Updated: May 22
Risk on dominated the market as sentiment remain positive throughout the week with the S&P500 index breaking out of the consolidation towards the upside. However, momentum stalled on Friday as the negotiation on U.S. debt ceiling were put on hold in addition to Powell cautious speech. The concern over debt ceiling is overemphasized as they are usually short term events, as such upside momentum for risk on momentum may stall but bullish sentiment remains.
Upcoming Economic Release:
The S&P500 broke out of the range and looks to retest the 4180 previous resistance, now support. If retest is successful, price looks to push towards the 4300 region. However, if price fail the retest and falls back towards the range, price may continue to trades in the 4100 to 4200 range.
Dollar Index (DXY)
The United States Dollar Index overextends past the 102.75 resistance region last week. As price is now extended, the Dollar potentially may retrace towards back to the 102.75, now support region or even the 102.100 support region before heading higher depending on the structure. A retest confirmation may push the Dollar towards the 104.085 resistance region.
Gold dip further primarily due to the appreciation of the Dollar. Price looks to retrace towards the descending trendline / 4hour - 50 EMA at around the 2000 region. If price reverses from the 2000 resistance region, price can look to trade lower towards the 1940 region. However, if price manage to trade above the 2007 region, price may continue to trade towards the upside.
NZD/CAD (Analysis 20-1)
Recap (Week 20 - Last Week) Take Profit - 2
High risk long at market reopening position reached Take Profit - 2 level which we announced to close / partial.
Trade Analysis / Setups
GBP/JPY (Analysis 21-1)
Analysis: Price is trading in consolidation between 168.014 to 172.110 region. As of now, price is consolidating further near the top of the range, at resistance level. If the minor support is breached. Price may potentially fall towards the bottom of the range.
Short opportunity: Break and retest confirmation at 171.208 region towards 169.515 as Take Profit - 1 level.
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