USD/JPY Price Analysis – April 18, 2024
Daily Price Outlook
During Thursday's European session, the USD/JPY currency pair has sustained an upward trend, demonstrating recent bullish performance as investors show a preference for the US Dollar over the Japanese Yen. This trend is influenced by various factors, including economic indicators and market sentiment. Investors' confidence in the US economy has notably impacted the bullish performance of the USD/JPY pair. Simultaneously, the US economy's resilience amid global economic challenges has led investors to favor the US Dollar as a safe-haven currency.
Additionally, the Federal Reserve's commitment to maintaining higher interest rates for an extended period has increased the appeal of the US Dollar, resulting in heightened demand for USD-denominated assets and further strengthening the bullish stance of the USD/JPY pair.
Japan's Potential FX Intervention and Its Impact on USD/JPY Stability
On the JPY front, investors are increasingly worried about Japan's potential intervention in the FX market to bolster the Japanese Yen. This intervention is seen as a short-term tactic to halt the Yen's decline. Masato Kanda, Japan's Vice Finance Minister for International Affairs, indicated that authorities are open to various strategies to address significant Yen fluctuations.
This announcement has made market players anxious about how this intervention might affect the USD/JPY pair. The uncertainty stems from questions about the intervention's effectiveness, duration, and the ensuing volatility it could bring to currency trading strategies and risk management practices.
Therefore, the potential intervention by Japan to support the Japanese Yen has caused uncertainty and anxiety among market players regarding its impact on the USD/JPY pair's stability and volatility.
Strong US Retail Sales Data Supports USD and Delays Fed Rate Cut Speculations
On the USD front, the previously rleeased strong Retail Sales data indicated a robust US economy. This led to speculation that the Federal Reserve (Fed) might postpone its plans to ease monetary policy this year. Fed Chair Jerome Powell mentioned a willingness to delay rate cuts due to unexpectedly higher inflation readings. The central bank intends to wait until it's more confident that inflation will reach the 2% target before considering lowering borrowing rates. This stance supports the US dollar and contributed to the USD/JPY gains.
Therefore, the strong Retail Sales data and Fed's willingness to delay rate cuts due to higher inflation have boosted confidence in the US economy, supporting the USD and contributing to gains in the USD/JPY pair.
USD/JPY - Technical Analysis
The USD/JPY pair has slightly retreated today, recording a marginal decrease of 0.09%, and is currently priced at ¥154.284. Despite this slight downtick, the pair hovers above critical technical levels that could dictate short-term movements.
The pivot point for today stands at ¥153.93, acting as a baseline for the session's trading dynamics. If the pair maintains above this level, it could attempt to reach the immediate resistance at ¥154.75, followed by higher resistance levels at ¥155.36 and ¥155.99, which could serve as significant barriers to further upward movement. Conversely, support lies at ¥153.41, with additional levels at ¥152.81 and ¥151.95, where dips might find a floor, preventing deeper losses.
The Relative Strength Index (RSI) is at 58, suggesting a somewhat bullish sentiment but nearing the overbought territory, which might limit the potential for significant upside gains. The 50-day Exponential Moving Average (EMA) is at ¥153.24, currently below the pair's price, indicating an underlying bullish trend in the medium term.
For traders looking to capitalize on current market conditions, a buying strategy above the pivot point at ¥153.950 is advisable, targeting a take profit level at ¥155.000, with a stop loss set at ¥153.400 to manage risks.
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AUD/USD Price Analysis – April 18, 2024
Daily Price Outlook
The AUD/USD currency pair has extended its strong upward rally and still flashing green around 0.6445 level. However, the reason for its upward trend can be attributed to the multiple factors including the upbeat performance of ASX 200 Index's.
The ASX 200 Index, a key indicator of Australia's stock market performance, has been gaining ground, particularly notable on Thursday. This upward movement in the index has a positive impact on the Australian Dollar (AUD) against the US Dollar (USD), contributing to the bullish trend in the AUD/USD currency pair.
At the same time, there has been a decline in US Treasury yields, which affects the strength of the US Dollar. Lower yields can reduce the attractiveness of dollar-denominated assets, leading to a weaker US Dollar. This downward pressure on the USD also supports the bullish performance of the AUD/USD pair.
