AUD/USD Price Analysis – April 02, 2024
Daily Price Outlook
Despite the renewed strength of the US dollar, the AUD/USD currency pair has managed to stop its previous losses and regained some traction around the 0.6499 level. However, this mild bullish performance of the AUD/USD pair can be attributed to several factors, including the strength shown by the Australian economy. Despite global economic challenges, Australia has shown a strong recovery, supported by strong domestic demand and ongoing fiscal stimulus measures. Moreover, rising commodity prices, especially for key exports like iron ore, have bolstered Australia's export earnings and contributed to the positive sentiment surrounding the Australian dollar.
On the other hand, the Reserve Bank of Australia (RBA) is cautiously optimistic and committed to helping the economy with supportive monetary policies. Despite ongoing inflation worries, the RBA's actions have given stability and confidence to investors, boosting the AUD/USD pair's upward movement.
RBA Minutes and Impact on AUD/USD Currency Pair
It is worth noting that the recent RBA meeting minutes showed that the bank is not thinking about raising interest rates and this was not surprising to markets because the RBA is focused on helping the economy recover and managing inflation using other methods. However, the decision to keep rates unchanged had a mixed impact on the AUD/USD pair. Initially, it caused a small drop in the Australian dollar against the US dollar, but overall, the market stayed positive because of the RBA's supportive policies, which helped the AUD/USD pair to regain its traction.
Chinese Yuan's Performance and Its Impact on AUD/USD Currency Pair
On the other side, the Chinese Yuan recently dropped to its lowest level in four-and-a-half months, leading China to take steps to stabilize its currency and boost economic growth. It should be noted that China's National Bureau of Statistics (NBS) reported better manufacturing and non-manufacturing PMI figures, suggesting a potential economic recovery. These improvements in China, along with efforts to support the Yuan, have indirectly helped the Australian dollar due to Australia's close trade relationship with China.
If China's economy keeps improving, it could lead to higher demand for Australian exports, which would benefit the AUD/USD pair.
US ISM Manufacturing PMI and Fed's Stance on Interest Rates
On the US front, the rise of the US ISM Manufacturing PMI to its highest level since September 2022, along with other positive economic data, has strengthened the US dollar and increased expectations for a less dovish stance from the Federal Reserve. Federal Reserve Chairman Jerome Powell's recent comments, expressing contentment with inflation data and suggesting a cautious approach to interest rate adjustments, have contributed to the dollar's strength.
Therefore, the strengthened US dollar, fueled by positive economic data and expectations of a less dovish stance from the Federal Reserve, has put downward pressure on the AUD/USD pair due to the inverse relationship between the two currencies.
AUD/USD - Technical Analysis
The AUD/USD pair on April 2 exhibits slight bearishness, trading at 0.64885, a decrement of 0.01%. The currency pair is currently hovering around a critical pivot point at 0.6498, which may serve as a juncture for potential directional shifts. Resistance levels are established at 0.6515, 0.6539, and 0.6557, marking thresholds where the price may encounter upward pressure. Conversely, support is found at 0.6474, 0.6462, and 0.6443, which could provide a foundation for price stabilization or a rebound.
The technical landscape is shaped by the 50-Day Exponential Moving Average (EMA) at 0.6515 and the Relative Strength Index (RSI) at 37, both of which signal a bearish inclination, corroborated by the prevailing downward trendline and bearish channel observed in the 2-hour timeframe.
In conclusion, the AUD/USD pair presents a bearish outlook below the pivot of 0.6498. Traders may consider a selling strategy below the 0.64979 mark, targeting a profit at 0.64615 while placing a stop loss at 0.65157, paying close attention to the identified technical levels and indicators for any shifts in market dynamics.
