Chinese data release pressurizes Aussie

Aussie seems to struggle against the greenback after the release of downbeat data from China. 

Chinese Retail Sales and Industrial Production data data arrived as follows:

Chinese Surveyed Jobless Rate Apr: 5.1% (exp 5.4%; prev 5.3%). Chinese Fixed Assets Ex-Rural YTD (YoY) Apr: 19.9% (exp 30.3%; prev 25.6%) – Property Investment YTD (YoY) Apr: 21.6% (exp 20.0%; prev 25.6%).

Chinese Retail Sales (YoY) Apr: 17.7% (exp 35.2%; prev 34.2%) – Retail Sales YTD (YoY) Apr: 29.6% (exp 31.9%; prev 33.9%).

Chinese Industrial Production (YoY) Apr: 9.8% (exp 7.0%; prev 14.1%) – Industrial Production YTD (YoY) Apr: 20.3% (exp 21.1%; prev 24.5%)

Apart from the chinese data, mixed sentiment between the geopolitical tussles in the Middle East and fears of escalating Aussie-China tension, as signaled by Friday’s WoodMackenzie report and the recent news that the China’s informal ban on Aussie coal imports will stay until 2022 also impacts the Aussie to the downside.

On the other hand, The U.S. dollar was somewhat supported on Monday amid renewed worries about coronavirus restrictions in Asia.

Fed minutes, from an April meeting that predated the data surprise on inflation last week, are due on Wednesday and are the next market focus for getting clues on the central bank’s thinking.

“We expect the minutes … to reiterate that policymakers consider the pick up in inflation to be transitory,” said Kim Mundy, a currency strategist at the Commonwealth Bank of Australia in Sydney.

Elsewhere, As per a lastest news, Prime Minister Scott Morrison said on Monday that Australia will spend up to A$2.3 billion ($1.79 billion) over the next 10 years to keep its two remaining oil refineries open to protect the country’s fuel security.

“This is a key plank of our plan to secure Australia’s recovery from the pandemic, and to prepare against any future crises,” Morrison said in a statement.

AUD/USD 4 Hour Chart:

Support: 0.7734 (S1), 0.7687 (S2), 0.7661 (S3).

Resistance: 0.7808 (R1), 0.7834 (R2), 0.7882 (R3).

The downbeat Chinese data impacts the Aussie negatively against the greenback and we expect a bearish trend for AUD/USD.

BTC/USD Weekly Forecast (17st May 2021 – 21th May 2021)

Fundamental view:

Bitcoin has seen a sharp fall in the last week. Elon Musk revealed Tesla’s decision on accepting payment in BTC, He tweeted on May 13 that the electric car maker will no longer accept payment in BTC. This was the major highlight of the week which lead to the fall, with the recent mining difficulty adjustment coming in at a close second. Adding to the fall was the recent news that reports of Binance, one of the world’s largest cryptocurrency exchanges was investigated by the US Justice Department and Internal Revenue Service.

On the other hand, Bitcoin’s increasing popularity attracted interested parties to explore the mining industry and its profitability as well.  Renaissance Technologies which is an American hedge fund known for outperforming a majority of the investment companies, has ventured into the Bitcoin mining industry. The investment firm has amassed $140 million worth of stock positions in popular mining companies like Riot, Marathon, and Canaan in the first quarter of 2021.

The major economic events deciding the movement of the pair in the next week are Building Permits at May 18, EIA Crude Oil Stocks Change, FOMC Minutes at May 19, Initial Jobless Claims, Philadelphia Fed Manufacturing Index at May 20 and Existing Home Sales at May 21 for US.

BTC/USD Weekly outlook:

Technical View:

Last week’s high was 0.06% higher than the previous week. Maintaining high at 59511.5 and low at 45890.8 showed a movement of 13621 pips.