Australian Dollar Strength and Economic Data Impact on AUD/USD Pair
On the AUD front, the Australian Dollar is gaining strength as the ASX 200 Index rises. This boost is fueled by mining stocks performing well due to higher metals prices. A report from Westpac mentions that the Reserve Bank of Australia (RBA) doesn't plan to increase rates soon but wants to be more confident about inflation before considering rate cuts.
On the data front, Australia's Employment Change in March was -6.6K, falling short of the expected 7.2K and the previous 117.6K. Additionally, the Unemployment Rate rose to 3.8%, slightly below the anticipated 3.9% but higher than the previous 3.7%.
Therefore, the AUD/USD currency pair see upward pressure due to the Australian Dollar gaining strength from a rising ASX 200 Index and positive mining stocks. However, weaker employment data could potentially limit the AUD's gains.
Federal Reserve Concerns and Potential Impact on USD and AUD/USD Pair
On the US front, Federal Reserve officials in the US are worried because inflation is higher than they expected. Loretta Mester from the Federal Reserve Bank of Cleveland said they need to be sure that inflation stays around 2%, and they might lower interest rates if the job market gets worse. Fed Governor Michelle Bowman also noticed that inflation is slowing down, and the policies they have now are a bit strict and need to be checked. The Federal Reserve's Beige Book survey found that the US economy is growing a little bit, but businesses are struggling with higher costs.
Therefore, the concerns expressed by Federal Reserve officials about inflation and monetary policy could impact the US Dollar, weakening it if a rate cut occurs due to worsening labor market conditions. This could influence the AUD/USD pair.
AUD/USD - Technical Analysis
The Australian dollar (AUD) has shown resilience against the US dollar (USD) today, recording a modest gain of 0.31% to trade at $0.64541. This movement indicates a positive shift in market sentiment towards the AUD amidst varying global economic conditions.
The pair is currently trading just above its pivot point at $0.6439, suggesting a potential for further upward movement. Immediate resistance is observed at $0.6494, with subsequent levels at $0.6545 and $0.6591. These are critical junctures where sellers might emerge, capping further advances. On the downside, support can be found at $0.6401, $0.6373, and $0.6339. These levels will be crucial in preventing a reversal of the current gains.
The Relative Strength Index (RSI) at 49 mirrors the market’s neutrality, indicating neither overbought nor oversold conditions, and suggests that there is room for movement in either direction. The 50-day Exponential Moving Average (EMA) is set at $0.65, slightly above the current price, indicating that the AUD/USD could face resistance as it attempts to regain higher levels.
Traders looking to capitalize on the AUD's current trajectory should consider entering the market at $0.64381, targeting a take profit at $0.64944, with a stop loss at $0.64018 to manage risk effectively.
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GOLD Price Analysis – April 17, 2024
Daily Price Outlook
Gold price (XAU/USD) has maintained its upward trend and hit all-time highs around the $2,392 level as investors turned to safe-haven assets like gold amidst economic uncertainty. Meanwhile, the ongoing tensions in the Middle East, coupled with mixed economic data and hawkish comments from Federal Reserve Chair Jerome Powell, have contributed to the bullish sentiment surrounding gold. Investors traditionally turn to gold during times of uncertainty and market volatility. Meanwhile, geopolitical tensions and concerns about inflation have fueled demand for the precious metal, pushing prices upwards.
Fed Chair Powell's Hawkish Stance and Mixed US Data: Impact on Gold
On the US front, the Federal Reserve Chair Jerome Powell's recent comments on maintaining higher interest rates until inflation eases to 2% have bolstered the US dollar and bond yields. However, this hawkish stance, combined with strong labor demand and mixed economic data, has created a more bullish environment for the US dollar. Therefore, the stronger US dollar typically exerts downward pressure on gold prices, as it becomes more expensive for investors holding other currencies to purchase gold.
Powell's comments and mixed US data have caused gold to struggle in maintaining its new all-time highs. Although geopolitical tensions offer some support, overall sentiment is cautious due to the Fed's restrictive policy framework.
Escalating Middle East Tensions and Gold's Safe-Haven Appeal
On the geopolitical front, the escalating tensions in the Middle East, particularly between Israel and Iran, have added to the safe-haven appeal of gold. However, the recent attack by Iran on Israel and the threat of retaliatory measures have heightened geopolitical risks, prompting investors to seek refuge in assets perceived as safe, such as gold.