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USD/CAD Price Analysis – April 02, 2024
Daily Price Outlook
Despite the bullish crude oil price, the USD/CAD currency pair has maintained its upward trend and remained well bid around the 1.3580 level. However, this bullish performance is driven by several key factors, including reduced bets for a June Fed rate cut, which has boosted the US dollar to multi-week highs. Moreover, the bullish crude oil prices support the CAD, but they have not capped the USD/CAD pair's upward trajectory. Investors and traders will continue to monitor key economic indicators, Fed rate expectations, and oil price dynamics.
US Dollar Strength and Economic Data Influence on USD/CAD Pair
On the US front, the broad-based US dollar gained traction amid reduced expectations for a June Fed rate cut. Investors have scaled back their bets on a potential rate cut by the Federal Reserve following the release of upbeat US economic data. However, the manufacturing sector in the US showed growth in March, marking the first positive growth since September 2022. This positive economic data has supported higher US Treasury bond yields, further bolstering the US Dollar and contributing the USD/CAD pair gains.
Impact of Bullish Crude Oil Prices on USD/CAD Currency Pair
Apart from this, bullish crude oil prices, which typically benefit the Canadian dollar (CAD) due to Canada's status as a major oil exporter, were seen as a key factor that could cap gains in the USD/CAD currency pair. Crude oil prices have remained strong, nearing a five-month high, driven by improved demand and geopolitical tensions in the Middle East. This strength in oil prices has supported the commodity-linked Canadian dollar (CAD), also known as the Loonie.
USD/CAD - Technical Analysis
The USD/CAD currency pair today registers a modest ascent, with its current trading figure at 1.35799, reflecting a gain of 0.07%. This pair is navigating through essential technical thresholds that provide insight into its imminent trajectory. The pivot point is established at $1.3615, delineating the upcoming market direction.
Resistance levels are pinpointed at $1.3614, $1.3641, and $1.3675, delineating potential barriers for upward price movement. Conversely, support figures are set at $1.3539, $1.3515, and $1.3483, pivotal for counteracting any downward price actions. The technical analysis, spearheaded by the Relative Strength Index (RSI) at 62, signifies a bullish inclination, albeit with caution as it edges towards the overbought zone. The 50-Day Exponential Moving Average (EMA) aligns at 1.3563, further affirming the buying trend near the current price levels.
In conclusion, the trading environment for USD/CAD on April 2 leans towards a bullish perspective, influenced by the technical indicators and market conditions. Observing these technical levels and indicators is imperative for traders to make informed decisions, particularly considering the 50 EMA's support and the RSI nearing the overbought territory.
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GBP/USD Price Analysis – April 01, 2024
Daily Price Outlook
Despite the Bank of England (BoE) is expected to reduce interest rates three times by a quarter-point each in 2024, the GBP/USD currency pair maintained its upward trend and remained well-bid above the 1.2530 level. However, the reason for its upward trend can be attributed to several factors including the weakness of the US dollar. The US dollar faced bearish pressure following dovish comments from Federal Reserve Chairman Jerome Powell.
Powell's remarks indicated that recent US inflation data was in line with expectations, supporting the Fed's stance on potential interest rate cuts throughout 2024. This dovish sentiment regarding future rate cuts has undermined the US dollar and contributing the GBP/USD pair gains.
Another factor that has been boosting the GBP/USD pair was the good economic signs in the UK. Despite concerns about the UK economy possibly entering a recession in 2023, recent indicators such as Nationwide Housing Prices, S&P Global PMI, and Halifax House Prices data have shown that the UK economy is holding up well. This positive news has increased investor confidence in the British Pound (GBP), making it stronger against the US Dollar (USD).
In addition to this, market sentiment surrounding Brexit has improved, providing further support to the GBP. The UK and the European Union (EU) have made progress in resolving post-Brexit trade issues, reducing uncertainty for businesses and investors. As a result, the improved market sentiment surrounding Brexit, with progress in post-Brexit trade issues between the UK and EU, has further supported the GBP/USD pair, boosting the value of the British Pound.
