Ominous signs

GBPUSD – technical overview

Technical studies are in the process of unwinding from stretched levels after the push to fresh multi-month highs. This leaves room for additional setbacks over the coming sessions, before the market considers a meaningful bullish continuation towards a retest of the 2018 high. But look for setbacks to now be very well supported into the 1.3500 area.

• R2 1.3919 – 6 April high – Strong
• R1 1.3800 – Figure – Medium
• S1 1.3670 – 25 March low – Medium
• S2 1.3566 – 4 February low – Strong

GBPUSD – fundamental overview

Chatter about a late 2021 taper in the UK has been helping to open some renewed demand for the Pound, though overall, things have been rather quiet this week. Today’s calendar features German inflation reads and US releases highlighted by retail sales, the Philly Fed, initial jobless claims and industrial production. We also get another wave of Fed speak.

USDJPY – technical overview

The rally over the past several weeks is less bullish in the context of the longer-term chart, which shows the market very much confined to tighter consolidation. Overall, the market is still tracking below the top of the monthly Ichimoku cloud, with risk for the run to stall out in favour of a bearish reversal below 113.00. It would take a clear break back above 113.00 to negate the outlook.

• R2 110.97 – 30 March/2021 high – Strong
• R1 109.95 – 7 April high – Medium
• S1 108.75 – 14 April low – Medium
• S2 108.41 – 23 March low – Strong

USDJPY – fundamental overview

BOJ Kuroda warnings of downside risk are having a broader risk off impact which has opened renewed demand for Yen on traditional correlations. Today’s calendar features US releases highlighted by retail sales, the Philly Fed, initial jobless claims and industrial production. We also get another wave of Fed speak.

EURCHF – technical overview

Lots of sideways price action here, with no clear directional insight. For the most part, price action has been confined between 1.0600 and 1.1200, and it will take a weekly close above or below for an indication of the next big move.

• R2 1.1200 – Figure – Strong
• R1 1.1152 – 4 March/2021 high – Medium
• S1 1.0900 – Previous resistance – Medium
• S2 1.0736 – 10 December low – Strong

EURCHF – fundamental overview

The SNB remains uncomfortable with Franc appreciation and continues to remind the market it will need to be careful about any attempts at trying to force an appreciation in the currency. But the SNB will also need to be careful right now, as its strategy to weaken the Franc is facing headwinds from a less certain global outlook. Any signs of renewed risk liquidation will likely invite a very large wave of demand for the Franc that will put the SNB in the more challenging position of needing to back up its talk with action, that ultimately, may not prove to be as effective as it once was, given where we're at in the monetary policy cycle.

AUDUSD – technical overview

Technical studies have turned up in recent months, after the market traded down to its lowest levels since 2003 in 2020. There is evidence of a longer-term bottom following the latest push back through 0.7000, though at this stage, there is risk for a deeper pullback to allow for shorter term studies to unwind. Setbacks should now be well supported ahead of 0.7400.

• R2 0.7700 – Figure – Medium
• R1 0.7678 –7 April high – Medium
• S1 0.7532 – 1 April/2021 low – Strong
• S2 0.7462 – 21 December low – Strong

AUDUSD – fundamental overview

Not much of a reaction to the headline beat in Aussie employment data on Thursday. It seems softer underlying components and the fact that the numbers came before the expiry of the government's JobKeeper program have mitigated the positive reaction. Today’s calendar features US releases highlighted by retail sales, the Philly Fed, initial jobless claims and industrial production. We also get another wave of Fed speak.

USDCAD – technical overview

Has been in major decline since topping out in 2021 above 1.4600. At this stage, with the decline now well extended, the market is likely to find solid support into the 1.2300-1.2500 area ahead of a resumption of gains. Ultimately, only a weekly close below 1.2400 would suggest otherwise. Back above 1.2743 will strengthen the outlook.

• R2 1.2743 – 26 February high – Strong
• R1 1.2648 – 30 March high – Medium
• S1 1.2502– 5 April low – Medium
• S2 1.2365 – 18 March/2021 low – Strong

USDCAD – fundamental overview

The Canadian Dollar has been a relative underperformer this week and it's concern about coronavirus management and the strain of additional stimulus that have been behind the move. Many worry that Canada could easily overdue it when it comes to the topic of additional stimulus. Today’s calendar features Canada producer prices, ADP employment and manufacturing sales, and US releases highlighted by retail sales, the Philly Fed, initial jobless claims and industrial production. We also get another wave of Fed speak.

