30 April 2018 Weekly Analysis
GCMAsia Weekly Report: April 30 – May 4
Market Review (Forex): April 23 – 27
US dollar retraced slightly during late Friday trading hours albeit remained support due to better-than-expected economic data from the region. The dollar index dipped 0.03% while closing the week round 91.53 against a basket of six major currencies.
Although some investors began to cash in their profits, the downside on the currency remains limited as dollar-bull continues to lend their support on the currency. The US 10-year Treasury yield which has pushed above 3% for the first-time last week is a sign of increasing market confidence towards the outlook of US economy in the future.
From the economic front, US Gross Domestic Product came in higher-than-expected with 2.3% for the first quarter of 2018. Although the reading has marked a slowdown from prior quarter of 2.9%, it has attained the best start for the year since 2015 while exceeding economist forecast for an even slower expansion with only 2.0%.
As of now, investors will be paying close attention on US monetary policy meeting due next week although Federal Reserve is unlikely to raise interest rates at the conclusion of two-day meeting. Thus, the central bank statement will be closely scrutinized amid speculation for a more frequent rate hike due to optimistic economic performance from the region.
US GDP Growth Rate
—– Forecast
US GDP Growth rate came in with 2.3% for the first quarter of 2018.
USD/JPY
Pair of USD/JPY tumbled 0.23% to 109.04 during late Friday trading after hitting its highest level since February 8th at 109.54 earlier.
EUR/USD
Euro pushed higher against the greenback, up 0.22% to $1.2131 albeit ending the week with a loss of 1.28%.
GBP/USD
Pair of GBP/USD ended the week at two-months low after falling 0.98% to $1.3779.
Market Review (Commodities): April 23 – 27
GOLD
Gold price clawed higher during late Friday trading hours while gains remained limited due to higher prospect for a more frequent rate hike from the US Federal Reserve. Price of the yellow metal rose $6.50 or 0.49% to $1,324.40 a troy ounce. However, it has recorded a second consecutive weekly loss with 0.92% for last week.
Generally, a higher prospect for an interest rate hike in the region could catalyze higher bullish bets on the greenback which in return, making the safe-haven commodity more expensive for investors from other countries. Likewise, a higher treasury yield tends to make gold less attractive for yield-seeking investors as it does not pay any interest.
Crude Oil
Crude oil price settles lower last Friday as US rig counts jumps for the third consecutive week, spurring higher concerns among investors upon the ongoing global supply glut. Price of the commodity dipped 0.28% or $0.19 to $67.98 per barrel.
According to US oilfield services provider, Baker Hughes reported that the number of active oil rigs operating in the US rose by 5 to a total of 825, a third straight weekly increase. On top of that, EIA reported last Wednesday that the US oil production rose to a new record high of 10.59 million barrels per day. Both report point towards a rising trend of output from the United States which could worsen the current supply glut overhang which has linger for more than 3 years.
However, the downside momentum in oil prices were limited due to renewed investors expectation towards the United States in pulling out of the Iranian nuclear deal. In the event of a cancelation from the Trump administration, secondary sanctions will be re-imposed upon the country and it could limit global purchases of Iranian crude and in return, denting global supplies.
Weekly Outlook: April 30 – May 4
For the week ahead, investors will be paying close attention on US Federal Reserve two-day monetary policy meeting and highly anticipated jobs report to attain further signals with regards to the US economy outlook and rate hike prospects.
As for oil traders, they will be eyeing on US inventories level reported by API and EIA to gauge the strength of crude demand for world’s largest oil consumer.
