April 2022 Macro Market Commentary

Bitcoin -

Bitcoin remained weak for most of April below the $48,000 area achieved in March. Assets considered risky, including equities, generally traded lower on rising inflation, and the interest rate hikes announced by central banks expected in the months ahead.

  • Goldman Sachs allowed a cash loan to be issued backed with Bitcoin as collateral. This could be seen as a significant step towards broader acceptance by major financial institutions of cryptocurrencies for use as collateral for various types of loans. Non-fungible tokens (NFTs) which are used to encapsulate ownership rights of real and digital assets could also serve as collateral for loans. NFTs are being explored by Goldman Sachs as a tokenization use case for real assets.
  • Greyscale initiated a response to the United States Securities and Exchange Commission’s (SEC) consistent rejection of spot-bitcoin based exchange traded fund (ETF) applications based on applicants inability to have rules in place “designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest”, but have allowed futures-based ETFs to be approved. Greyscale’s lawyers have argued that the underlying price of both futures-based and spot-based ETFs are subject to the same market forces, and that to deny spot-based ETFs could lead to “unfair discrimination”.
  • The Central African Republic has become the second country after El Salvador to adopt Bitcoin as their national currency and legal tender. The Central African Republic government intends to make money transfer easier for its citizens, stabilize the war-torn country, and spur economic recovery and growth. The cryptocurrency will not replace the existing fiat currency, the Central African CFA franc (XAF), which is used by five other central African countries, namely, Cameroon, Chad, Republic of the Congo, Equatorial Guinea, and Gabon. The XAF is supported by the French Treasury and pegged to the euro, and administered by the Central Bank of African States.

DAILY TREND: DOWN

Source: ICE Connect

Bitcoin traded lower for most of April having reached the $48,000 resistance area at the end of March. The $34,000-$36,000 support area stands in the way of lower prices, and another support area around $30,000.

XBT closed the month at $38,560 with a -15.8% change.

UPCOMING HIGH IMPACT EVENTS

  • Spring 2024 bitcoin halving event


US Dollar -

The U.S. Dollar Index ® (USDX) closed the month at 103.25 with the largest monthly gain since May 2012 at 4.99%. U.S. Dollar Index ® traded to an April high at 103.95, the highest the USDX had traded in 2 years.

  • Nonfarm Payrolls data released on 1st April came in with 431,000 new jobs created in March, falling significantly below expectations of 490,000. Positive news however came from a revision to February’s jobs data as the numbers increased from 678,000 to 750,000. This resulted in a positive day of trading as the USDX closed at 98.63 with a gain of 0.27%.
  • The Federal Open Market Committee (FOMC) minutes released on 6th April shared the confidence in the strengthening of economic activity, the strong jobs market in recent months and lowering unemployment. Concerns continued around inflation and that it is likely to remain elevated based on a number of factors including higher energy prices and issues related to the pandemic. Inflation will be measured closely and appropriate action taken. The FOMC also expects to reduce its Balance Sheet by $95 billion per month. The USDX closed the day at 99.62 with a gain of 0.14%.
  • Consumer Price Index (CPI) data released on 12th April showed annual inflation continued to gain momentum with all items recording an increase of 8.5% before seasonal adjustments for the 12-month period ending March, the highest since December 1981. Prices for all items less food and energy rose to 6.5% over the last 12 months, the highest level posted in 40 years, setting another record increase. The USDX closed the day at 100.29 with a gain of 0.27%.

