Market News | Amana Capital
The European Central Bank (ECB) confirms that it is leaving policy unchanged following its latest meeting. That includes its deposit rate at -0.40% and repo rate at 0.00%, its plan to maintain QE of EUR30 billion per month until September, or beyond if necessary, and for interest rates to stay at their present level for an extended period, well past the horizon of asset purchase.
There is no lasting, appreciable impact on EUR/USD. The focus is now on President Draghi's press conference in 45 minutes' time, which won't likely bring any new policy signals. Meanwhile, the EUR/USD traded 0.07% higher at 1.2170 at the time of writing.
Cryptocurrency Daily Update: Bitcoin, Ethereum, Ripple, Bitcoin Cash and Litecoin
- Bitcoin, Ethereum, Ripple and Litecoin suffered in European session Thursday, while Bitcoin Cash ditched the trend
- Bitcoin lost after PayPal's founders described the technology as, "a colossal pump-and-dump scheme, the likes of which the world has never seen"
- Bitcoin, Ethereum, Ripple and Litecoin lost 1-6%
BTC/USD (Bitcoin): The price of bitcoin reversed back from its uptrend in the past few days, slumping after one of PayPal's founders described the technology as, "a colossal pump-and-dump scheme, the likes of which the world has never seen". At 10:25GMT, it was trading nearly 6% lower at $8,778.00 on the Bitstamp exchange.
Technical Analysis Overview: The immediate support is level seen at 8,599.89, S2 is seen at 7,825.23 and S3 at 7,164.30. Meanwhile, the first resistance is seen at 9,112.09, R2 at 9,848.25 and R3 at 10,701.95.
ETH/USD (Ethereum): The world’s second-largest cryptocurrency in terms of market cap, Ethereum, suffered, in line with its wider peer, taking cues after developers of the platform confirmed that a blockchain split might be imminent. At 10:30GMT, it was trading nearly 1.55% down at $627.24.
Technical Analysis Overview: The immediate support level is seen at 624.87, S2 at 571.19 (trend-defining level) and S3 at 487.59. Meanwhile, R1 and R2 are seen at 712.61 and 743.67 respectively.
XRP/USD (Ripple): The third most popular cryptocurrency, Ripple, also struggled to maintain its previous gains witnessed this week, despite news that international payment network, Revolut, has confirmed to add XRP to its platform within this week. At 10:40GMT, it was trading nearly 5% lower at $0.80169.
Technical Analysis Overview: The immediate support level is seen at 0.80015, S2 at 0.76836 (trend-defining level) and S3 at 0.72377. Meanwhile, the immediate resistance is seen at 0.96631.
BCH/USD (Bitcoin Cash): The bitcoin cash gained, in contrast to its other peers, but remained slightly higher than the $1300 level; this crypto asset has come a long way down in the past 48 hours. At 10:45GMT, it was trading 2.40% higher at $1,346.80.
Technical Analysis Overview: Bitcoin Cash is eyeing its immediate resistance level which is seen at 1,579.60, R2 at 1,750.60 and R3 at 1,936.20. Meanwhile, S1 is targeted at 1,253.40, S2 at 1,100.10 (trend-defining level) and S3 at 1,021.50 on the Kraken exchange.
LTC/USD (Litecoin): Litecoin, still struggled to beat the bears continued to trade below the psychological level of 150.00, despite being listed on the Korbit in Korea. At 10:50GMT, it was trading 4.07% lower at $145.84.
Technical Analysis Overview: Litecoin is nearing its immediate support level at 140.45 (trend-defining level), S2 at 124.37 and S3 at 109.44. Meanwhile, the immediate resistance shall be provided at 166.20, R2 at 178.82 and R3 at 191.80, will thereafter, act as the next resistance level.
Annual France inflation is likely to remain at 1.6% y/y in April. Energy price inflation should edge up to 5.4% y/y while food prices are likely to continue to gradually edge down. Markets expect that core inflation will also stay flat at 0.8% y/y.