According to recent reports, an Israeli air attack in Gaza destroyed a mosque and nearby homes, causing injuries to many, including children and women. Iran warned Israel of a strong response to any action against its missile attacks. Israel is urging 32 countries to impose sanctions on Iran's military and missile program.
Israeli settlers are causing violence in the West Bank, and more troops are deployed. Over 33,843 Palestinians have died, and 76,575 are wounded in Gaza from Israeli attacks since October 7.
GOLD (XAU/USD) - Technical Analysis
On April 17, gold prices observed a slight decline, settling at $2,377.20, down 0.31% from the previous trading session. The precious metal is currently trading below its pivot point of $2,389, signaling a cautious sentiment among investors. Technical resistance levels are set at $2,410, $2,432, and $2,454, which gold would need to surpass to regain a bullish stance. However, immediate support levels loom at $2,334, followed by $2,305 and $2,277, which could come into play if downward pressure continues.
The Relative Strength Index (RSI) stands at 54, indicating a neutral market momentum, neither overbought nor oversold at this juncture. Meanwhile, the 50-day Exponential Moving Average (EMA) at $2,352 supports the notion of a medium-term upward trend in gold prices. This is reinforced by the positioning of the 200 EMA, suggesting a sustained bullish sentiment over a longer period.
Given the current market setup, traders might consider a strategic approach: entering a sell position if gold prices fall below $2,390, aiming for a take profit at around $2,350, with a stop loss set at $2,410.
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EUR/USD Price Analysis – April 17, 2024
Daily Price Outlook
The EUR/USD pair has continued its downward rally, experiencing a bearish trend around 1.0620 on Wednesday. This decline can be attributed to various factors, including a hawkish Fed, safe-haven flows toward the US dollar, and expectations of ECB rate cuts. These influences are expected to persist, with market participants closely monitoring central bank policies and economic indicators for further insights.
Hawkish Comments from Fed Officials and Safe-Haven Flows:
On the US front, the hawkish tone from Fed officials, including Powell, has contributed to safe-haven flows into the USD. Powell's positive remarks about the job market and his concerns about inflation have made investors prefer the USD as a safe-haven asset. Additionally, recent US economic data, such as the decrease in Housing Starts and Building Permits, has further boosted the USD's appeal, exerting additional downward pressure on the EUR/USD pair.
On the data front, US Building Permits fell to 1.458 million in March, below the expected 1.514 million, while Housing Starts dropped to 1.321 million, missing the anticipated 1.480 million. However, US Retail Sales increased by 0.7% in March, exceeding expectations of 0.3% and revised upwards from 0.6% in February. These factors, along with Jerome Powell's hawkish comments, contributed to downward pressure on the EUR/USD pair.
ECB's Plans to Cut Rates and Impact on EUR/USD:
On the Euro front, speculation about the ECB lowering interest rates in June could negatively impact the EUR/USD pair. This anticipation could lead to a weakening of the euro against the dollar as investors adjust their positions in response to the rate cut. Lagarde's comments signaling a rate cut and concerns over the Eurozone's economic outlook and inflationary pressures contribute to a bearish sentiment for the euro. Besides this, monitoring oil prices due to Middle East tensions adds to the uncertainty, adding downward pressure on the euro.
EUR/USD - Technical Analysis
On April 17, the EUR/USD pair traded slightly lower, closing at 1.06113, a 0.06% decrease from the previous session. This minor pullback reflects a cautious market sentiment as traders evaluate the latest economic cues from both Europe and the United States. The pair currently sits below its pivot point of 1.0630, suggesting a bearish bias in the near term. Immediate resistance is observed at 1.0685, with additional barriers at 1.0726 and 1.0787. Should the pair break above these levels, it could signal a shift towards a bullish outlook.
Conversely, support for the EUR/USD is found at 1.0600, followed by 1.0571 and 1.0528. Breaking below these levels could accelerate the bearish trend, pushing the pair to lower valuations. The Relative Strength Index (RSI) at 29 indicates that the pair is currently in the oversold territory, which might trigger a corrective rebound if bullish triggers emerge in the market.
The 50-day Exponential Moving Average (EMA) at 1.0741 further illustrates that the pair is trading below medium-term moving averages, supporting the current bearish perspective. Considering these factors, traders might consider a short position at a break below 1.0630, with a take profit target at 1.0571 and a stop loss at 1.0671 to manage risk effectively.