Impact of Fed Chairman Jerome Powell's Dovish Comments on GBP/USD Currency Pair
On the US front, the dovish comments from Fed Chairman Jerome Powell had a notable impact on the GBP/USD currency pair. The broad-based US dollar losing its momentum as market participants reacted to Powell's remarks indicating the possibility of interest rate cuts in 2024. The dovish stance taken by the US Federal Reserve weakened the US dollar against major currency pairs, including the GBP/USD. This decline in the dollar's value strengthened the GBP, causing an upward trend in the GBP/USD pair.
Impact of Bank of England's Anticipated Rate Reductions on GBP/USD Currency Pair
Despite the anticipated three rate cuts by the Bank of England in 2024, the GBP/USD pair has shown resilience, largely unaffected by these expectations. This is attributed to other supportive factors bolstering the British pound, thus maintaining its strength against the US dollar. However, the positive performance of key economic indicators and improved sentiment regarding Brexit have helped the GBP/USD currency pair to stay bid.
GBP/USD - Technical Analysis
The GBP/USD pair showed a marginal increase on April 1st, trading at 1.26255, reflecting a 0.07% rise. The currency pair currently hovers near a pivot point of 1.2647, with resistance levels at 1.2690, 1.2745, and 1.2805 suggesting potential hurdles for upward movements. Conversely, the support levels are positioned at 1.2587, 1.2540, and 1.2502, which could provide stabilization in case of a decline.
The technical landscape, as denoted by a Relative Strength Index (RSI) of 47, illustrates a neutral market sentiment, with the 50-day Exponential Moving Average (EMA) at 1.2649 closely aligned with the current trading range, reinforcing the pivotal role of the 1.2647 mark. GBP/USD's trading pattern has been characterized by choppy movements within a narrow band between 1.2645 and 1.2585. A decisive break out of this range is anticipated to set the future course for the pair.
Given the current technical setup and impending economic events, a cautious approach is recommended. A potential trading strategy would be to initiate a sell position below 1.26471, targeting 1.25857, with a stop loss at 1.26828 to mitigate risk.
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- GOLD Price Analysis – April 01, 2024
GOLD Price Analysis – April 01, 2024
Daily Price Outlook
Gold prices (XAU/USD) have maintained an upward trend and hitting an intraday high near the $2,265 level. However, the reason behind this surge is increasing speculation about a Federal Reserve rate cut in June. This sentiment is fueled by the latest US inflation data, particularly the moderate increase in the Personal Consumption Expenditures (PCE) Price Index in February, which rose to 2.5% annually. This reinforces expectations that the Fed may cut interest rates to counter inflationary pressures.
Furthermore, the geopolitical tensions, such as the Russia-Ukraine conflict and conflicts in the Middle East, have increased uncertainties in global markets. During such times, investors often turn to safe-haven assets like gold, boosting demand and pushing prices higher.
Rising Bets for a June Fed Rate Cut and Impact on Gold Price
On the US front, the market is increasingly pricing in the possibility of a June interest rate cut by the Federal Reserve in the US. This sentiment was reinforced by Fed Chair Jerome Powell's remarks on the latest inflation data aligning with the Fed's objectives. According to the CME Group's FedWatch Tool, there's approximately a 70% probability of a rate cut at the June monetary policy meeting.
Therefore, the anticipation of lower interest rates tends to weaken the US Dollar, making gold more attractive to investors as it becomes cheaper to buy.
Risk-On Mood and Modest USD Uptick Impact on Gold Price
Despite the risk-on sentiment in the market, supported by upbeat Chinese manufacturing data and a modest uptick in the US Dollar, gold prices have remained resilient. However, the positive Chinese data, indicating an expansion in the manufacturing sector after six months, initially boosted risk-on market sentiment. In contrast to this, ongoing geopolitical tensions and inflation concerns have overshadowed this optimism, leading investors to seek safe-haven assets like gold.
Hence, the modest uptick in the US Dollar could cap gains for gold, but the risk factors and expectations of a Fed rate cut have outweighed this effect. Investors are watching upcoming economic data like the US ISM Manufacturing PMI for clues about the economy and possible changes in monetary policy.
