained practically unchanged. Investors ignore the positive macroeconomic statistics from the US and are focused on the future policy of the US Fed, which refuses to recognize rising inflation as a threat to the national economic recovery. The market also reacted poorly to the speech of the head of the Bank of Japan Haruhiko Kuroda on Monday. The head of the Japanese regulator touched upon the global recovery of the world economy after the coronavirus crisis, warning that the stabilization process would be heterogeneous and could lead to increased economic inequality.

XAU/USD

Gold prices began to decline in trading this morning session, retreating from the highs since the beginning of the year, updated last week. The "bearish" trend is facilitated by technical factors, while the fundamental picture does not change much. Monday trading was characterized by flat dynamics; however, gold received support from the weakening positions of USD and a further decrease in the yield of US Treasury bonds. Additional support for the instrument is still provided by the extremely soft position of the US Fed, which does not consider the possibility of tightening monetary policy in the next few months.

 

[Mikhail Kurakin]

Mastercard Inc.: wave analysis

The price may grow.

On the daily chart, the fifth wave of the higher level (5) develops, within which the wave 3 of (5) forms. Now, the third wave of the lower level iii of 3 is developing, within which the wave (ii) of iii has ended, and the formation of the wave (iii) of iii is beginning. If the assumption is correct, the price will grow to the levels of 450.00–500.00. In this scenario, critical stop loss level is 313.00.

 

[Mikhail Kurakin]

XAU/USD: gold updated local annual highs

Current trend

Gold prices are showing ambiguous dynamics during the Asian session, consolidating at 1900.00.

The day before, the instrument made another attempt to grow, and renewed local highs since the beginning of the year, having received support from the weak positions of USD and a decrease in the yield of US Treasury bonds. However, XAU/USD failed to consolidate at the new levels, and by the close of the daytime session, the pair had lost all the previously gained advantage. Investors closed part of their long positions on the instrument before the publication of updated data on the dynamics of US GDP for Q1 2021 and statistics on the dynamics of orders for durable goods. It is assumed that strong macroeconomic indicators may put additional pressure on the US Fed in the issue of curtailing support measures for the national economy.

Support and resistance

Bollinger Bands in D1 chart show stable growth. The price range is expanding, freeing a path to new local highs since the beginning of the year for the "bulls". MACD indicator is growing preserving a weak buy signal (located above the signal line). Stochastic has been showing fluctuating dynamics near its highs for a long time, reflecting strongly overbought instrument in the ultra-short term.

The appearance of correctional decline is possible in the near future. New positions can be opened only after receiving additional signals from technical indicators.

Resistance levels: 1900.00, 1920.82, 1935.00, 1952.53.

Support levels: 1875.09, 1863.34, 1850.00, 1830.00.

 

[Mikhail Kurakin]

USD/CAD: the pair ends the week with flat dynamics

Current trend

Today during the Asian session, the USD/CAD pair is growing slightly, compensating for the decline yesterday, which prevented the formation of a corrective uptrend in the ultra-short term.

Yesterday’s US positive macroeconomic statistics on Initial Jobless Claims supported the "bullish" sentiment for the dollar; however, USD growth was still limited by the unclear prospects of the US FRS monetary policy. Although several bank representatives admitted that they are ready to discuss curtailing stimulus measures, the department does not plan to rush with them.

On Friday, the market expects the publication of a block of US macroeconomic statistics on the dynamics of personal income and spending for April, which may hint at the future policy of the American regulator.

Support and resistance

On the daily chart, Bollinger Bands reverse into a horizontal plane. The price range practically does not change but it remains spacious enough for the current level of activity for the instrument. The MACD indicator grows, maintaining a relatively strong buy signal (the histogram is above the signal line). Stochastic demonstrates similar dynamics, being located approximately in the center of its working area. However, its current readings are slightly correlated with the real dynamics in the market.

Technical indicators do not contradict the possible resumption of the correctional growth of the US currency soon.

Resistance levels: 1.2143, 1.2200, 1.2245, 1.2300.

Support levels: 1.2060, 1.2000, 1.1930.

