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Daily F.X.Analysis, May 14 – Braces for European CPI & U.S. Unemployment Claims! 


The dollar is trading with a neutral bias as the US April Inflation data showed that it fell more than the expectations and made the U.S. dollar weaker against Euro currency. The forecasted value of CPI was -0.7%, which in actual came as -0.8%. The Core CPI came as -0.4% in the month of April against the forecasted -0.2%. Let's wait for Fed Chair's speech today.

Economic Calendar

BTC/USD - Daily Analysis

The Bitcoin price dropped up today, after soaring by 5.78% to a daily high of $9,398 before leaning back to trade in the $9,300 range. The definite upside move drove the top-ranked digital asset on over the $8,800-$8,930 resistance band.

Considering the halving day retracement dropped the price to $8,122, Bitcoin price has gained 14.48%, principal traders to immediately see for $9,200 to work as support.

As Bitcoin gradually works its way backward to $10,000, the $9,300 to $9,400 region could be a sticking spot where resistance will produce a retest of previous levels of resistance at $9,200 and $9,061 where the 78.6% Fibonacci Retracement is settled.

BTC/USD - Daily Technical Levels

Support Resistance

8,946 9,542

8,582 9,775

8,349 10,138

Pivot Point 9,178

BTC/USD – Daily Forecast

The BTC/USD prices have violated the ascending triangle pattern, which is leading bitcoin prices towards the fresh resistance level of 9,400. While support holds around 9,170, a bullish breakout of 9.400 level may extend buying until the next resistance level of 9,602. The 50 EMA and RSI, both are supporting bullish bias in the Bitcoin. Correction can be seen below 9,365 level today, while bullish breakout will drive buying unto 9,602.

EUR/USD – CPI Report Ahead

The EUR/USD prices were closed at 1.08186 after placing a high of 1.08963 and a low of 1.08114. Overall the movement of the EUR/USD pair remained bearish throughout the day.

The recovery attempt of the EUR/USD pair on Wednesday failed to reach 1.0900 level and was pulled back during the U.S. trading session. Fed's Powell comments on the U.S. economy offered support to the U.S. dollar, which dragged down the pair to post losses for the day.

At the beginning of the trading session on Wednesday, EUR/USD prices appreciated to a one-week high at 1.0896 on the back of moderate optimism about the European economies, which were prepared to lift the COVID-19 lockdown gradually.

However, the upward trend of pair EUR/USD was dragged down after the speech of Federal Reserve Chairman, Jerome Powell. He dismissed the rumors about the need for negative interest rates and warned that a long-term recession was on its way to the U.S. economy if the White House & Congress did not approve more fiscal aid.

Furthermore, the European Commission on Wednesday unveiled a phased plan for re-opening of borders, airports, and hotels for summer. This initiative came in order to save the tourism industry, which has been collapsed amid the COVID-19 restrictions.

Meanwhile, the statement of Michael Gove, Chancellor of Duchy of Lancaster, that the U.K. and Brussels could negotiate a trade deal in six months was dismissed by the European Union officials on Wednesday.

On the data front, at 14:00 GMT, the Industrial Production for the month of March showed a decline of -11.3% against the forecasted decline by -12.3%. Better than expected fall in industrial activity gave some positive trend to single currency euro and added in the rise of the pair's movement in the early trading session.

EUR/USD - Daily Technical Levels

Support Resistance

1.0787 1.0873

1.0756 1.0928

1.0701 1.0959

Pivot Point 1.0842

EUR/USD – Daily Forecast

The EUR/USD is trading at 1.0802, holding below the pivot point resistance level of 1.0842. A bearish breakout of 1.0842 below level is leading the EUR/USD prices towards the next support area of 1.07630, which marks the double bottom level. Below this, the next support holds around 1.0725. Conversely, resistance holds around 1.0842. The RSI is holding below 50, which is keeping the EUR/USD in a bearish mode while the 50 EMA is also suggesting odds of selling trend in the EUR/USD. Consider staying bearish below 1.0842 today, while buying can also be seen above this level today.

GBP/USD - Downward Channel In-Play

The GBP/USD pair was closed at 1.22362 after placing a high of 1.23396 and a low of 1.22100. Overall the movement of GBP/USD pair remained bearish throughout the day. The GBP/USD pair refreshed its daily tops around 1.234 in early trading session but dropped again to post losses for 3rd consecutive day on Wednesday after the speech of Jerome Powell.

On the back of better than expected GDP data from the United Kingdom, Pound gained strength against the U.S. dollar in the early North American Session but started to lose traction after the Fed Chair gave comments on the U.S. economy.

At 11:00 GMT, the Prelim GDP for the quarter showed a decline of -2.0% against the forecasted value of -2.6% and supported GBP. The GDP for the month dropped by -5.8% in March against the expected -7.9% and supported the Pound.

The Construction Output for March dropped by -5.9% against the forecasted drop of -7.1% and supported GBP. The Index of Services also came in favor of GBP after falling for -1.9% against the expectations of -2.5%.

At 11:02 GMT, the Manufacturing Production for the month of March from the U.K. showed a decline of -4.6% against the expected decline by -6.0% and supported Sterling. The Goods Trade Balance from the United Kingdom showed a deficit of -12.5B against the forecasted deficit of -10.0B and weighed on Sterling.

The Industrial Production for the month of March declined by -4.2% against the forecasted -5.5% and supported Pound. The Prelim Business Investment for the quarter was dropped to 0.0% against the expected -3.0% and supported British Pound.

Most of the data came in favor of Pound and pushed the GBP/USD pair prices on Wednesday in early trading sessions. However, the gains of the GBP/USD pair started to lose after the speech of Jerome Powell, the Chairman of the Federal Reserve. On data front from the United States, the U.S. dollar remains depressed due to poor than expected PPI data for April, which fell more than the expectations. However, its effect was not lasting as the speech from Powell on the current economic situation came in under the eyes of traders.

GBP/USD - Daily Technical Levels

Support Resistance

1.2179 1.231

1.2129 1.2391

1.2048 1.2442

Pivot Point 1.226

GBP/USD – Daily Forecast

The GBP/USD is trading bearish after the breakout of the sideways trading range of 1.2350 - 1.2285. At the moment, the able is trading at 1.2160 before reverting back to 1.2195. The selling bias of the GBP/USD is still dominant as it's holding below 50 EMA, which is extending resistance at 1.2300. The GBP/USD is holding below the daily pivot point level of 1.226, which is suggesting odds of the selling trend in the Cable. However, the bullish breakout of 1.226 level may extend buying until 1.231 and 1.2391. The RSI and 50 EMA are suggesting the chances of a selling bias today. On the lower side, the GBP/USD prices are likely to find support at around 1.2179 and 1.2132. Let's look for selling trades below 1.226 and buying above the same level today.

Good luck!

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Source: https://www.eaglefx.com/news/daily-f-x-analysis-may-14-braces-for-european-cpi-u-s-unemployment-claims/
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