DAILY TREND: UP

INDEX WEIGHTING:
EUR 57.6% | JPY 13.6% | GBP 11.9% | CAD 9.1% | SEK 4.2% | CHF 3.6%

Source: ICE Connect

The U.S. Dollar Index ® started April trading on a firm footing with the bulls in control from the start of trading. The demand for the U.S. Dollar continued to increase after taking a bounce off the daily support area at 97.85 – 97.29 on the last trading day of March. On 1st April Nonfarm payrolls added 431,000 new jobs, even though it came in below market expectations this release did not seem to faze the market. In addition to this March data had been revised upwards from 678,000 to 750,000. ISM Manufacturing PMI data released on the same day fell to 57.1 compared to the prior month's release at 58.6 and below expectations 59.0. Again, this disappointing news did not seem to dampen U.S. Dollar demand as the bulls drove price higher. The U.S. Dollar Index ® closed the first day of trading on Friday at 98.63 with a gain of 0.27%, clawing back some of the losses made earlier in the week and testing the daily 20 SMA that the market has traded below for the prior 3 days. After the positive gains made on 1st April trading the U.S. Dollar Index ® ended the week at 98.63 down 0.22%.

The bullish momentum for the U.S. Dollar continued into the following week of trading as the U.S. Dollar Index ® continued to rally, this time to re-establish a firm close above the daily 20 SMA and end 4th April trading up 0.35% at 98.97. ISM Services PMI data for March was released on Tuesday 5th April bringing welcomed news to the market as the data came out above expectations at 58.3 (against 58.0) and a gain on the prior month release of 56.5. This upward move drove the U.S. Dollar Index ® back into the daily resistance area at 99.08 - 99.43 which had been tested on two prior occasions. This was the third retest and whilst sellers were evident, the U.S. Dollar Index ® just pierced through the area before sellers stepped in driving prices lower to close on the upper boundary of the area. The U.S. Dollar Index ® closed up for the day at 99.43 with a gain of 0.46%, the fourth consecutive positive close.

The Federal Open Market Committee (FOMC) minutes released on 6th April confirmed the details subsequent to the FOMC meeting held in March. The minutes highlighted economic activity and employment had continued to strengthen and acknowledged that inflation remained at an elevated level. Fed Chair Jerome Powell previously recognized that the Fed might increase rates more aggressively than initially planned to help curb inflation. There is a possibility that planned rate hikes could be as high as 50 basis points at the next FOMC meeting if inflation intensifies. This comes after the 25 basis point rise in March, the first rate increase since December 2018.

As inflation has been brought to the forefront to help gauge future inflation expectations ICE Benchmark Administration has launched the ICE U.S. Dollar Information Expectation Index Family. A useful tool to help answer some of the key questions that will affect how the monetary policy will unfold within the coming quarters. The chart below provides the historical Index settings over the past year:

Further information can be found on the ICE U.S. Dollar Inflation Expectations Index Family: https://www.ice.com/iba/usd-inflation-indexes

The Committee plans to start reducing their bond holdings by $95 billion per month possibly as early as May. Whilst this information was not a surprise to the markets, the U.S. Dollar bulls continued to drive prices higher. The U.S. Dollar Index ® traded through the daily resistance area previously tested, breaking out of the range it had been trading in throughout March and into early April to close above at 99.62 with a gain of 0.14%.

The trading day on 7th April was slightly choppy with little clear direction throughout the day whilst the bulls continued to drive price steadily higher there was overhead resistance at 99.70 – 100.00 on a daily chart stalling the upward momentum. The U.S. Dollar Index ® pushed higher and closed for a fifth consecutive daily gain at 99.76 up by 0.10%.

On 8th April, the U.S. Dollar bulls continued to make gains during early trading, however the U.S. Dollar struggled to gain significant ground due to resistance. The U.S. Dollar Index ® managed to pierce the upper boundary of the daily resistance area before sellers came in driving prices lower. The U.S. Dollar Index ® closed trading at 99.75 the first daily loss of the month at 0.07%. Overall, the U.S. Dollar Index ® ended the trading week at 99.75 with a gain of 1.14%.

On 11th April trading was choppy with the bulls and bears both jostling to gain ground after the market dropped from the prior day’s highs yet the bulls pushed back and the market remained trading within the daily resistance area at 99.70 – 100.00. The bulls gained the upper hand by close and the U.S. Dollar Index ® ended the trading day at 99.92 with a gain of 0.23%.