 

[Mikhail Kurakin]

EUR/USD: wave analysis

The pair may fall.

On the daily chart, the first wave of the higher level 1 of (3) developed, and a downward correction forms as the second wave 2 of (3). Now, the wave a of 2 has formed, and an upward correction of the lower level has developed as the wave b of 2, within which the wave (c) of b has formed. If the assumption is correct, the pair will fall to the levels of 1.1700–1.1601. In this scenario, critical stop loss level is 1.2350.

 

[Mikhail Kurakin]

PayPal Holdings Inc.: wave analysis

The price may grow.

On the daily chart, the third wave of the higher level (3) develops, within which the wave 3 of (3) formed, and a downward correction developed as the wave 4 of (3). Now, the wave 5 of (3) is developing, within which the wave iv of 5 of the lower level has formed, and the development of the wave v of 5 has started. If the assumption is correct, the price will grow to the levels of 309.59–330.00. In this scenario, critical stop loss level is 234.89.

 

[Mikhail Kurakin]

GBP/USD: pound retreating from record highs

Current trend

The British pound shows ambiguous dynamics against the US dollar during the Asian session on June 2, consolidating near the level of 1.4150.

Yesterday, investors slightly corrected their long positions on the instrument, which was due to the strengthening of the USD positions against the background of the publication of positive US macroeconomic statistics. Thus, the Markit Manufacturing PMI for May rose from 61.5 to 62.1 points, which was better than the market's neutral forecasts. ISM Manufacturing PMI strengthened from 60.7 to 61.2 points, while analysts did not expect any changes in this case either. In turn, UK Manufacturing PMI for May fell for the first time in a long time, decreasing from 66.1 to 65.6 points.

On Wednesday, British investors await the publication of a block of statistics on consumer lending for April. Experts' forecasts are very optimistic and suggest that consumers continue to increase their activity as the epidemiological situation in the country improves.

Support and resistance

On the daily chart, Bollinger Bands are growing slightly. The price range narrows, reflecting the emergence of ambiguous dynamics in the short term. MACD falls, maintaining a fairly strong sell signal (the histogram is below the signal line). Stochastic reversed at the level of 80 and maintains a strong downward trend, signaling in favor of the development of "bearish" dynamics in the ultra-short term.

Resistance levels: 1.4200, 1.4247, 1.4300.
Support levels: 1.4135, 1.4100, 1.4050, 1.4000.

 

[Mikhail Kurakin]

American Express Co.: wave analysis

The price may grow.

On the daily chart, the fifth wave of the higher level (5) develops, within which the wave 3 of (5) forms. Now, the fifth wave of the lower level v of 3 is developing. If the assumption is correct, the price will grow to the levels of 180.00–190.00. In this scenario, critical stop loss level is 150.80.

 

[Mikhail Kurakin]

USD/CAD: the instrument shows an upward trend

Current trend

Today, during the Asian session, the USD/CAD pair is showing an upward trend, developing a strong "bullish" momentum, formed yesterday, when the encouraging May ADP report on US private sector employment came out to the market. The statistics reflected an increase of 978K jobs, which was significantly better than market expectations of 650K. The data for the last month were revised downward from the previous 742K to 654K.

On Friday, traders expect the publication of the final report on the US labor market for May, as well as a speech by the head of the US Federal Reserve Jerome Powell. It is worth noting that the official will speak before the publication of the Ministry of Labor, and therefore one should not expect a quick response from the regulator.

Canada will also show its report on the labor market today but analysts' expectations here are much more modest. It is assumed that the unemployment rate for May will rise from 8.1% to 8.2%, while the change in the number of employees will remain in the red zone at -20K.

Support and resistance

On the daily chart, Bollinger bands are moving flat. The price range widens slightly from above, hindering a more confident uptrend in the short term. The MACD indicator is growing, maintaining a strong buy signal (the histogram is above the signal line). Stochastic demonstrates similar dynamics but that the indicator line is approaching its highs rather quickly.

Resistance levels: 1.2143, 1.2200, 1.2245, 1.2300.