GOLD (XAU/USD) - Technical Analysis
Gold’s performance on April 1st exhibited a notable rise, closing at $2,258.75, marking a 1.23% increase. This upward trajectory situates gold above the pivotal $2,240, indicating a persistent bullish momentum. Resistance is eyed at $2,285, $2,303, and $2,319; breaching these could foster further gains. Conversely, support positions at $2,249, $2,238, and $2,220 provide potential fallback points.
The technical landscape reveals an RSI at 81, suggesting an overbought market, which could precede a pullback. A notable Doji candlestick below $2,266 might signal a forthcoming market sentiment reversal, potentially initiating a bearish phase. Despite the bullish "three white soldiers" pattern, the market's overbought state hints at a forthcoming correction.
The 50-day EMA at $2,183 solidifies the gold's bullish trend, yet market players should stay vigilant of upcoming economic data and Fed communications, which could significantly sway market directions. The upcoming U.S. ISM Manufacturing PMI and Fed members' speeches will provide insights into economic health and monetary policy, influencing market dynamics.
Given these factors, a cautious trading strategy would be advisable. Considering selling below $2,265, targeting a take-profit at the pivot of $2,240, and setting a stop-loss at $2,285 could align with the current market's technical and fundamental outlook.
In summary, while gold maintains a bullish stance above $2,240, the heightened RSI and specific candlestick patterns suggest a potential near-term correction.
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EUR/USD Price Analysis – April 01, 2024
Daily Price Outlook
The EUR/USD currency pair has been facing a bearish trend and remained well offered around 1.0783 level, mainly due to the strength of the US dollar, which has been bolstered by several factors including the higher-than-expected US Core PCE (Personal Consumption Expenditures) data, showing a 0.3% month-on-month increase and a 2.8% year-on-year rise. These figures met market expectations, indicating a stable and robust economic environment in the United States.
Furthermore, the Federal Reserve's stance of maintaining interest rates at their current levels has provided support to the US dollar. The Fed left interest rates unchanged between 5.25% and 5.5%, with expectations of three quarter-percentage point cuts by the year's end. This confidence in the US economy and monetary policy has contributed to the US dollar's strength and kept the EUR/USD pair under pressure.
Renewed US Dollar (USD) Strength and Its Impact on EUR/USD Pair
On the US front, the renewed strength of the US dollar has played a major role in underpinning the EUR/USD currency pair. The US Dollar Index (DXY), which measures the dollar's value against a basket of major currencies, has been trading higher, currently around 104.52. The Federal Reserve's "higher-for-longer" stance has supported the US dollar, as it indicates a steady monetary policy that investors find attractive.
Traders are currently pricing in around a 55% probability of a first Fed rate cut in June, down from nearly 70% in previous weeks. This shift in market sentiment towards the US dollar has further contributed to the bearish performance of the EUR/USD pair.
European Central Bank (ECB) and Yannis Stournaras' Impact on EUR/USD Pair
On the Euro front, the European Central Bank (ECB) Governing Council member Yannis Stournaras recently commented on the possibility of four interest rate cuts in 2024, totaling a 100-basis-point reduction by year-end. This dovish outlook from the ECB has also weighed on the Euro, adding to the bearish sentiment surrounding the EUR/USD pair.
Stournaras' comments, along with other ECB officials talking about lowering interest rates have made people unsure and caused the Euro to drop in value. Market participants are closely monitoring developments in European economic data, including the German Consumer Price Index (CPI) and other indicators, to gauge the ECB's future policy actions and their impact on the EUR/USD pair.
EUR/USD - Technical Analysis
The EUR/USD pair experienced a slight decline on April 1st, with the price settling at 1.07905, marking a 0.06% decrease. The trading dynamics positioned the pair around a critical pivot point of 1.0804, with immediate resistance levels at 1.0840, 1.0866, and 1.0894, hinting at potential upward challenges. Support levels are distinctly placed at 1.0765, 1.0733, and 1.0695, which could provide a cushion for the pair in case of downward movement.
