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Daily Market Update: Euro Zone CPI

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San Francisco Fed President John Williams said the Neutral rate will stay at 2.5% despite stronger growth. He noted that “some economists and central bankers have pointed to signs that the fortunes of r-star are set to rise.”

The Eurozone final CPI was released with the same as the forecast of 1.2%. This helped to push the ECB more to leave its monetary policy unchanged in interest rates and quantitative easing so far.

The lower wage price index put more pressure on the Australian dollar with a reading less than expected of 0.5%. This helped to support the bearish momentum for the Aussie.

The announcement that North Korea suspended negotiations with South Korea on the denuclearization has affected the Japanese yen as a “safe haven” of the financial market.

Japan GDP ended the expansion streak for eight straight quarters of growth. Japan GDP contracted -0.2% QoQ in Q1, less than the expectation of 0.0% QoQ. On an annualised basis, GDP contracted -0.6% versus the expectation of -0.1%.

Oil erased the recent high point and retraced as API inventory data showing close to 5 million barrels more. Market participants expected a small draw on stockpiles.

 

US index

On the daily chart, the price has shaped a descending harmonic pattern with it reaching the resistance of 93.6.

We notice a pin bar has been formed last week, also provided by divergence in RSI.

If the price bounces from these level it will shape a double top pattern and go down to the support of 92.6, but there’s a break above the lower trend line from the high of 2017.

So, if the price breaks above the resistance of 93.6, it may go to 94.2, then to the resistance zone of 95.15-95.5



 

AUD/JPY

On the daily chart, we can see that the price bounced from the support area of 80.35-81.2.

A well-noticed head & shoulders reversal pattern is shaped. The price is at the second shoulder with a breaking of the lower trend line as shown.

Followed by oversold on RSI and the breaking of the lower trend line, the price is expected to get back up again to the resistance area 84-84.35.



 

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