The following trading day, 12th April the market continued to stair step upwards during early trading however, these gains were wiped out on the announcement of the Consumer Price Index data. The annual inflation rate for all items recorded an increase of 8.5% for the 12-month period ending March 2022 (before seasonal adjustments), the highest since December 1981 accelerated predominantly by rising energy prices. Prices for all items less food and energy rose to 6.5% over the last 12 months, the highest level in 40 years, setting another record increase albeit slightly below expectations of 6.6%. The U.S. Dollar Index ® dropped heavily within the first 30 minutes following the announcement to lose 0.40% of its value, although the market regained ground as the bulls returned for the remainder of the trading day and drove prices higher.  The U.S. Dollar Index ® closed trading at 100.29 with a gain of 0.27% breaking through and closing above the resistance area 99.70 – 100.00.

On 13th April, the U.S. Dollar Index ® continued to trade higher during early trading although the bulls were challenged as the U.S. Dollar bears regained control during the U.S. trading session sending the U.S. Dollar lower throughout the remainder of the day. The U.S. Dollar Index closed trading at 99.91 with a loss of 0.41%.

On 14th April the bulls returned with more momentum behind them as the U.S. Dollar rallied throughout the day until the market reached an area of daily resistance at 100.53 – 101.03. The sellers returned and the bears recaptured some ground as the market began to fall, ultimately this was not enough to cover earlier gains made and the U.S. Dollar Index ® closed trading at 100.33 with a gain of 0.49% with an overall weekly gain of 0.64%.

15th Good Friday – No trading.

After the long weekend, the market reopened for trading on 18th April with a positive footing as the bulls continued to take charge and the market rallied higher within the area of daily resistance at 100.53 – 101.03 with little push back from the sellers. The U.S. Dollar Index ® closed trading at 100.77 with a gain of 0.31%.

On 19th April, this bullish momentum continued and with little challenge by the bears the U.S. Dollar Index ® closed trading with a gain of 0.16% at 100.96 almost reaching the upper boundaries of the area. By 20th April, the U.S. Dollar bears came back with some force as prices just breached the upper boundary of the resistance area and the U.S. Dollar Index ® began to fall. Trading closed at 100.42 with a loss of 0.58%, the largest daily drop of the month so far.

After the sell off on 20th April and trading throughout the Asian session on 21st April the U.S. Dollar Index ® began to recover making up for some of the prior losses. In a speech delivered during the day by the Fed Chair, Jerome Powell opened the door to the possibility of the Fed raising rates by 50 basis points at the May meeting to counteract inflation. This would be a significant move if the Fed made this decision, as it would be the first back-to-back rise since 2006. The U.S. Dollar Index ® closed trading at 100.61 with a gain of 0.26%. Inflation is set to play a key role in interest rate decisions throughout 2022 the ICE U.S. Dollar Information Expectation Index Family is a great tool to help plan for the future.

The bullish momentum continued into trading on 22nd April where the U.S. Dollar Index ® blasted through the resistance area which had been holding prices down to close the trading day at 100.21 with a gain of 0.57%. The full week of trading the U.S. Dollar Index ® closed with a gain of 0.74%.

On 25th April, the U.S. Dollar Index ® continued to strengthen as the bulls were firmly in control and by the close the U.S. Dollar Index ® gained 0.66% to end the day at 101.77. This was the largest daily gain for April. The bullish move continued into 26th April and whilst Durable Goods Orders for March came out at 0.8% (below expectations of 1%) it was a significant increase in the -1.7% (revised from -2.2%) published for February. Data released for Nondefense Capital Goods Orders ex Aircraft for March was positive news at 1.0% beating expectations if 0.5% and the prior months -0.3%.The U.S. Dollar Index ® closed the day at 102.32 with another strong gain of 0.60% although edging closer to a daily resistance area at 103.15 – 106.63.