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GBP/USD Price Analysis – April 17, 2024
Daily Price Outlook
Despite the bullish US dollar, the GBP/USD currency pair has managed to stop its downward trend and has been showing a bullish trend, reaching around the $1.2430 level. However, the reason for its upward movement is the positive performance of the UK Consumer Price Index (CPI). In March, the CPI rose by 3.2%, exceeding market expectations of 3.1%. This upbeat economic indicator has bolstered confidence in the British economy, leading to increased demand for the Pound Sterling (GBP) and pushing the pair higher.
In contrast to this, the stronger US dollar and the Federal Reserve's hawkish stance on rate cuts were seen as one of the key factors that kept the lid on any additional gains in the GBP/USD pair.
Positive UK CPI Data Supports GBP/USD Pair Amid Economic Confidence
On the data front, the United Kingdom's Consumer Price Index (CPI) rose by 3.2% year-over-year in March, slightly slower than the 3.4% increase in February but beating expectations of a 3.1% rise. The Core CPI, which excludes volatile items like food and energy, grew by 4.2% annually, lower than February's 4.5% but above the anticipated 4.1%. March's Services CPI increased by 6.0% compared to the previous year, slightly down from February's 6.1% growth. Month-on-month, UK inflation stayed steady at 0.6% in March, matching February's rate. T
Therefore, the positive UK CPI data, despite a slight slowdown in growth, supported the GBP/USD pair, pushing it towards the $1.2450 level due to increased confidence in the British economy.
GBP/USD Pair Faces Downward Pressure from Hawkish Fed Comments and Strong US Retail Sales
On the other side of the pair, the broad-based US Dollar has seen upside momentum due to comments from Federal Reserve (Fed) Chair Jerome Powell. Powell's hawkish stance on monetary policy, emphasizing the need for a longer period of restrictive measures, has strengthened the US dollar. In addition to this, positive US Retail Sales data has further boosted confidence in the American economy, exerting pressure on the GBP/USD pair.
On the data front, US Building Permits dropped to 1.458 million in March, below the expected 1.514 million, while Housing Starts fell to 1.321 million, missing the anticipated 1.480 million. However, US Retail Sales rose by 0.7% in March, surpassing expectations of 0.3% and revised upwards from 0.6% in February.
Therefore, the GBP/USD pair faced downward pressure from Jerome Powell's hawkish comments and positive US Retail Sales data, strengthening the US dollar against the British pound.
Bank of England Rate Cut Expectations Impact GBP/USD Pair
On the UK front, Investors have been pricing in the possibility of two rate cuts by the Bank of England (BoE) within this year, with expectations of the first cut potentially in August or September. This anticipation has created uncertainty in the forex market, leading to some selling pressure on the Pound (GBP) and impacting the GBP/USD pair's performance.
Therefore, the expectations of rate cuts by the Bank of England have introduced uncertainty, creating selling pressure on the Pound (GBP) and influencing the performance of the GBP/USD pair.
GBP/USD - Technical Analysis
On April 17, the GBP/USD pair experienced a slight increase, closing at 1.24394, up by 0.10%. This modest gain suggests a tentative optimism among traders as they navigate a mix of economic signals from both the UK and the US. Currently, the pair is trading below the pivotal level of 1.2511, which acts as a key juncture for future price movements.
Immediate resistance is established at 1.2470, with subsequent levels at 1.2512 and 1.2568. A breach of these resistance points could signal a strengthening of the bullish momentum. On the downside, the pair finds initial support at 1.2375. Further declines could see the GBP/USD testing support at 1.2332 and 1.2295, potentially reinforcing a bearish trend if these levels are penetrated.
The Relative Strength Index (RSI) at 37 suggests that the currency pair is nearing oversold territory, indicating potential for an upward correction if bullish triggers are present in the market. The 50-day Exponential Moving Average (EMA) at 1.2552 also supports this view, as it lies just above the current price level, hinting at underlying buying pressure.
Given the technical setup, a prudent trading strategy would be to initiate a buy position if the GBP/USD moves above 1.24198, targeting a profit at 1.25114, while setting a stop loss at 1.23728 to manage potential downside risks.