In the upcoming week we expect BTC/USD to show a bearish trend. The Instrument is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 44290.6 may open a clean path towards 38280.3 and may take a way down to 30669.9. Should 57911.3 prove to be unreliable resistance, the BTCUSD may raise upwards 65521.7 and 71532.0 respectively. In H4 chart descending scallop pattern favors prospects of a bearish trend. Shooting star pattern constructs a bearish outlook for the pair in the upcoming week.

Preference
Sell: 49413.3 target at 38281.7 and stop loss at 57915.6

 

Alternate Scenario
Buy: 57915.6 target at 71531.8 and stop loss at 49413.3

XAU/USD Weekly Forecast (17th May 2021 – 21st May 2021)

Fundamental view:

The gold initially fell during the course of the week but later turned around to show signs of strength. The US inflation has extended a helping hand to the yellow metal. The data published by the US Bureau of Labor Statistics revealed on Wednesday that annual inflation, as measured by the Consumer Price Index (CPI), surged to 4.2% in April from 2.6% in March. 

Whereas The US Census Bureau made an announcement on Friday that Retail Sales in April stayed unchanged at $619.9 billion, compared to analysts’ estimate for an increase of 1%. Adding to it, Industrial Production has expanded by 0.7% in April. The University of Michigan’s Consumer Sentiment Index declined to 82.8 in May from 88.3. Despite the uninspiring data, risk flows continued to dominate the financial markets and helped the precious metal – Gold.              

The major economic events deciding the movement of the pair in the next week are Building Permits at May 18, EIA Crude Oil Stocks Change, FOMC Minutes at May 19, Initial Jobless Claims, Philadelphia Fed Manufacturing Index at May 20 and Existing Home Sales at May 21 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 0.14% higher than the previous week. Maintaining high at 1845.8 and low at 1808.7 showed a movement of 371 pips.

In the upcoming week we expect XAU/USD to show a bullish trend.  The Instrument is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 1856.6 may open a clean path towards 1869.8 and may take a way up to 1893.7. Should 1819.5 prove to be unreliable support, the XAUUSD may sink downwards 1795.6 and 1782.4 respectively. In H4 chart symmetrical triangle breakout favors prospects of a bullish trend. Also to be noted Bullish engulfing formation exerts the expectation of uptrend for the pair.

Preference
Buy: 1840.6 target at 1868.8 and stop loss at 1814.7

 

Alternate Scenario
Sell: 1814.7 target at 1783.4 and stop loss at 1840.5

AUD/USD Weekly Forecast (17th May 2021 – 21st May 2021)

Fundamental view:

The Australian dollar has fallen during most of the week and reached down towards the 0.77 level, Traders now believe that the US economy is going to accelerate and that consumer inflation is more than a transitory phenomenon and it has helped the dollar to show strength. April’s US Retail Sales numbers on Friday were weaker than expected and that reversed about half of the Aussie’s loss.

Australia NAB Business Confidence on 10th May and US Import Price Index on 14th May favored bullish trend whereas US CB Employment Trends Index on 10th May and US EIA Crude Oil Stocks Change on 12th May favored bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are RBA Meeting Minutes, US Building Permits at May 18, US EIA Crude Oil Stocks Change, FOMC Minutes at May 19, Australia Employment Change, US Initial Jobless Claims, Philadelphia Fed Manufacturing Index at May 20, Australia Retail Sales monthly report and US Existing Home Sales at May 21.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.36% higher than the previous week. Maintaining high at 0.7891 and low at 0.7688 showed a movement of 203 pips.

In the upcoming week we expect AUD/USD to show a bullish trend.  The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 0.7885 may open a clean path towards 0.7990 and may take a way up to 0.8088. Should 0.7682 prove to be unreliable support, the AUDUSD may sink downwards 0.7584 and 0.7479 respectively. In H4 chart alt bat pattern favors prospects of a bullish trend. Also to be noted Bullish engulfing formation exerts the expectation of uptrend for the pair.

Preference
Buy: 0.7785 target at 0.7980 and stop loss at 0.7677

 

Alternate Scenario
Sell: 0.7677 target at 0.7480 and stop loss at 0.7792