With more space to the upside, 27th April did not disappoint with the U.S. Dollar bulls driving prices higher for the fifth consecutive trading day. The U.S. Dollar Index ® closed with a gain of 0.62% at 102.96, just dipping into the daily resistance area to reach a high of 103.29 before pulling back.

The U.S. Dollar Index ® continued to extend the gains made as the rally continued throughout the day on 28th April as prices reached deep within the resistance area at 103.15 – 106.63 no significant weakness showed. The U.S. Dollar Index ® pulled back slightly from the high of the day at 103.95 the U.S. Dollar Index ® closed up for the day at 103.66 with a gain of 0.63%.

As prices dropped from the prior day's high, more downside momentum gathered as the bears took charge throughout 29th April, the U.S. Dollar Index ® closed trading at 102.96 with a loss of 0.70%. The largest one-day loss in April, however this did not change the overall picture for the final week of April trading as the U.S. Dollar Index ® closed at 103.25 with a gain of 2.12%. The greatest weekly gain of the year so far.

The uptrend continues on the U.S. Dollar Index ® in the weekly timeframe and the daily uptrend has resumed after breaking out of the sideways range that the market had traded between throughout the majority of March and early April trading (support area at 97.85 – 97.29 and resistance area at 99.08 – 99.43). The U.S. Dollar Index ® closed the month at 103.25 with a gain of 4.99% the largest monthly gain since May 2012 and April's high at 103.95, the highest U.S. Dollar Index ® has traded in two years.

UPCOMING HIGH IMPACT EVENTS

  • Mon 2 May ISM Manufacturing PMI (Apr)
  • Wed 4 May ADP Employment Change (Apr)
  • Wed 4 May ISM Services PMI (Apr)
  • Wed 4 May Fed Interest Rate Decision
  • Wed 4 May Fed’s Monetary Policy Statement
  • Wed 4 May FOMC Press Conference
  • Fri 6 May Nonfarm Payrolls (Apr)
  • Wed 11 May CPI (Apr)
  • Fri 13 May Michigan Consumer Sentiment (May) PREL
  • Tue 17 May Retail Sales (Apr)
  • Wed 25 May Durable Goods Order (Apr)
  • Wed 25 May Nondefense Capital Goods Orders ex. Aircraft (Apr)
  • Wed 25 May FOMC Minutes
  • Thr 26 May Gross Domestic Product Annualized (Q1) PREL


South Korean Won -

The South Korean Won closed April at 1,262.91 KRW against the U.S. Dollar, the largest loss the South Korean Won had experienced since October 2016.

  • Unemployment figures released on 12th April showed the unemployment rate was steady at 2.7%, equal to the data released for March.
  • Gross Domestic Product (GDP) figures released on 25th April for Quarter 1 2022 showed the annual growth rate had dropped to 3.1% against 4.2% with quarterly data reporting a 0.7% growth against prior quarter 1.2%. Both figures came out above expectations.
  • Industrial output data released on 28th April came out above expectations with March year-on-year data released at 3.7%, which is considerably above expectations of 1.18% but significantly below February output figures of 6.3%.

DAILY TREND: UP

Source: ICE Connect

The USDKRW continued the upward momentum on the first day of April trading with the U.S. Dollar bulls in control after the pair reached a daily support area on 30th March at 1208.72 – 1202.29. The weakness of the South Korean Won (quote) compounded as Manufacturing PMI data released at 51.2 showed a slowdown, falling significantly short of expectations and the prior release. The first day of the month trading closed at 1219.73 up 0.38%.

Monday 4th April trading reversed the gains made from the first day of trading as the USDKRW dropped by 0.49% closing at 1213.75, a significant strengthening of the South Korean Won. Fortunes reversed again on the following day as the U.S. Dollar bulls regained control, driving the market higher to close 1218.22 with a gain of 0.30%. This gain was short lived as the bears came back and challenged on 6th April that resulted in the USDKRW closing with 0% change for the day.