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USD/CAD Price Analysis – April 16, 2024
Daily Price Outlook
The USD/CAD currency pair has been on an upward trajectory, marking its third consecutive day of bullish movement and reaching a new high near the 1.3810 mark. This surge is driven by several factors, including diminishing expectations of a Federal Reserve (Fed) rate cut. Investor sentiment regarding a potential rate cut has decreased, supporting the US dollar as investors anticipate the Fed delaying such actions due to persistent inflation. The positive outlook for the US dollar is also strengthened by robust US Retail Sales figures, suggesting strong consumer spending that could contribute to inflation and eventual interest rate hikes.
In the meantime, the geopolitical risks have increased demand for the safe-haven USD as tensions in the Middle East, especially between Israel and Iran after a missile and drone attack, have heightened risk aversion among investors. This uncertainty has subdued sentiment in equity markets, supporting safe-haven assets like the USD and providing additional support to the USD/CAD pair.
Reduced Fed Rate Cut Bets and Geopolitical Risks Support USD/CAD Pair
As mentioned above, the bullish performance of the USD/CAD pair is supported by reduced expectations of Fed rate cuts and ongoing geopolitical risks. The market perceives that the Fed may delay rate cuts due to inflationary pressures, strengthening the US dollar and making it more attractive to investors. Furthermore, geopolitical tensions, particularly in regions like the Middle East, have increased the appeal of the USD as a safe-haven currency. Investor concerns about potential escalations in conflicts have led them to seek refuge in USD-denominated assets, contributing to the pair's upward trajectory.
Impact of Uptick in Oil Prices on the Loonie and Negative Impact on USD/CAD Pair
On the other hand, the Canadian Dollar, often referred to as the Loonie, is influenced by movements in Oil prices due to Canada's significant Oil exports. An uptick in Oil prices tends to strengthen the CAD, as it boosts Canada's export revenues and overall economic outlook. This uptick in Oil prices has provided support to the Loonie, preventing further gains for the USD/CAD pair.
USD/CAD - Technical Analysis
In today's trading session, the USD/CAD pair exhibited a modest gain of 0.16%, reaching $1.38057, indicating a bullish trend. The chart analysis reveals pivotal levels, with the pivot point established at $1.3779. Immediate resistance levels are noted at $1.3836, followed by $1.3891 and $1.3941. Conversely, support levels are identified at $1.3726, $1.3663, and $1.3614, highlighting crucial areas to monitor for potential price movements.
Technical indicators suggest a bullish sentiment, with the Relative Strength Index (RSI) currently at 73, signaling an overbought condition. Additionally, the 50-day Exponential Moving Average (EMA) stands at $1.3645, further supporting the bullish outlook.
Considering the prevailing market conditions, an entry price for buying is advised above $1.37804. The recommended take profit level is set at $1.38757, while a stop-loss order is suggested at $1.37193 to mitigate potential downside risks.
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GOLD Price Analysis – April 16, 2024
Daily Price Outlook
Gold prices (XAU/USD) maintained their upward trend and remained well-bid around the $2,390 level. This upward trend can be attributed to the worsening Middle East crisis, which weighs on investors’ sentiment and benefits the metal. On the other hand, the reduced expectations of a Federal Reserve interest rate cut boosted the US dollar to its highest level so far this year, which limited the gains for the gold price. The broad-based US dollar hit to its highest level since early November due to expectations that the Federal Reserve (Fed) will delay cutting interest rates amid sticky inflation. This was seen as one of the key factor that kept the lid on any additional gains in the gold price.
Moving ahead, traders are keeping their eyes on US economic docket, which features the release of housing market data and Industrial Production figures. These, along with Fed's statements, will also be in spotlight.
Impact of Strong US Dollar and Retail Sales Data on Gold Prices
On the US front, the broad-based US dollar has been strengthening, reaching over a five-month peak due to ongoing concerns about the Middle East crisis and expectations that the Federal Reserve will maintain higher interest rates for a longer period. This has acted as a negative factor for the price of gold. Investors are delaying their predictions for the first Fed interest rate cut, now expecting it in September instead of June, due to worries about persistent inflation and a robust US economy.
On the data front, the release of upbeat US Retail Sales data for March has also impacted the gold price. On the data front, the US Census Bureau reported that Retail Sales increased by 0.7% month-on-month (MoM) in March. This surpassed expectations, which predicted a 0.3% rise, and also exceeded the previous month's growth of 0.9%, which was revised upward. The data, indicating a stronger-than-expected increase in retail sales, showed robust consumer spending and suggests support for inflation in the coming months.