The technical analysis reveals a Relative Strength Index (RSI) of 42, indicating a neutral to slightly bearish market sentiment. An upward trendline breakout at the 1.0804 level could potentially initiate a selling trend, as the market responds to upcoming economic indicators and Federal Reserve communications. The 50-day Exponential Moving Average (EMA) at 1.0831 reinforces the significance of the 1.0804 pivot point, suggesting a cautious trading environment.
Given the current market conditions, a prudent trading approach would be to consider selling below 1.07904, aiming for a take-profit level at 1.07368, while setting a stop-loss at 1.08254.
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S&P500 (SPX) Price Analysis – March 29, 2024
Daily Price Outlook
The S&P 500 index maintained its upward rally and was still flashing green on Friday. This can be witnessed as the Dow Jones rose slightly to a new record, while the S&P 500 also hit a new high. The Dow and S&P 500 marked their best two-quarter performance since 2020, with gains of 18.8% and 22.5%, respectively, according to Dow Jones Market Data. However, the market's positive momentum was mainly driven by the prospect of interest rate cuts from the US Fed as a higher chance of a rate cut typically boosts the S&P 500 index.
Federal Reserve's Interest Rate Outlook and its Impact on the S&P 500 Index
On the US front, the Federal Reserve suggested they might lower interest rates three times in 2024, according to Chairman Jerome Powell. This news boosted the S&P 500 index as investors felt more confident in economic support. Investors are expecting three rate cuts from the Fed this year, as the central bank has kept its benchmark borrowing rate steady at 5.25%-5.50% for the fifth consecutive time. However, the central bank still predicts three quarter-point cuts by year-end. Traders are currently estimating a 63% chance of a rate cut in June.
However, the higher chance of a rate cut typically boosts the S&P 500 (SPX) index. as lowering interest rates can stimulate economic activity by making borrowing cheaper for businesses and consumers, which often leads to increased spending and investment. This optimism about future economic growth tends to lift stock prices, including those of companies listed in the S&P 500 index. So, a higher chance of a rate cut is generally seen as positive for the SPX.
In contrast to this, hawkish Fed comments and robust US economic data could cap gains in the SPX. On the data front, the US Gross Domestic Product for the fourth quarter of 2023 showed a surprising uptick, expanding by 3.4% annually, surpassing market expectations of a 3.2% increase. The GDP Price Index remained stable at a 1.7% rise, as predicted. However, Core Personal Consumption Expenditures slightly missed expectations, coming in at 2.0% quarter-on-quarter. Additionally, Initial Jobless Claims dropped to 210K, defying forecasts of a slight increase from the previous week's 212K.
Geopolitical Tensions in Israel and Impact on Global Markets
On the geopolitical front, the conflict between Israel and Gaza escalated with Israel's Prime Minister considering a ground invasion to secure the release of soldiers. Meanwhile, the International Court of Justice accused Israel of genocide in its military campaign in Gaza, demanding immediate aid provision. As of the latest report, the death toll includes over 32,000 Palestinians killed and 75,000 wounded, while there have been 1,139 Israeli casualties from Hamas attacks.
Therefore, the geopolitical tensions in Israel could introduce uncertainty into global markets, impacting the SPX index. Investors may react cautiously to the escalating conflict, which could lead to increased market volatility and downward pressure on the SPX.
S&P 500 - Technical Analysis
On March 29, the S&P 500 (SPX) posted a modest increase, closing at 5254.34, up by 0.11%. This slight uptick reflects a cautious optimism in the market, with the index hovering around key technical levels. The current pivot point is set at 5232.00, with immediate resistance observed at 5281.33, followed by higher thresholds at 5297.10 and 5316.01. These levels suggest potential ceilings where the index might face selling pressure.