The U.S. Dollar bulls reaffirmed their position as the USDKRW closed higher during the following two consecutive trading days to end the first full week of trading at 1229.19 with a gain of 0.78%.

This strong bullish move continued into the second week of trading where the USDKRW closed on 11th April with a gain of 0.41%. The USDKRW continued the upward move until the pair reversed after falling short of a daily area of resistance at 1240.26 – 1247.05 and the pair pulled back. The bears regained control and USDKRW dropped for two consecutive trading days on 12th and 13th April losing 0.97% of its value, giving South Korean Won strength against the U.S. Dollar before the pair found some support at the daily 10 SMA.

The bulls returned on 14th April and the market rallied throughout the day closing up 0.58% at 1230.58. The week ended with the bears clawing their way back throughout the final trading session of the week as the USDKRW dropped to close the second week of trading at 1228.20 with a slight loss of 0.08%.

The following trading week the USDKRW continued to rally as the bulls regained control, Monday trading closed up 0.50% at 1234.28. This move up was extended into Tuesday trading although as it reached an area of daily resistance at 1240.26 – 1247.05 selling pressure was evident and the USDKRW pulled back slightly to close the day at 1239.53 a gain of 0.43%. The market dropped heavily from this resistance area on 20th April 1233.71 to close the day with a loss of 0.47%.

The USDKRW bulls came back with force closing higher during the next two consecutive trading days although the pair struggled to break through the upper boundary of the resistance area. The USDKRW closed the week at 1244.79, up 1.35%.

The USDKRW rally continued into the following week, Monday trading closed up 0.40% at 1249.55 breaking through to close above the daily area of resistance at 1240.26 – 1247.05. This move up continued into Tuesday where the USDKRW printed the largest daily gain of the month at 0.89% to close at 1260.67. The rally extended during trading on the 27th and 28th April with an overall gain over the four days of 2.20%. The high of 28th April at 1276.31 on the USDKRW was the weakest point the South Korean Won had traded against the U.S. Dollar since March 2020. The last day of trading on 29th April the USDKRW bears appeared and the pair dropped significantly to close with the biggest one-day loss of 0.72%. The USDKRW closed at 1262.91 with a gain of 1.46% for the week.

The weekly uptrend continues with the weekly 20 SMA acting as support. The daily uptrend resumes with the daily 10 SMA acting as support. The USDKRW closed April at 1262.91 with a gain of 3.93%. The largest monthly gain for the U.S. Dollar against South Korean Won since October 2016.

UPCOMING HIGH IMPACT EVENTS

  • No major events listed


Singapore Dollar -

The Singapore Dollar closed the month at $1.3828 against the U.S. Dollar after the USDSGD gained significant strength. The USDSGD broke above the range on a monthly chart that the pair traded within during the past nine months and in doing so reinstating the daily uptrend.

  • The PMI Manufacturing data released on 4th April at 50.1, the announcement was above expectations of 49.8 but with a slight drop compared to the prior month release at 50.2.
  • Consumer Price Index (CPI) data released on 25th April showed inflation had a significant jump with CPI - all items 12-month ending March at 5.4%, up on the prior month reported at 4.3% and above expectations of 4.7%.
  • Data published on 26th April by the Singapore Department for Statistics shows Industrial Production reported a significant decline in manufacturing output for March with data released showing a drop to 3.4% year-on-year and a considerable decline when looking at month on month data of negative 12.6%.

DAILY TREND: UP

Source: ICE Connect

The USDSGD started the month trading within a sideways range with the outer boundaries of the range at 1.3512 for support and 1.3689 as resistance. The first day of April trading closed up 0.13% at 1.3562 with the U.S. Dollar bulls in control.

