Daily Market Analysis by Solid ECN | *Video*

On the daily chart, the first wave of the higher level (1) of 5 forms, within which the wave 3 of (1) develops. Now, the first wave of the lower level i of 3 has formed, a local correction has ended as the second wave ii of 3, and the development of the third wave iii of 3 has started.

If the assumption is correct, the pair will grow to the levels of 1.32 - 1.341. In this scenario, critical stop loss level is 1.2401.

On the daily chart, the upward wave C develops, within which the first wave 1 of (1) of C forms. Now, the third wave of the lower level iii of 1 has developed, and a local correction is ending to form as the fourth wave iv of 1, within which the wave (e) of iv is developing.

If the assumption is correct, after the end of the correction the price will grow to the levels of 139.64 - 155. In this scenario, critical stop loss level is 97.73.

Raytheon Technologies Corporation is an American multinational aerospace and defense conglomerate headquartered in Waltham, Massachusetts. It is one of the largest aerospace, intelligence services providers, and defense manufacturers in the world by revenue and market capitalization.



The shares of Raytheon Technologies Corp., one of the largest US financial and industrial groups, are moving within a stable corrective trend near the level of 100.

On the daily chart, a narrow ascending channel is forming, within which the price once again failed to consolidate above the resistance line around 106 and returned to the channel, dropping to the support line at 99, coinciding with the initial correction level of 23.6% Fibonacci. The beginning of a global downward correction is possible only after the consolidation below the level.

Technical indicators signal the presence of a stable buy signal but do not rule out a downward correction: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram is forming downward bars in the buying zone.

The US dollar is developing flat trading dynamics in tandem with the yen during the Asian session, consolidating near 128. The development of the uptrend stopped last week, when USDJPY made new record highs, and the market plunged into a correction.

Meanwhile, demand for the US currency is increasing in anticipation of a more aggressive approach to tightening monetary policy parameters by the US Federal Reserve, pushing buyers to open new deals, while the Bank of Japan is only cautious about the risks of rising inflation in the country. The latter, however, does not frighten Japanese investors at all, who are accustomed to the deflationary characteristics of the national economy. The Bank of Japan is likely to keep its rate unchanged at -0.10% at its meeting on Thursday and refrain from major adjustments in its forecasts for further actions, as rising commodity prices force it to focus on maintaining the economic recovery after the coronavirus pandemic. Thus, in a broader sense, the Japanese yen is currently experiencing a "bullish" pullback after a consistent decline due to the regulator's ultra-loose monetary policy.

Macroeconomic statistics from Japan, released the day before, turned out to be restrainedly optimistic: the Coincident Index in February rose from 96.3 to 96.8 points, which turned out to be better than the negative forecasts of analysts for a decline to 95.5 points. The Leading Economic Index for the same period fell from 101.2 to 100.0 points, while the market expected 100.9 points. The Unemployment Rate in the country in March also corrected down from 2.7% to 2.6%.



Bollinger Bands on the daily chart show a steady increase. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is going down having formed a new sell signal (located below the signal line). Stochastic maintains a confident downtrend, being approximately in the center of its area.

Technical indicators do not contradict the development of the correctional decline in the short and/or ultra-short term.

Resistance levels: 128.62, 129.39, 130, 131 | Support levels: 127.5, 127, 126.3, 125.6

The euro is actively losing value in tandem with the US currency, dropping to its lowest level since 2017 against the backdrop of investors redirecting capital from risky assets to "protective" ones. Traders fear a slowdown in global economic growth and acceleration of inflation, and also hope for decisive steps to adjust monetary policy by the US Federal Reserve. In the event of an increase in the interest rate immediately by 0.50%, the US dollar will receive support, and experts believe that the US economy will be able to cope with geopolitical challenges better than the European one. Now the quotes of EURUSD are trading around 1.0502.

After the refusal of countries "unfriendly" to Russia to adhere to the new scheme of paying for energy resources in rubles, the day before, the PJSC Gazprom announced the termination of gas supplies to Poland and Bulgaria. Against this background, the exchange price of gas soared by 16% and rose above 1.35K dollars per thousand cubic meters. A number of countries have already recognized this step as a violation of the terms of the contract, but assured the population that in case of force majeure, fallback options have long been provided. European Commission President Ursula von der Leyen noted the unreliability of Russia as an energy supplier, saying that Poland and Bulgaria will now receive "blue fuel" from other countries, but she did not specify the cost of these supplies. In addition, eurozone macroeconomic indicators continue to deteriorate. The German Gfk Consumer Confidence Survey fell to -26.5 points from -15.7 points a month earlier, and the French Consumer Confidence Index fell from 90 to 88 points.

The American currency, on the contrary, continues to rise and yesterday reached its highs over the past six years, having consolidated above 103.000 in the USD Index. The dynamics of the dollar cannot be pressured even by the deterioration in the borrowing market, where for the seventh month in a row the growth of the rate on 30-year mortgage loans has continued. The day before, the indicator reached 5.37%, up from 5.20%, which once again leads to higher cost of loans for those wishing to purchase housing in the United States.