Therefore, the robust US dollar is exerting downward pressure on gold prices, driven by concerns such as the Middle East crisis and expectations of prolonged higher interest rates by the Federal Reserve.
Impact of Middle East Geopolitical Tensions on Gold Prices
On the geopolitical front, Iran's attack on Israel over the weekend heightened tensions in the Middle East, increasing the risk of further conflicts. This situation benefited safe-haven assets like Gold, which saw a positive boost at the start of the new week. Israeli officials are considering retaliation, but the US made it clear that it won't join any offensive actions against Iran. As per the latest report, Iran fired over 300 projectiles at Israel in retaliation for an earlier strike. Israel hasn't responded yet, but tensions are high as both sides warn of stronger actions.
Therefore, the heightened tensions in the Middle East following Iran's attack on Israel led to a positive boost in the Gold price as investors sought safe-haven assets amid geopolitical uncertainty.
GOLD (XAU/USD) - Technical Analysis
In today's technical outlook for GOLD on April 16th, the precious metal experienced a decline, reaching $2371.99, marking a decrease of 0.58%. Analyzing the chart timeframe, the pivot point is established at $2351, indicating a pivotal level for potential price movements. Immediate resistance levels are observed at $2410, followed by $2432 and $2454. Conversely, immediate support lies at $2334, with subsequent levels at $2305 and $2277.
Technical indicators highlight the significance of the 50-day Exponential Moving Average, currently at $2341. Notably, a double top pattern is forming, exerting resistance around $2389. This pattern, coupled with the presence of a doji candle below this level, suggests a potential shift towards a selling trend.
In conclusion, traders may consider a sell strategy below $2389, with a take-profit target at $2350 and a stop-loss set at $2410. These key price levels and technical insights provide valuable guidance for navigating gold's current market dynamics.
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AUD/USD Price Analysis – April 16, 2024
Daily Price Outlook
The AUD/USD currency pair has been experiencing a bearish performance and remained well-offered around the 0.6410 level. This downward trend can be attributed to several factors, including risk-off market sentiment fueled by heightened geopolitical tensions, particularly in the Middle East. Traders are closely monitoring developments related to Israel’s response to Iran’s recent air assault, leading to a cautious approach in the market.
Besides this, the differing monetary policy outlooks between the Reserve Bank of Australia (RBA) and the Federal Reserve (Fed) have added pressure on the Australian currency. It should be noted that the RBA may need to consider lowering interest rates, contrasting with the potential for the Fed to maintain a more stable or even hawkish stance.
On the data front, China's Gross Domestic Product (GDP) increased by 1.6% from the previous quarter and by 5.3% compared to last year, beating expectations. Industrial production rose by 4.5% in March, slightly lower than expected, and retail sales went up by 3.1%, lower than February's increase. Therefore, China's positive GDP growth and industrial production could help limit deeper losses for the AUD/USD by supporting confidence in economic recovery and demand from China, a key trading partner.
RBA's Potential Interest Rate Cuts and Impact on AUD/USD Pair
On the AUD front, the Reserve Bank of Australia (RBA) is facing increasing speculation about the necessity of lowering interest rates. This prospect has raised concerns among investors and traders, impacting the AUD/USD currency pair. If the RBA decides to cut interest rates, it could lead to a depreciation of the Australian Dollar (AUD) against the US Dollar (USD).
Meanwhile, lower interest rates generally make a currency less attractive to investors seeking higher yields, resulting in capital outflows and downward pressure on the AUD/USD pair. Investors are closely monitoring economic indicators and RBA statements for clues about the future direction of interest rates, as such decisions can significantly influence currency movements.
US Dollar Supported by Strong Retail Sales: Impact on AUD/USD
On the US front, the US dollar has received support recently due to stronger-than-expected US Retail Sales figures. This positive economic data has bolstered confidence in the US economy and diminished sentiments regarding early Federal Reserve (Fed) rate cuts. The stronger Retail Sales data reflects robust consumer spending, a crucial component of economic growth. Therefore, the stronger US Retail Sales data has bolstered the US dollar (USD) and could lead to downward pressure on the Australian Dollar (AUD) against the USD in the AUD/USD currency pair.
