Shifting attention towards ECB, BoE

With the Fed maintaining a hawkish stance, markets are now shifting attention towards ECB, BoE as both central banks deliver their latest interest rate decisions.

Traders will closely monitor forward guidance from ECB President Lagarde and the BoE statement, as any hawkish signals could influence EUR and GBP direction ahead of key inflation and growth data releases.

ECB expected to remain on hold

With the Fed remaining hawkishly on hold yesterday, we turn our attention towards ECB’s interest rate decision in today’s late European session.

ECB is also widely expected to remain on hold, with attention being placed on the bank’s forward guidance, which is to be included in the bank’s accompanying statement and ECB President Lagarde’s press conference.

We expect the bank to sound hawkish given the inflationary pressures in the Euro Zone and if actually so, we may see the common currency getting some support.

BoE also expected to remain on hold

Just before ECB’s interest rate decision we get from the UK, BoE’s decision. The BoE is also expected to remain on hold and once again market focus is expected to be placed on the bank’s forward guidance.

Should the bank sound hawkish, signaling the possibility of rate hikes to come, we may see the pound gaining. 

Apple’s earnings report under the limelight

Yesterday’s earnings reports may provide a boost for Alphabet, Amazon and Microsoft given the market’s AI frenzy, while Meta may have disappointed traders given its CapEx plans and user metrics.

In today’s aftermarket hours, we get Apple’s earnings report, with focus being placed on the EPS and revenue figures and especially the bank’s forward guidance, given the expected change in the company’s leadership.

Oil prices rally on market worries

Oil prices rallied yesterday on market worries for an escalation of the US-Iran conflict. Reports cite the US as considering military options in the conflict in addition to extending the existing passive-aggressive blockade of Iranian ports.

Market worries for a longer than expected disruption of the supply chains of the international oil market, mentioned also in yesterday’s report, intensified.

دیگر نکات مهم امروز

Today we get Germany’s, the Czech Republic’s, France’s and the Euro Zone’s preliminary GDP rates for Q1, France’s and the Euro Zone’s preliminary HICP rates for April, Switzerland’s KOF indicator for April and from the US the PCE rates for March, the preliminary GDP rates for Q1, the weekly initial jobless claims figure and Canada’s GDP rate for February.

On a monetary level we note BoE’s and ECB’s interest rate decisions. In tomorrow’s Asian session we get from Japan, Tokyo’s CPI rates for April.

Charts to keep an eye out

USD/CAD

EUR/USD continued to drop yesterday testing the 1.1655 (S1) support line, We intend to maintain our bearish outlook for the pair as long as the downward trendline guiding it remains intact, Yet we note that the RSI indicator remains near the reading of 50, implying a rather indecisive market, while the ECB’s interest rate decision could alter the pair’s movement to any direction.

Should the bulls take over, we may see  EUR/USD breaking the prementioned downward trendline and  aiming actively for the 1.1825 (R1) resistance line.

On the flip side, should the bears remain in the driver’s seat, we may see EUR/USD breaking the 1.1665 (S1) support line, setting its sights on the 1.1575 (S2) support level.

WTI

WTI’s price rallied yesterday breaking the 107.00 (S1) resistance line, now turned to support and continued to rise, reaching the 112.70 (R1) resistance line in today’s Asian session. We maintain a bullish outlook for WTI’s price.

Please note that the RSI indicator is aiming for the reading of 70, implying a strengthening bullish market sentiment for the pair. Should the bulls maintain control over the index’s direction, WTI may break the 112.70 (R1) resistance hurdle and start aiming for the All Time High level of 112.70 (R2) resistance level.

For a bearish outlook which we currently see as remote but not impossible, we would require WTI’s price to break the 107.00 (S1) support line and continue lower to break also the 100.90 (S2) level.

نمودار چهار ساعته یورو به دلار آمریکا

• Support: 1.1665 (S1), 1.1575 (S2), 1.1410 (S3)
• Resistance: 1.1825 (R1), 1.1925 (R2), 1.2080 (R3) 

WTI Daily Chart

• Support: 107.00 (S1), 100.90 (S2), 93.80 (S3)
• Resistance: 112.70 (R1), 119.50 (R2), 126.00 (R3) 

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