EURUSD continues to trade within a wide downward channel, coming close to the support line. Technical indicators maintain the global sell signal: the fast EMAs of the Alligator indicator are below the signal line, and the histogram of the AO oscillator continues to decline in the sell zone, forming descending bars.

Support levels: 1.0432, 1.005 | Resistance levels: 1.0636, 1.112

Quotes of the precious metal are being corrected in a downtrend, being at around 1883.

Investors are showing an active interest in gold as a defensive asset after the freezing of Russia's gold and foreign exchange reserves against the backdrop of sanctions imposed after the start of a special military operation in Ukraine. According to the statistics of the World Gold Council, in Q1 2022, demand increased by 34%, reaching 1.234K tons, while the volume of supply in the same period was fixed at 1.157K tons. Despite the positive statistics, at the moment one can observe a downward correction in XAU/USD, which is caused by the market's expectation of the US Federal Reserve meeting scheduled for May 4 and the tightening of the US monetary policy parameters.



Additional pressure on the metal comes from its main consumer, China. The outbreak of coronavirus in the country has not yet been contained, and last week there were reports of an increase in the incidence in its capital. Investors are seriously afraid that the authorities may impose quarantine restrictions, similar to those currently in effect in Shanghai (a total lockdown has been introduced in the industrial center, and residents are undergoing daily mass testing for COVID-19). Against this background, according to the data of the National Bureau of Statistics of the People's Republic of China, the index of business activity in the Chinese manufacturing sector in April fell to 47.4 points from 49.5 points, continuing to fall from the psychologically important level of 50 points separating growth from recession. Business activity in the non-manufacturing sector fell even more and amounted to 41.9 points against 48.4 points in March.

Thus, the number of gold contracts decreased to 218.0K from 239.8K a week earlier, according to the US Commodity Futures Trading Commission (CFTC).



On the daily chart, the price is correcting as part of a local decline wave, approaching a global support line located in the area of 1810. Technical indicators have already reversed and issued a signal to open short positions: fast EMAs on the Alligator indicator continue to expand the range of fluctuations, and the histogram of the AO oscillator, having moved into the sell zone, forms descending bars.

Support levels: 1870, 1810 | Resistance levels: 1916, 1978

On the daily chart, GBPJPY is correcting above 157.96 and 159 levels. On the 4H time frame, the pair violated the ascending trendline with a weak selling force. The breach could be a whipsaw. However, if the breakout is correct, the instrument will target 157.96 and 159 supports. This scenario remains operational as long as GBPJPY trades below the 25 daily moving average and the descending trendline.



On the other hand, the uptrend continues if the bulls breach the descending trendline and the 25 moving average. In this scenario, the pair will target 164.24 and 168.42.

The European currency traded with mixed dynamics against the US dollar during the Asian session, consolidating near 1.05. The day before the euro made an attempt to grow, having received support from the optimistic statements of the President of the European Central Bank (ECB), but the "bulls" failed to consolidate on new local highs. EURUSD eventually returned to the "red" zone, continuing the development of flat dynamics in the short term.

The European regulator is likely to complete the asset buyback at the beginning of Q3 2022, after which it will start raising the interest rate. This was stated by the ECB President Christine Lagarde the day before, speaking in Ljubljana. Last month, officials continued their "dovish" policy from 2011 and left the interest rate on the main refinancing operations, the rate on the deposit facility and the rate on the marginal lending facility at 0.00%, -0.50% and 0.25%, respectively. Experts believe that the ECB will increase the figures in July and September, and bring the deposit rate to 1.5% within two years. However, much will depend on the development of the military conflict in Ukraine, where the situation is still extremely tense.

Meanwhile, Hungary announced its readiness to impose an embargo on Russian resources, but the Minister of Foreign Affairs and Trade, P?ter Szijj?rt?, voiced a number of demands. In particular, he noted that the country expects concrete measures from the EU to reduce the negative consequences for the national economy if a decision is made. According to Szijj?rt?, official Budapest will support the pan-European embargo if it does not concern oil pipelines. Now about 65% of oil from Russia comes through the Druzhba pipeline, and the Hungarian economy does not yet have alternative options for replacing these resources.

Macroeconomic statistics from Europe published on Wednesday did not have a noticeable impact on the instrument's dynamics. Consumer Price Index in Germany in April showed an increase of 0.8%, which also fully coincided with market expectations. In annual terms, inflation fixed at around 7.4%.



Bollinger Bands on the D1 chart still maintain a moderate downward direction. The price range is actively narrowing, reflecting the emergence of multidirectional trading dynamics in the short term. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic, on the contrary, keeps its downward direction, indicating the predominance of "bearish" sentiment in the ultra-short term.

To open new trading positions, it is necessary to wait for the signals from technical indicators to be clarified.

Resistance levels: 1.0576, 1.064, 1.069, 1.0726 | Support levels: 1.05, 1.047, 1.04, 1.035