Unbreakable Moods and Broken Resistances

By Tomasz Wisniewski|

Published: May 19 2023, 05:01 GMT+0

Unbreakable Moods and Broken Resistances

On Thursday, we definitely witnessed some market movements, with the EURUSD and indices taking center stage. The USD and indices showed an uncommon correlation by rising together, despite a virtually empty macro calendar.

Regarding the EURUSD, it continues its downward trend that initiated with a bounce off the upper horizontal resistance of an ascending triangle. The break of the lower line further confirmed this decline. The long-term target now stands at 1.05, a crucial support level observed in March and January. Although reaching that area may require some time, the chances of eventually achieving it are quite high.

An exciting development is unfolding in the indices. The SP500 successfully breached the key resistance at 4180, which held significance this year. Similarly, the DAX experienced a surge and is currently trading just below the crucial long-term resistance formed by the peaks from November 2021 and January 2022. This juncture presents an opportune moment for a correction, and it is highly likely that the bears are aware of this fact.

This week also saw some weakness in the Yen, as the CADJPY and USDJPY reached new yearly highs.

At the end of the Asian session on Friday, there was a slight increase in commodity prices. It is challenging to interpret this move as anything other than a simple profit-taking action. Sentiment towards both precious metals and oil remains negative and is expected to persist for some time.

Looking ahead to next week, the calendar will be a bit busier. We anticipate PMI releases on Tuesday, inflation data from the UK and the FOMC meeting on Wednesday, and US GDP figures on Thursday. These are certainly important numbers to monitor closely.

Source: https://www.axiory.com/analytics/market-news/unbreakable-moods-and-broken-resistances