Bank of Canada become the first global central bank to taper
Central bank taper
The Bank of Canada became the first global central bank to taper QE, as Canadian policy makers agreed on Wednesday to scale back their bond buying program. The Central bank communicated to that market it was going to reduce bond purchases by a quarter, to $2.4 billion, and also agreed to speed up the timetable for a potential interest rate increase. The central bank noted that they made the decision to taper because Canadian economic data points had improved considerably since the previous policy meeting, which included, jobs, retail sales, and manufacturing. The market reaction saw the Canadian dollar currency firm broadly on the foreign exchange market, with the USDCAD pair tumbling below the 1.2500 support level.
- USDCAD is only bullish while trading above the 1.2650 level, key resistance is found at the 1.2770 and 1.2810 levels.
- USDCAD is only bearish while trading below the 1.2650 level, key support is located at the 1.2360 and 1.2300 levels.
United States stock markets suffered another bout of major price volatility, after the Biden administration proposed a staggering rise in Capital Gains Tax. Reports that President Biden was about to propose a rise in the US Capital Gains Tax to 43.3 percent on wealthy individuals. The market reaction saw stocks falling on the news, following another extremely volatile trading week for the Dow Jones Industrial Average, S&P 500, and the Nasdaq. Traders and investors generally kept a fairly cautious tone as earnings season in the United States are starting to get under way, with some of the top tech names, such as Apple and Google are about to release earnings figures to the market.
- The S&P 500 is only bearish while trading below the 4,080 level, key support is found at the 4,000 and 3,960 levels.
- The S&P 500 only bullish while trading above the 4,080 level, buyers may test towards the 4,200 and 4,300 resistance levels.
Bitcoin tanked below the $50,000 level this week, as the top cryptocurrencies overall market dominance fell below the 50 percent level as Ethereum outperformed its nearest rival. Spiraling transaction costs fears over upcoming cryptocurrency regulation and a plunge in Bitcoin’s hash rate were all reasons behind the weekly price drop. Technical metrics surrounding Bitcoin also signaled severe weakness this week, as Bitcoin dropped below its 50-day Exponential Moving Average for the first-time since the bull run begun last year. Bitcoin’s main competitor, Ethereum, significantly outpaced the top cryptocurrency and headed towards a new all-time price high this week.
- The BTCUSD pair is only bearish while trading below the $55,000 level, key support is found at the $47,000 and $44,000 levels.
- If the BTCUSD pair trades above the $55,000 level, buyers may test towards the $56,500 and $57,000 resistance levels.
The European central bank kept interest rates unchanged as widely expected this week, and maintained the Pandemic Emergency Payment Programme, otherwise known as PEPP. The central bank largely kept to script from the previous policy meeting and offered an overall downbeat assessment of the European economy. This weeks preliminary April PMI release from the eurozone showed continued growth inside Europe’s manufacturing sector. The official EU Manufacturing PMI advanced to 63.3, while the German Manufacturing PMI hit 66.4. The EURUSD pair had a solid week on the foreign exchange market and rallied on the strong eurozone manufacturing numbers.
- The EURUSD pair is only bearish while trading below the 1.1980 level, key support is found at the 1.1950 and 1.1890 levels.
- The EURUSD pair is only bullish while trading above the 1.1980 level, buyers may test towards the 1.2100 and 1.2200 resistance levels.