Trading began on Monday 4th April with the bears taking control and after a strong challenge, the USDSGD closed the day marginally lower at 1.3564 with a loss of 0.03%.

The bulls came out with more force on 5th April and the pair rallied strongly. The lack of appetite for the Singapore Dollar aided by poor Retail Sales figures (both monthly and annual data) falling significantly below expectations. The USDSGD closed the day at 1.3586 with a gain of 0.16% signifying Singapore Dollar weakness (quote).

This bullish move on the USDSGD continued for the remainder of the week as the U.S. Dollar continued to gain strength against the Singapore Dollar. After a challenging start on Monday 4th April, the USDSGD ended the week with four consecutive higher daily closes.

The USDSGD closed the first full week of trading at 1.3636 with a gain of 0.54%.

The momentum to the upside continued during trading on the 11th April until the USDSGD reached a daily resistance area at 1.3656 – 1.3689 which had proved to be a challenge on the initial retest in March where the pair dropped heavily. This retest was not to disappoint as the area of resistance still had an abundance of sellers and the USDSGD dropped from this area again, the pair lost some of the gains made earlier in the day but still closed up for the day at 1.3647, with a gain of 0.24%. 12th April trading the USDSGD retested this area once more but this time more sellers joined and the market dropped to close the day at 1.3637 down 0.07%. This bearish momentum continued throughout the next two consecutive trading days as the U.S. Dollar lost value against the Singapore Dollar.

On 14th April, the USDSGD had dropped to reach the outer support boundary of the range to breach by 1 pip to a low of 1.3511 before rebounding upwards as the bulls returned. The day closed down but the bulls had made some ground as the USDSGD closed at 1.3561 with a loss of 0.46%. The bulls continued to drive prices higher the following trading day although the bears challenged back and the market settled to close at 1.3562 a slight gain of 0.04%.

The USDSGD closed the second week at 1.3562 with a loss of 0.39%.

The following trading week the bullish momentum continued with the USDSGD printing positive closes on 18th and 19th April where the pair eventually retested the area of resistance at 1.3656 – 1.3689.

On the 20th April the pair pushed higher breaching the upper boundary posting a high of 1.3698 before pulling back as sellers stepped in. The bears took control and the pair dropped to close the day down by 0.36% at 1.3626.

Early trading on 21st April saw the pair continue to trade lower until support was found from the daily 20 SMA. Buyers stepped in and the USDSGD began to rise and closed the day at 1.3644, a gain of 0.13%. This bullish momentum continued into the following trading day where the USDSGD closed with a gain of 0.46% at 1.3708 firmly above the resistance area and upper boundary of the range the USDSGD had been trading within.

The USDSGD closed the trading week at 1.3708 with a gain of 1.01%.

This move to the upside continued into the following week with four consecutive positive closes coinciding with the strength seen on the U.S. Dollar Index ®. As the demand for the U.S. Dollar increases, the Singapore Dollar being the quote currency weakens in the pairing. The final trading day of the month the USDSGD traded lower with the U.S. Dollar bears returning. The USDSGD closed down 0.22% at 1.3835.

Overall, the USDSGD closed the week at 1.3835 up 1.04%.

After breaking above the range, the USDSGD had been trading in throughout March to mid-April the daily and weekly uptrend resumes. The USDSGD closed April at 1.3835 with a gain of 2.14% for the month, the largest monthly U.S. Dollar gain since November 2016.

UPCOMING HIGH IMPACT EVENTS

  • No major events listed


Chinese Yuan -

The Chinese Yuan Renminbi closed April at 6.6082 CNY against the U.S. Dollar as the Yuan continued to weaken against the U.S. Dollar for the fourth consecutive month of trading.