Support levels: 1.2060, 1.2000, 1.1930.

 

[Mikhail Kurakin]

Walt Disney Co.: wave analysis

The price may grow.

On the daily chart, a downward correction of the higher level developed as the fourth wave (4), and the fifth wave (5) develops. Now, the third wave of the lower level 3 of (5) has formed, a downward correction has ended as the wave 4 of (5), and the development of the wave 5 of (5) has started. If the assumption is correct, the price will grow to the levels of 202.98–220.00. In this scenario, critical stop loss level is 166.66.

 

[Mikhail Kurakin]

XAU/USD: gold is consolidating near 1900.00 again

Current trend

Gold prices are consolidating near 1900.00 in the morning session after a moderate increase the day before, which was supported by the weakness of USD. The US currency remains under significant pressure after last Friday's US labor market report for May reflected slower-than-expected growth in Nonfarm Payrolls.

This week, traders are awaiting the publication of data on the dynamics of consumer inflation in the US in order to try to put together the big picture and predict the course of monetary policy from the US Fed. It is likely that the American regulator will again maintain a wait-and-see attitude, saying that inflation is facilitated by the active period of economic recovery after the pandemic.

Support and resistance

Bollinger Bands are showing insignificant growth on the daily chart. The price range is narrowing from below, indicating a multidirectional nature of trading in the short term. The MACD indicator is going down, maintaining a weak sell signal (the histogram is below the signal line). Stochastic, on the other hand, maintains a confident upward direction and is rapidly approaching its highs, which indicates the risks of an overbought instrument in the ultra-short term.

Existing long positions should be held until the signals from technical indicators are clarified.

Resistance levels: 1900.00, 1916.36, 1935.00, 1952.53.

Support levels: 1882.10, 1863.34, 1850.00, 1830.00.

 

[Mikhail Kurakin]

WTI Crude Oil: oil renews record highs

Current trend

Today, during the Asian session, prices for WTI Crude Oil are growing moderately, consolidating above the psychological level of $70 per barrel.

Positive dynamics are taking place against a certain lull in the market, as investors prefer to wait for the appearance of a block of macroeconomic statistics on US consumer inflation. Next week, the next meeting of the US Federal Reserve System will take place, at which, as some experts expect, preliminary discussions of a gradual tightening of monetary policy in the country may begin.

Additional support for the instrument was provided by the API report on oil reserves in American warehouses published on Tuesday. For the week of June 4, oil reserves decreased by 2.108M barrels after falling by 5.36M barrels over the previous period. Markets are awaiting the release of the final report on oil reserves from the US Department of Energy on Wednesday. Forecasts assume a decline of 3.576M barrels after a decrease of 5.08M barrels earlier.

Support and resistance

Bollinger bands grow steadily on the daily chart. The price range actively decreases, indicating the risks of the instrument being overbought in the nearest time intervals. MACD grows, maintaining a strong buy signal (the histogram is above the signal line). Stochastic, having approached its highs, reversed into a horizontal plane, signaling that the instrument is overbought in the ultra-short term.

It is better to keep current long positions until the signals from technical indicators are clarified.

Resistance levels: 71.00, 71.80, 73.00.
Support levels: 70.00, 69.08, 68.15, 67.00, 65.74.

 

[Mikhail Kurakin]

Altria Group Inc.: wave analysis

The price may grow.

On the daily chart, the first wave of the higher level (1) develops, within which the wave 3 of (1) forms. Now, the third wave of the lower level iii of 3 has formed, a local correction has ended as the fourth wave iv of 3, and the wave v of 3 is developing. If the assumption is correct, the price will grow to the levels of 55.00–57.50. In this scenario, critical stop loss level is 45.22.

 

[Mikhail Kurakin]

Microsoft Corp.: wave analysis

The price may grow.

On the daily chart, the fifth wave of the higher level (5) of 3 develops, within which the wave 3 of (5) forms. Now, the third wave of the lower level iii of 3 has developed, a local correction has formed as the fourth wave iv of 3, and the development of the fifth wave v of 3 has started. If the assumption is correct, the price will grow to the levels of 285.00–300.00. In this scenario, critical stop loss level is 236.34.