Impact of Geopolitical Tension on AUD/USD Pair
On the geopolitical front, ongoing tensions and risk-off market sentiment have also influenced the AUD/USD currency pair. Traders are cautiously monitoring developments related to Israel’s response to Iran’s recent air attack, leading to a more conservative approach in the forex market. However, the heightened geopolitical risks can lead investors to seek safe-haven assets such as the US Dollar, contributing to its strength relative to riskier currencies like the Australian Dollar (AUD).
AUD/USD - Technical Analysis
In today's AUD/USD technical outlook, the pair declined by 0.46% to reach $0.64154, showcasing a bearish sentiment. The pivot point stands at $0.6444, indicating a critical level for market sentiment. Immediate resistance levels are noted at $0.6488, followed by $0.6527 and $0.6553, while support levels are at $0.6408, $0.6382, and $0.6357. Technical indicators reveal the Relative Strength Index (RSI) at 26, suggesting an oversold condition.
Additionally, the 50-day Exponential Moving Average is positioned at $0.6547, signifying a barrier to upside movement. The presence of a double top pattern near $0.6444 suggests persistent resistance, potentially driving a selling trend. As per the technical analysis, an entry strategy below $0.64436 with a take profit target of $0.63829 and a stop loss at $0.64788 could be considered.
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GOLD Price Analysis – April 15, 2024
Daily Price Outlook
Gold prices (XAU/USD) maintained their upward trend and regained positive traction, hitting an intraday high around the 2,372 level. The reason for this upward trend could be attributed to Iran’s attack on Israel over the weekend, which bolstered the safe-haven asset of gold prices. The attack increased tensions in the Middle East, making safe-haven precious metals more attractive. Additionally, the sluggish performance of the US dollar, backed by mixed factors, was seen as another key factor that kept gold prices higher. Moving ahead, traders are waiting for more clues from upcoming US data, specifically the Retail Sales and Empire State Manufacturing Index, to make informed decisions.
Geopolitical Tensions Drive Gold Price Boost
On the geopolitical front, Iran's attack on Israel over the weekend heightened tensions in the Middle East, increasing the risk of further conflicts. This situation benefited safe-haven assets like Gold, which saw a positive boost at the start of the new week. Israeli officials are considering retaliation, but the US made it clear that it won't join any offensive actions against Iran. As per the latest report, Iran fired over 300 projectiles at Israel in retaliation for an earlier strike. Israel hasn't responded yet, but tensions are high as both sides warn of stronger actions.
Therefore, the heightened tensions in the Middle East following Iran's attack on Israel led to a positive boost in the Gold price as investors sought safe-haven assets amid geopolitical uncertainty.
Challenges for Gold Amid Fed's Delayed Rate Hike and Strong Dollar
On the US front, investors are delaying their expectations for the first Federal Reserve rate hike to September due to persistent inflation concerns. They recently adjusted their predictions for the Federal Reserve's initial interest rate reduction, moving it from June to September. This change came after the release of US consumer inflation data, which exceeded expectations and hinted at stronger price pressures.
Consequently, investors now anticipate that the Fed may delay its intervention to address these inflationary trends until later in the year. This delay supports higher US Treasury bond yields, keeping the US Dollar strong and creating challenges for Gold.
Besides this, traders now expect fewer rate cuts in 2024 than the Fed's projections, further strengthening the US Dollar to its highest level in months. This hawkish stance from the Fed, coupled with a strong Dollar, could cap gains in Gold prices ahead of key US economic data releases. Therefore, the delay in the Federal Reserve rate hike, coupled with expectations of fewer rate cuts and a strong US Dollar, presents challenges for Gold as investors may hesitate to make aggressive trades.
GOLD (XAU/USD) - Technical Analysis
Gold's trading session on April 15 saw a modest uptick, with the price closing at $2,346.70, a 0.70% increase from the previous day. The precious metal is hovering near a pivotal juncture at $2,368, serving as the day’s technical fulcrum. Should gold surpass this pivot point, it could encounter resistance at $2,399, with further hurdles at $2,421 and $2,450 potentially capping upward movements.
Conversely, immediate support lies at $2,327, with additional safety nets at $2,303 and $2,268. A breach of these levels could precipitate a more pronounced decline, signaling a potential shift in investor sentiment towards gold. The Relative Strength Index (RSI) stands at 48, indicating a neutral market that could swing in either direction based on external market stimuli.
