one royal market analysis

Wednesday, 27 April, Market Overview

EUR/USD Market Weekly Overview:  

In the US, all eyes will be on Gross Domestic Product Annualized report, due Thursday, April 28th. Annualized GDP is a gross measure of market activity and it indicates the pace at which a country’s economy is growing or shrinking. A reading below 1.1% will be considered bearish for the USD; however, a reading above the estimated percentage will be considered bullish.  

In the euro-zone, all eyes will be on the Harmonized Index of Consumer Prices (HICP) also released on Thursday, April 28th. HICP is an index of consumer prices calculated and published by Destatis, Germany’s National Statistical Office, where a reading below 7.6% will be considered bearish for the EUR; whereas a reading above 7.6%% will be considered bullish for the EUR. In addition, the Gross Domestic Product s.a. (YoY) report will be released on Friday, April 29th. A reading below 5% will be considered bearish for the EUR; however, a reading above the estimated number will be considered bullish for the EUR. 

Amid the ongoing energy concerns, Russia has cut gas supply to Poland, and the pair has notably fallen, trading at a new low below 1.0620. Yesterday’s price was even lower than the Covid-19 pandemic’s low trading price at 1.0636. Will the next downside reach 2017’s low at 1.0341? 

From a technical perspective, a break below 1.0587 will target April 10th, 2017’s low at 1.0569 en route to February 2017’s low at 1.0493, whereas a break below this level will target 2017’s low at 1.0341. On the upside, a break above 1.0640 will target the first resistance at 1.0660 and then the psychological level at 1.0700. A break above the psychological level could accelerate the bullish movement and target the next hurdle at 1.0936 (April 21st  high), seconded by the round level at 1.1000. 

USD/JPY Market Weekly Overview:  

In Japan, all eyes will be on the BoJ interest Rate Decision report on Thursday, April 28th. If the BoJ is hawkish about the inflationary outlook of the economy and interest rates rise, this would be positive, or bullish, for the JPY. Likewise, if the BoJ has a dovish view on the Japanese economy and either keeps the ongoing interest rate or cuts the interest rate, this would be negative, or bearish. 

USD/JPY is trapped in a 126.50-130.00 this week. On the downside, the support level is at 127.10, and last week’s low was at 126.50. A break below this range can direct this pair to the psychological threshold at 125.00, whereas a break below the psychological level will direct it to the 123.90 mark. However, resistance comes initially at 129.40, and a break above the range will direct the pair to trade at 131.25.

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