  • China’s foreign reserves declined for the third consecutive month in March from $3.21 trillion at the end of February to $3.19 trillion by the end of March 2022, falling below market expectations of $3.20 trillion according to data released on 7th April.
  • Consumer Price Index (CPI) data released on 11th April by the National Bureau of Statistics of China showed CPI is growing at a rate of 1.5% March year on year, slightly higher than expected (1.2%) and substantially higher that 12-month ending February data.
  • The NBS Manufacturing PMI data for March published on 30th April showed a weakening compared to February's release and below expectations. Figures released at 47.4 against expectations of 48.0 and February data of 49.5, which is a concern due to the significance this has within the Chinese economy. Non-Manufacturing PMI data showed a significant decline on the prior months data announcing 41.9 against 48.4 in February and below expectations of 53.0.

DAILY TREND: UP

Source: ICE Connect

A bullish start to April as the USDCNH rallied during the first day and whilst it met some resistance towards the end of trading, the pair closed at 6.3636 with a gain of 0.16%.

This bullish move continued into the following week with another strong move up during Monday and Tuesday trading. The USDCNH closed Monday 4th April at 6.3717 with a gain of 0.21% with Tuesday at 6.3783 up by 0.11%.

The bulls continued to drive the pair higher on 6th April trading however, there was a small area of resistance on a daily chart 6.3816 – 6.3983 where sellers were waiting. After the USDCNH reached a high of 6.3870 the bears stepped in and the pair dropped. As the pair began to fall, the Yuan (quote currency) gained value to recover most of the losses from the prior two days trading. The USDCNH closed down 0.28% at 6.3593.

Trading throughout 7th and 8th April was mixed with the buyers and sellers battling it out, ultimately the market closed 7th April at 6.3606 a modest gain of 0.03% and edging slightly higher as the pair closed trading on 8th April at 6.3657 a gain of 0.08%.

The first full week of trading the USDCNH closed at 6.3657, a modest gain of 0.12%.

The bulls continued to gain ground on Monday 11th April where trading on the USDCNH closed up with a gain of 0.27% at 6.3843. This momentum was short lived as the USDCNH spent the remainder of the week trading with mainly sideways action. The USDCNH closed the week at 6.3787 with a gain of 0.19%.

On Monday 18th April the bears continued to drive price lower as trading began however the bulls challenged this bringing a little positivity towards the day. The USDCNH closed at 6.3786 with a gain of 0.04%.

This bullish move continued into trading on 19th April where the bulls gained momentum and the USDCNH rallied to close the day at 6.4160 up 0.59%, breaking above the highs that the pair had traded below for seven months. This bullish momentum continued throughout the week as the U.S. Dollar continued to gain strength posting higher closes over three consecutive days as it rallied to gain a further 1.69%. The USDCNH closed the full week at 6.5247, with a gain of 2.36% resulting in a significant weakening of the Yuan against the U.S. Dollar

This bullish momentum continued into the final week of April trading. The bulls continued to drive price higher through the majority of trading on 25th April and after a slight pull back during the U.S. trading session as the bears stepped in the USDCNH closed at 6.5693, a gain of 0.72% for the day.

Trading on 26th April was mixed as the bulls were again challenged but stood their ground and the pair closed higher at 6.5864 with a gain of 0.24%.

On 27th April, the USDCNH had no clear direction throughout the day and the USDCNH closed at 6.5881 with a slight gain of 0.02%. The bulls came back with more momentum during trading on 28th April as the pair rallied to close up by 1.06% at 6.6571.

The final trading day of April trading the U.S. Dollar bears took charge and the USDCNH dropped to close at 6.60820 down 0.72%. Even with this significant drop, the USDCNH closed the week with a gain of 1.32%.

With the strong upward moves in April the USDCNH has broken out of the sideways phase and into an uptrend on both daily and weekly charts. The USDCNH closed the month of April at 6.6082 up 4.04%. The largest monthly gain in the past decade (records to 2012).