Highlighted economy data and events for the week: April 30 – May 4
| Monday, April 30 |
Data CNY – Manufacturing PMI (Apr) CNY – Non-Manufacturing PMI (Apr) EUR – German Retail Sales (MoM) (Mar) EUR – German CPI (MoM) (Apr) USD – Core PCE Price Index (YoY) (Mar) USD – Core PCE Price Index (MoM) (Mar) USD – Personal Income (MoM) (Mar) USD – Personal Spending (MoM) (Mar) CAD – RMPI (MoM) (Mar) USD – Pending Home Sales (MoM) (Mar)
Events N/A
|
| Tuesday, May 1 |
Data AUD – RBA Interest Rate Decision (May) GBP – Manufacturing PMI (Apr) CAD – GDP (MoM) (Feb) USD – Manufacturing PMI (Apr_ USD – ISM Manufacturing Employment (Apr) USD – ISM Manufacturing PMI (Apr)
Events AUD – RBA Rate Statement
|
| Wednesday, May 2 |
Data CrudeOIL – API Weekly Crude Oil Stock NZD – Employment Change (QoQ) (Q1) NZD – Unemployment Rate (Q1) CNY – Caixin Manufacturing PMI (Apr) EUR – German Manufacturing PMI (Apr) GBP – Construction PMI (Apr) EUR – GDP (QoQ) USD – ADP Nonfarm Employment Change (Apr) CrudeOIL – Crude Oil Inventories CrudeOIL – Gasoline Inventories
Events CAD – BoC Gov Poloz Speaks
|
| Thursday, May 3 |
Data USD – FOMC Interest Rate Decision AUD – Building Approvals (MoM) (Mar) AUD – Trade Balance (Mar) GBP – Services PMI (Apr) EUR – CPI (YoY) (Apr) USD – Initial Jobless Claims USD – Trade Balance (Mar) USD – Unit Labor Costs (QoQ) (Q1) USD – ISM Non-Manufacturing Employment (Apr) USD – ISM Non-Manufacturing PMI (Apr)
Events USD – FOMC Statement
|
|
Friday, May 4
|
Data CNY – Caixin Services PMI (Apr) EUR – German Services PMI (Apr) EUR – Markit Composite PMI (Apr) EUR – Services PMI (Apr) EUR – Retail Sales (MoM) (Mar) USD – Average Hourly Earnings (MoM) (Apr) USD – Nonfarm Payrolls (Apr) USD – Unemployment Rate (Apr) CAD – Ivey PMI (Apr) CrudeOIL – US Baker Hughes Oil Rig Count
Events USD – FOMC Member Dudley Speaks USD – FOMC Member Williams Speaks
|
Technical Weekly Outlook: April 30 – May 4
Dollar Index
DOLLAR_INDX, Daily: Dollar index was traded lower following prior retracement from the resistance level at 91.70. MACD histogram which illustrate substantially diminished upward momentum suggests the index to be traded lower in short-term as technical correction before extending its bullish bias thereafter.
Resistance level: 91.70, 92.50
Support level: 90.90, 90.65
GBPUSD
GBPUSD, Daily: GBPUSD extended its losses following prior breakout from the support level at 1.3785. MACD histogram which illustrate substantial downward signal suggests the pair to extend its losses, towards the direction of 1.3600.
Resistance level: 1.3785, 1.4000
Support level: 1.3600, 1.3445
USDJPY
USDJPY, Daily: USDJPY was traded lower following prior retracement from the resistance level near 109.70. MACD histogram which illustrate diminished upward momentum suggests the pair to be traded lower in short-term as technical correction.
Resistance level: 109.70, 111.65
Support level: 108.40, 106.90
EURUSD
EURUSD, Daily: EURUSD was traded higher following prior rebound from the support level near 1.2055. Recent pin bar formation while coupled with diminished downward signal from MACD histogram may suggest the pair to be traded higher in short-term, towards the direction of resistance level near 1.2170.
Resistance level: 1.2170, 1.2320
Support level: 1.2055, 1.1935
GOLD
GOLD_, Daily: Gold price remains traded within a sideways channel following prior rebound from the lower level. MACD histogram which illustrate diminishing downward momentum may suggests the pair to extend its gains after breaking the resistance level at 1325.00.
Resistance level: 1325.00, 1340.00
Support level: 1310.00, 1295.00
Crude Oil
CrudeOIL, Daily: Crude oil price remains under pressure following prior failure to push above the target at 69.10. MACD histogram which has formed a death cross signal may suggests the commodity price to extend its losses after closing below the 20-MA line (red).
Resistance level: 69.10, 71.50
Support level: 66.30, 63.75