NZDUSD – technical overview

Finally signs of topping out after a nice multi-month rally. Look for a weekly close below 0.7000 to strengthen the bearish outlook and expose deeper setbacks towards the 0.6500 area. Back above 0.7300 would be required to take the immediate pressure off the downside.

• R2 0.7270 – 18 March high – Strong
• R1 0.7160 – 15 April high – Medium
• S1 0.7044 – 14 April low– Medium
• S2 0.6997 – 7 April low – Strong

NZDUSD – fundamental overview

The fact that the RBNZ stayed away from talking negative rates proved to be a help to the New Zealand Dollar this week. Of course, record high US equities and ongoing broad based selling of the US Dollar were also a factor. Today’s calendar features US releases highlighted by retail sales, the Philly Fed, initial jobless claims and industrial production. We also get another wave of Fed speak.

US SPX 500 – technical overview

Longer-term technical studies are looking quite exhausted and the market is showing signs of wanting to roll over after racing to another record high. Look for rallies to be well capped ahead of 4200, with a break back below 3700 to strengthen the outlook.

• R2 4200 – Psychological – Strong
• R1 4153 – 14 April/Record high – Medium
• S1 3940 – 29 March low – Medium
• S2 3854 – 25 March low – Strong

US SPX 500 – fundamental overview

We're trading just off fresh record highs, and yet, with so little room for additional central bank accommodation, given an already depressed interest rate environment, the prospect for sustainable runs to the topside on easy money policy incentives and government stimulus, should no longer be as enticing to investors. Meanwhile, ongoing worry associated with coronavirus fallout should weigh more heavily on investor sentiment in 2021.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and an acceleration beyond the next major psychological barrier at 2000. Setbacks should now be well supported above 1600. Longer-term technical studies are however in the process of unwinding, with the market in search of a higher low ahead of a bullish continuation.

• R2 1816 – 23 February high – Strong
• R1 1759 – 8 April high – Medium
• S1 1677 – 8 March/2021 low – Medium
• S2 1670 – May 2020 low – Strong

GOLD (SPOT) – fundamental overview

The yellow metal continues to be well supported on dips with solid demand from medium and longer-term accounts. These players are more concerned about exhausted monetary policy, extended global equities, and coronavirus fallout. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an unnerving climax.

BTCUSD – technical overview

Monthly technical readings are still tracking in severe overbought territory heading into Q2 2021. Risk for any meaningful bullish continuation beyond the recent record high just over $60,000 should be limited over the coming days and weeks, with the higher probability leaning towards more correction and consolidation. There is now room for the correction to extend back down into the $40,000 area, where a higher low would ideally be sought out for a resumption of the bigger picture uptrend.

• R2 65,000 – Psychological – Strong
• R1 64,900 – 14 April/Record high – Medium
• S1 50,300 – 25 March low – Strong
• S2 42,000 – Previous resistance – Strong

BTCUSD – fundamental overview

Heading into 2021, there was a great anticipation for institutional adoption. And as we saw follow through on this anticipation, the bitcoin price tripled in value, exploding to a record high beyond $60,000. But with much of that now priced into the market, and with short-term bitcoin fundamentals still correlating with global risk sentiment, there does appear to be room for somewhat of an adjustment lower in the price before we see that next wave of renewed demand. We also believe bitcoin's emergence into the mainstream will invite more challenge and scrutiny from central banks and governments, which could translate to a bumpy ride in Q2 2021 before the asset once again finds its legs on the compelling longer-term value proposition.

BTCUSD - Technical charts in detail

ETHUSD – technical overview

Despite the latest run to a fresh record high through $2,000, the market is looking quite extended following a massive run higher in 2021. At this stage, additional upside should be limited to allow for extended studies to unwind, before the market considers a meaningful bullish continuation. Look for setbacks to be well supported ahead of $1,500.

• R2 2500 – Round number – Medium
• R1 2478 – 15 April/Record high – Strong
• S1 2000 – Psychological – Medium
• S2 1770 – 31March low – Strong

ETHUSD – fundamental overview

Ether is getting closer and closer to entering a phase of meaningful correction and consolidation after an explosive start to 2021 that has resulted in fresh record highs beyond $2,000. There are already signs of overvaluation in the defi space and this in conjunction with an anticipated deterioration in global risk sentiment are been behind a lot of the reasoning for the anticipated downside pressure. Still, we believe there will be plenty of demand for ether down into the $1,500 area.