The main focus of traders will be on US inflation at 15:30 GMT+3. Analysts expect the huge spike of the US inflation.
Rise of NZD, dovish Fed, and stocks indices' sell-off
- Stock indices S&P 500 and Nasdaq are falling for seven days in a row. Yesterday, US benchmarks started rebounding their losses and were heading to close green, but at the end of the day plunged on concerns that the stock valuations are too high.
- Fed’s Powell held a meeting yesterday and said that the central bank wouldn’t tight its easing policy anytime soon. Besides he mentioned that higher bond yields reflected economic optimism, not inflation fears, giving investors more confidence to go long on riskier assets.
- The Reserve Bank of New Zealand on Wednesday left its rates and bond-buying at the same level. The New Zealand dollar skyrocketed to almost two-years highs.
- Other riskier currencies the aussie and pound surged to their highest levels since early 2018, while the safe-haven Japanese yen plunged.
EUR/USD has dropped back to the 50% Fibonacci level at 1.2150 after breaking it. It should be just a natural sell-off ahead of the further rally up to the 61.8% Fibo level at 1.2200. EU speeds up vaccinations, so it may help the euro to rise. Support levels are at the recent lows of 1.2100 and 1.2030.
GBP/USD has broken the ceiling of the channel established in November. The way up to the next resistance at 1.4250 is clear now. However, the RSI indicator in combination with the Bollinger Bands point to the overbought zone. Thus, we could see a drop to the recent low of 1.4050 soon. The next support will be at 1.4000.
USD/JPY has approached the 200-day moving average of 105.50. If it manages to break it, the way up to the next round number of 106.00 will be open. Support levels are Monday’s low of 105.00 and the low of February 9 at 104.50.
NZD/USD is heading to 0.7400. If it manages to break it, the way up to the next round number of 0.7500 will be clear. In fact, if we look at the monthly chart, we’d notice that 0.7500 is a key level that was support, but now plays as a resistance. Since the price retraced back to this level, it is likely to reverse down. Support levels are 0.7150 and 0.7000.
The United States will release the weekly Initial Jobless Claims on May 13, at 15:30 MT time
The United States will publish a monthly Inflation Rate and Core Inflation Rate on May 12, at 15:30 MT time.
What's moving markets on Friday? Read in the fresh report!
Elon Musk, Tesla’s founder and CEO, said the company wouldn’t accept Bitcoin as payment any longer. As a result, BTC/USD dropped to $45,300, the low unseen since March.
The USA will post Retail Sales and Core Retail Sales on May 14, at 15:30 MT time.