The persistently weak level of core inflation is consistent with the sharp slowdown in activity in Q1. Going forward, improvements in the labor market and a robust pace of job creation will likely continue to slowly translate into rising underlying price pressures.
From Spain, after January marked the lowest point for inflation this year (0.6%), inflation continues to rise gradually, a trend that we expect to continue over the coming months. That being said, the timing of the Easter holidays, which took place in March this year but were in April in 2017, is causing some volatility in core inflation during this period, with upward prices in March that will be partly reversed in April. As a result, economists expect inflation will go down a notch to 1.1% in April, from 1.2% in March.
Gold Update: Prices Slightly Come off Day's Highs on Strength in Dollar, U.S. Treasury Yields
Gold prices came off the day’s highs Thursday, pressurized by a strength in the U.S. dollar and rising pace of U.S. 10-year Treasury yields above the 3% psychological mark that had been breached in the overnight session.
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange were trading at $1,326.30 by 11:05GMT, off an earlier high of $1,327.80. Prices settled with a loss at $1,321.20 on Wednesday, which was the lowest close since April 6.
Meanwhile, the U.S. dollar index, which measures the strength of the greenback against a basket of six major currencies, held near 3-1/2 highs, with the DXY trading 0.14% lower at 90.90 by 11:10GMT.
Technical Overview: The XAU/USD (Gold) traded just below the immediate resistance of $1332.78 and if it breaks that level it could move towards next resistance of $1341.83 and next of $1356.33. On the other hand, if the gold shows bearish tinge, it could move towards immediate support of $1319.00 (which is also a trend-defining level, below which pair trend is assumed to be bearish and vice versa) and next support of $1306.91.
Thursday's European Central Bank (ECB) monetary policy meeting is awaited by the FX traders for any support, or lack thereof, that it could give to the euro. But the ECB is unlikely to deliver any new policy signals at this time.
The central bank is widely anticipated to leave interest rates and forward guidance unchanged in today’s meeting. Draghi will probably talk in line with ECB chief economist Peter Praet on April 17. Hopeful on economic growth and the medium-term inflation outlook to support the ECB for QE exit this year, but we are yet not convinced that inflation have met criteria for sustained adjustment.
So no solid sense of commitment regarding an end date for QE right now and the message remains that a sufficient level of stimulus stays vital and the ECB must be "patient, persistent and prudent" on its polices. We believe that the ECB will finally commit to an end QE in July or September, with a short taper program from Q4.
The forward guidance on interest rates will probably be solidified just with regard to sequencing steps, with the inflation path once again the primary criteria for the exact timing of moves. We anticipate that the succession will take after Nowotny's framework, with a deposit rate climb from - 0.4% to - 0.2% in the H1 of 2019.
Technical Overview: The EUR/USD traded just below the immediate support of 1.21786 and if it breaks that level it could move towards next support of 1.21523 and next of 1.21000. On the other hand, if the euro talks bearish, it could move towards immediate resistance of 1.22482 (which is also a trend-defining level, below which pair trend is assumed to be bearish and vice versa) and next resistance of 1.22913 and the next of 1.24017.
Please also check our in-depth TA on the euro: EUR/USD: Key Technical Levels To Know Heading Into the ECB Meeting
Sweden's Riksbank Leaves Repo Rate Unchanged at -0.50 Pct, Meets Market Expectations
The Riksbank left the repo rate at -0.50% following its latest meeting, as universally expected, and postpones the planned start of its tightening cycle until "towards the end of the year". The policy statement noted that Swedish economic activity is still strong and inflation has been close to the target, but underlying inflation has been somewhat lower than expected recently. Such a decision was also broadly in line with expectations, and so far EUR/SEK is little changed at around 10.45.
Meanwhile, Sweden's Economic Tendency index for April rose to 110.4 (a 4-month high) from 108.8, vs expectations of a dip to about 107.5. This reflects a big improvement in manufacturing confidence, while it fell sharply for the retail trade sector, and slightly for consumers, according to the KI/NIER surveys.