"European markets recover after losses as investors focus on earnings, ECB slows tightening path, and US jobs report awaited"
On Friday, stock markets in Japan and South Korea were closed for a holiday, while Australian and New Zealand yields remained mostly unchanged.
In Europe, major stock exchanges attempted to recover from previous losses, with the DAX rising 0.5% as investors focused on corporate earnings reports. IAG raised its 2023 profit forecast, Air France-KLM beat revenue expectations, and Adidas posted better- than-expected first-quarter results.
Investors are also digesting the monetary policy outlook after the ECB and the Fed both delivered a 25-basis-point increase, with the ECB slowing down the pace of its tightening path. The ECB delivered its seventh consecutive hike on Thursday, as expected, but slowed its policy tightening with a quarter-point increase. Investors are likely to focus on delayed March indicators in Germany, including volatile industrial orders and consumer goods data.
EUR/USD has been consolidating above the 1.1000 level on Friday after a recovery in the Asian session. The upcoming catalyst for the pair will be the April Nonfarm Payrolls data from the US, with investors also monitoring news related to the banking crisis.
The long-term outlook appears uncertain as the price action around 1.1100 shows hesitation, with multiple attempts to break the level without a significant move. The upcoming data releases in the coming weeks will provide more clarity regarding the state of the US economy and potential market direction.
Support 1.1030 - 1.1000- 1.0970
Resistance 1.1045 - 1.1080 - 1.1100
GBPUSD
GGBP/USD has pulled back slightly from its intraday high above 1.2630, which marked its highest level in almost a year. The pair's upward movement is being limited by the cautious market sentiment, as investors are awaiting the US April jobs report.
The next support levels for GBP/USD are expected to be at 1.2600, followed by 1.2550. Despite the pullback, the bullish momentum still appears to be intact, and investors will be closely watching today's NFP data for further developments.
Support 1.2595 - 1.2550- 1.2530
Resistance 1.2630 - 1.2660 - 1.2700
USDJPY
The USDJPY has reached the anticipated support level of 133.75 after a four-day correction and is now in a stabilizing phase while waiting for today's NFP data to determine its direction.
The next support level could be around 133.00 at the 200MA on the 4H chart, which is also the down parallel of the bullish regression channel. If there is a bounce, the first resistance level would be at 134.5, followed by 134.00.
The pair's correlation with the US10Y remains relevant and could provide more insight into its future movements.
Support 133.75 - 133.00- 132.00
Resistance 134.50 - 135.00 - 135.50
XAUUSD
The price of gold recently reached the 2060 level, which could indicate a possible double top formation. However, the price is currently correcting and moving towards the 2030 level support while waiting for further data developments.
Although the price touched a historical high, there is uncertainty about whether there will be more bullish momentum at this level until there are strong data or events developments. Historically, gold has retreated from these levels and has not held for a long time at this resistance level.
Support 2030- 2020- 2011
Resistance 2045 - 2060 - 2070
DAX 40
The Dax is currently experiencing a concentration of prices around 16000 as investors await further developments from the ongoing earnings season. The European and German companies have demonstrated resilience so far. However, yesterday's hawkish ECB meeting had a negative impact on stocks and indices in Europe. Lagarde's statement made it clear that they will not pause soon as inflation remains high, creating more challenges for the economy to sustain positive growth and move away from recession fears.
Looking ahead, the next support levels for the Dax could be around 15750 and 15650, respectively. These levels have been serving as a support line for the past six corrections arzunda the price concentration observed since mid-April.
Support 15760- 15680- 15600
Resistance 15920 - 16000 - 16050
On Friday, stock markets in Japan and South Korea were closed for a holiday, while Australian and New Zealand yields remained mostly unchanged.
In Europe, major stock exchanges attempted to recover from previous losses, with the DAX rising 0.5% as investors focused on corporate earnings reports. IAG raised its 2023 profit forecast, Air France-KLM beat revenue expectations, and Adidas posted better- than-expected first-quarter results.
Investors are also digesting the monetary policy outlook after the ECB and the Fed both delivered a 25-basis-point increase, with the ECB slowing down the pace of its tightening path. The ECB delivered its seventh consecutive hike on Thursday, as expected, but slowed its policy tightening with a quarter-point increase. Investors are likely to focus on delayed March indicators in Germany, including volatile industrial orders and consumer goods data.
EURUSD
EUR/USD has been consolidating above the 1.1000 level on Friday after a recovery in the Asian session. The upcoming catalyst for the pair will be the April Nonfarm Payrolls data from the US, with investors also monitoring news related to the banking crisis.
The long-term outlook appears uncertain as the price action around 1.1100 shows hesitation, with multiple attempts to break the level without a significant move. The upcoming data releases in the coming weeks will provide more clarity regarding the state of the US economy and potential market direction.
Support 1.1030 - 1.1000- 1.0970
Resistance 1.1045 - 1.1080 - 1.1100
GBPUSD
GGBP/USD has pulled back slightly from its intraday high above 1.2630, which marked its highest level in almost a year. The pair's upward movement is being limited by the cautious market sentiment, as investors are awaiting the US April jobs report.
The next support levels for GBP/USD are expected to be at 1.2600, followed by 1.2550. Despite the pullback, the bullish momentum still appears to be intact, and investors will be closely watching today's NFP data for further developments.
Support 1.2595 - 1.2550- 1.2530
Resistance 1.2630 - 1.2660 - 1.2700
USDJPY
The USDJPY has reached the anticipated support level of 133.75 after a four-day correction and is now in a stabilizing phase while waiting for today's NFP data to determine its direction.
The next support level could be around 133.00 at the 200MA on the 4H chart, which is also the down parallel of the bullish regression channel. If there is a bounce, the first resistance level would be at 134.5, followed by 134.00.
The pair's correlation with the US10Y remains relevant and could provide more insight into its future movements.
Support 133.75 - 133.00- 132.00
Resistance 134.50 - 135.00 - 135.50
XAUUSD
The price of gold recently reached the 2060 level, which could indicate a possible double top formation. However, the price is currently correcting and moving towards the 2030 level support while waiting for further data developments.
Although the price touched a historical high, there is uncertainty about whether there will be more bullish momentum at this level until there are strong data or events developments. Historically, gold has retreated from these levels and has not held for a long time at this resistance level.
Support 2030- 2020- 2011
Resistance 2045 - 2060 - 2070
DAX 40
The Dax is currently experiencing a concentration of prices around 16000 as investors await further developments from the ongoing earnings season. The European and German companies have demonstrated resilience so far. However, yesterday's hawkish ECB meeting had a negative impact on stocks and indices in Europe. Lagarde's statement made it clear that they will not pause soon as inflation remains high, creating more challenges for the economy to sustain positive growth and move away from recession fears.
Looking ahead, the next support levels for the Dax could be around 15750 and 15650, respectively. These levels have been serving as a support line for the past six corrections arzunda the price concentration observed since mid-April.
Support 15760- 15680- 15600
Resistance 15920 - 16000 - 16050