The 50-day Exponential Moving Average (EMA) at $2,330 lends support slightly below the current price, suggesting a level of underlying market support. Notably, a breakout below the upward channel near $2,367 might trigger a selling trend, prompting a strategic sell below $2,362. Traders might consider taking profit at $2,310 and placing a stop loss at $2,397 to manage risk effectively.
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- EUR/USD Price Analysis – April 15, 2024
EUR/USD Price Analysis – April 15, 2024
Daily Price Outlook
Despite the bullish US dollar and the ECB's consideration of lowering policy rates, the EUR/USD currency pair regained traction and attracted strong bids around the $1.0665 level. However, this movement could be attributed to the upcoming data releases, including seasonally adjusted Eurozone Industrial Production data and US Retail Sales figures on Monday. Conversely, the upticks in the EUR/USD pair could lose some momentum as the US Dollar (USD) strengthened from increased dollar-buying amid geopolitical turmoil, leading to downward pressure on the EUR/USD pair.
On the other hand, the ECB hinted at possible rate cuts due to slowing inflation, contrasting with the Fed's different monetary policy outlook. This divergence in policy direction contributed to the weakening of the euro against the US dollar.
Fed's Easing Plans and USD Strength Impacting EUR/USD Pair
On the US front, the broad-based strength of the US dollar, coupled with solid inflation and economic data, is causing the Fed to reconsider its easing plans. The probability of no rate changes in June has increased to 63.5% from 46.8% last week, according to the CME FedWatch Tool.
Investors are closely monitoring Eurozone Industrial Production and US Retail Sales data on Monday. Boston Fed President Susan Collins anticipates approximately two rate cuts this year, while also expressing hope for lower inflation later on.
Consequently, the higher probability of no rate changes in the US has bolstered the US dollar, exerting downward pressure on the EUR/USD pair as investors anticipate a more stable interest rate environment.
Geopolitical Tensions and Potential USD Fluctuations
On the geopolitical front, Iran responded to a suspected Israeli attack by launching drones and missiles at Israel over the weekend. Despite this, markets remained calm, possibly because Iran had given advance notice of the attack, reducing fears of a major escalation. Officials from Turkey, Jordan, and Iraq confirmed that Iran had warned them days before the attack, aiming to prevent casualties. However, a US official disputed this. President Joe Biden assured Israel that the US would not participate in any retaliatory actions, contributing to stability despite the tense situation.
Therefore, the geopolitical tensions between Iran and Israel, despite Iran's advance warning of its retaliatory actions, could cause temporary fluctuations in the US dollar as investors assess the broader impact on global stability, influencing movements in the EUR/USD pair.
Monetary Policy Divergence and EUR/USD Downward Pressure
On the Euro front, the EUR/USD pair faced downward pressure due to diverging views on monetary policy between the European Central Bank (ECB) and the Federal Reserve (Fed). The ECB hinted at potential rate cuts in June if inflation stays sluggish as forecasted. This difference in policy outlooks led to a weaker euro against the dollar.
Hence, the contrasting monetary policy outlooks between the ECB, considering rate cuts in June, and the Fed could strengthen the US dollar against the euro, potentially exerting downward pressure on the EUR/USD pair.
EUR/USD - Technical Analysis
The EUR/USD pair exhibited modest strength on April 15, marking an uptick of 0.17%, closing at 1.06555. The currency pair is currently testing an important technical threshold, positioned at a pivot point of 1.0630. Surpassing this pivot may prompt a push towards the immediate resistance level at 1.0685, followed by additional ceilings at 1.0726 and 1.0787. These levels will serve as critical markers for potential upward price action in the near term.
Conversely, should the EUR/USD retreat from its current position, it will find initial support at 1.0600. Further declines could see the pair testing subsequent support levels at 1.0571 and 1.0528, which may stabilize declines or mark new lows. Notably, the Relative Strength Index (RSI) at 27 suggests that the pair is currently oversold, which could indicate a forthcoming bullish correction if it sustains above the pivot point.
The 50-day Exponential Moving Average (EMA) stands at 1.08, hinting at a bearish trend overall but offering a distant target for potential bullish momentum. Traders might consider a buying strategy above the pivot point of 1.06329, with an advised take profit at 1.07040 and a stop loss set at 1.05969 to manage risk effectively.
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