UPCOMING HIGH IMPACT EVENTS

  • Wed 11 May CPI (Apr)
  • Tue 17 May Retail Sales (Apr)
  • Fri 20 May PBOC Interest Rate Decision
  • Tue 31 May NBS–Manufacturing & Non–Manufacturing PMI (Apr)


Asia Tech -

The ICE Asia Tech 30 Index (ATI) retested the March low at $3,415, as global equities broadly remained weak in April. The benchmark for technology stocks, Nasdaq Composite, saw its worst month since 2008. ATI traded April in a medium term downtrend and closed the month lower by 7.8%.

  • Chinese component stocks produced mixed price performance for April, with JD.com and Meituan having both performed well, with gains of 13.5% and 10.5% respectively. However, Kuaishou Technology was down again for the second consecutive month this time by 10.0%, and Xiaomi down 12.5%. Reversing the prior month’s gain, Alibaba Group Holding, fell by 8.9%.
  • Taiwan semiconductor components led the weakness with United Microelectronics Corp. falling 11.5% and Taiwan Semiconductor Manufacturing down 9.9%.
  • Japanese index component Sony performed the weakest falling 11.3% followed by Keyence, down 9.2%. Tokyo Electron Ltd. this month fell by 7.6%, joined by Nintendo down 6.0%.
  • Korean component stocks all fell with Kakao having reversed the prior month's price increase with a 15.6% fall, and Naver Corp, Korea’s top internet portal operator, suffered a 15.9% drop after it announced a significant drop in earnings year-on-year for the quarter.

DAILY TREND: DOWN

Source: ICE Connect

ATI retested the mid-March low at $3,415 after continuous down days for most of April as technology stocks globally were weak and reversed all of the gains achieved in March.

ATI had a strong last trading day of the month in contrast to the weakness experienced during the month, and closed the month at $3,616 with a -7.8% change.

Index Composition: 37% China, 23% Japan, 23% Taiwan and 17% South Korea

UPCOMING HIGH IMPACT EVENTS

  • Wed 11 May China CPI (Apr)
  • Tue 17 May Retail Sales (Apr)
  • Fri 20 May PBOC Interest Rate Decision
  • Tue 31 May China Non-Manufacturing PMI (May)


Oil -

Brent crude oil remained above the $95-$100 range in April, as negotiators between Russia and Ukraine attempted to move the two countries toward conditions that would allow for a cease fire. Brent reached around $115.00 mid-April and fell towards $95.00 before it ended the month trading towards $110.00. Brent crude oil closed the month 2.7% higher versus March at $106.08.

  • The OPEC+ meeting on Thursday 5th May expects a 432,000 barrels per day production increase for June. European nations are closer to a ban on Russian oil imports, but Covid lockdowns in China are expected to dampen demand leading to hesitancy from OPEC to raise production levels.
  • Germany has indicated that it will support a phased approach to a ban on Russian oil by the European Union according to Bloomberg. This will allow more time for countries such as Germany to secure alternative sources of oil, which could include the United States, Canada, and Iran.
  • Concerns of rising coronavirus cases in China have appeared to put a cap on oil prices for the moment. China, the world’s largest oil importer, could impose strict lockdowns to control any potential Covid-19 outbreaks, as seen in Shanghai recently, and therefore lead to lower demand.

DAILY TREND: SIDEWAYS

Source: ICE Connect

Brent held between $95.00 and $115.00 in a $20 point range as the Russian-Ukrainian conflict extended into its second month with no clear end in sight despite global efforts to encourage negotiations to end the war. Sanctions and increased moves to affect economic penalties on Russia are taking time to show results, as European nations balance their own economic needs and inflationary pressures from high oil prices.

Brent closed the month at $106.08 with a modest +2.7% change.

UPCOMING HIGH IMPACT EVENTS

  • Thr 5 May OPEC+ policy meeting to decide on whether to increase supply of oil in June by 432,000 barrels per day similar to prior months or by some other amount.u


Key Figures -

Source: ICE Connect, ~30 Days



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TRADDICTIV · Research Team

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