 

[Mikhail Kurakin]

USD/CHF: waiting for the US-Russia presidents’ summit

Current trend

The USD/CHF pair grows due to a slight USD increase, trading at the level of 0.8993.

Tomorrow in Geneva, within the framework of the Russia-US summit, a personal meeting of Presidents Vladimir Putin and Joe Biden will be, where the parties, among other issues, will discuss the prospects for the development of bilateral relations. Before it, the volatility in the global markets dropped significantly, and the main instruments move without a pronounced trend. CHF is at the levels of the beginning of the week and did not react in any way to yesterday's May PPI, which rose by 0.8% MoM and by 3.2% YoY.

USD Index moves in an extremely narrow sideways channel around 90.500, which is the upper border of a wide channel that has been forming for almost a month. Also to the upcoming talks in Geneva, investors are looking forward to today's release of US retail sales data for May, which could decline by 0.7%. On Tuesday, there are also data on industrial production, which are not expected to change. In general, no serious instrument movement before the start of the summit is expected, and the USD/CHF pair may continue trading at current levels.

Support and resistance

Globally, the price corrects upwards. Technical indicators keep a sell signal but reflect a correction: Alligator indicator’s EMA fluctuations range narrows, and the AO oscillator histogram, being in the sell zone, approaches the transition level.

Resistance levels: 0.9036, 0.9138.
Support levels: 0.8930, 0.8829.

 

[Mikhail Kurakin]

JP Morgan Chase Co.: wave analysis

The price is in a correction, a fall is possible.

On the daily chart, the fifth wave of the higher level (5) forms, within which the wave 3 of (5) ended. Now, a downward correction has started to develop as the fourth wave 4 of (5). If the assumption is correct, the price will fall to the levels of 138.46–129.29. In this scenario, critical stop loss level is 167.46.

 

[Mikhail Kurakin]

American Express Co.: wave analysis

The price may grow.

On the daily chart, the fifth wave of the higher level (5) develops, within which the wave 3 of (5) forms. Now, the fifth wave of the lower level v of 3 is developing. If the assumption is correct, the price will grow to the levels of 180.00–190.00. In this scenario, critical stop loss level is 150.80.

 

[Mikhail Kurakin]

USD/JPY: the yen leads against the dollar again

Current trend

The USD/JPY pair moves ambiguously, trading around the level of 110.16.

JPY took the lead in the instrument after the Bank of Japan meeting on monetary policy ended this morning. As expected by most experts, all parameters were almost unanimously extended for the next 6 months. The interest rate will remain at –0.10%, and the program for the purchase of exchange-traded funds and trusts (J-REIT) has been extended with an upper limit of about 12T yen. Until March 2022, the bank will buy corporate bonds with an upper limit of up to 20T yen. The regulator's actions were expected, as economic activity in Japan is still at extremely low levels.

As for the American economy, the pace of recovery remains strong but the country has not been able to solve its most important problem – the decline in the labor market. Initial jobless claims were significantly higher than forecast again. Analysts had expected a reduction to 359K but the figure rose to 412K, and the total number of beneficiaries rose to 3.518M from 3.430M a week earlier. So, the labor market is the main deterrent to USD strengthening.

Support and resistance

The price moves within the ascending channel. Technical indicators keep a buy signal: the range of fluctuations in the EMA on the Alligator indicator is directed upwards, and the histogram of the AO oscillator is above the zero line.

Support levels: 109.22, 107.83.
Resistance levels: 110.75, 112.00.

 

[Mikhail Kurakin]

Walt Disney Co.: wave analysis

The price may grow.

On the daily chart, a downward correction of the higher level developed as the fourth wave (4), and the fifth wave (5) develops. Now, the third wave of the lower level 3 of (5) has formed, a downward correction has ended as the wave 4 of (5), and the development of the wave 5 of (5) has started, within which the wave i of 5 is forming. If the assumption is correct, the price will grow to the levels of 202.98–220.00. In this scenario, critical stop loss level is 166.66.