Conversely, support is established at 5231.74, with subsequent levels at 5212.87 and 5198.29, which could provide buying opportunities if declines occur. The Relative Strength Index (RSI) stands at 64, indicating a somewhat overbought condition but not excessively so, suggesting that there is still room for upward movement. The 50-day Exponential Moving Average (EMA) at 5152.02 supports a bullish undertone, reinforcing the index’s resilience above this moving average.
Given these factors, the technical outlook for the S&P 500 is cautiously optimistic. A trading strategy could involve selling below 5265, with a take profit target at 5232 and a stop loss at 5280.
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EUR/USD Price Analysis – March 29, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair has been experiencing a downward trend for the fourth consecutive day and remained well-offered around the 1.0775 level. However, this decline can be attributed to several factors, including the bullish US Dollar, which has strengthened, nearing 104.60, driven by hawkish statements from a Federal Reserve (Fed) official. Fed Governor Christopher Waller hinted at a potential delay in interest rate cuts, buoyed by strong inflation figures.
Moreover, recent robust economic indicators from the United States, including a better-than-expected expansion of 3.4% in the US Gross Domestic Product (GDP) annualized for the fourth quarter of 2023, have further bolstered the US dollar position.
Impact of Hawkish Sentiment Surrounding the US Fed:
On the US front, the hawkish sentiment surrounding the US Federal Reserve has underpinned the US dollar and has exerted further pressure on the EUR/USD pair. Waller's comments, suggesting a potential delay in interest rate cuts due to stronger inflation figures, have instilled confidence in the US dollar, leading to its appreciation against the euro.
Investors are awaiting the US Personal Consumption Expenditures (PCE) report, which serves as the Fed’s preferred inflation gauge, to gain further clarity on the monetary policy trajectory. This anticipation has fueled market expectations of higher interest rates in the US, boosting the dollar and contributing the losses in the EUR/USD pair.
Impact of Dovish Remarks from ECB Policymaker Francois Villeroy:
On the Euro front, the dovish remarks from European Central Bank (ECB) policymaker Francois Villeroy have put further downward pressure on the EUR/USD pair. Villeroy said core inflation dropped fast but is still high. He thinks the ECB can reach its 2% inflation goal but warns of risks if they don't cut rates. Moreover, Fabio Panetta from the ECB is worried that strict rules are making people spend less, which is making inflation drop fast.
These dovish remarks have underscored market expectations of potential monetary easing by the ECB, contrasting with the hawkish stance of the Fed, further weighing on the euro and contributing to the bearish performance of the EUR/USD pair.
EUR/USD - Technical Analysis
On March 29, the EUR/USD pair saw a slight decline, closing at 1.07752, down by 0.10%. This movement places the currency pair just below the pivotal mark of 1.08037, signaling potential shifts in market dynamics. Immediate resistance levels are identified at 1.08396, 1.08656, and 1.08937, indicating upper boundaries that may cap upward trends. On the downside, support is found at 1.07647, with further cushions at 1.07334 and 1.06948, suggesting areas where buying pressure could intensify.
The technical indicators portray a more nuanced picture. With an RSI of 32, the EUR/USD is nearing oversold territory, hinting at a potential rebound or stabilization. However, the 50-day Exponential Moving Average (EMA) at 1.08389 stands above the current price, reflecting a bearish sentiment over the medium term.
Considering these technical parameters, the outlook for EUR/USD seems tilted towards bearishness in the short term. Traders might consider selling below 1.07904, with a take-profit target set at 1.07368 and a stop-loss at 1.08254.
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- GOLD Price Analysis – March 29, 2024
GOLD Price Analysis – March 29, 2024
Daily Price Outlook
Gold price (XAU/USD) has been able to break its sluggish trading range and hit record highs above the $2,230 level. However, the upticks in gold prices were mainly driven by the sluggish performance of the US dollar and the prospect of interest rate cuts from the US Fed. Furthermore, ongoing geopolitical tensions were seen as another key factor that boosted the safe-haven gold price. Israeli forces besieged two Gaza hospitals, trapping medical teams amid gunfire. This heightens tension, prompting individuals to turn to safe investments like gold.
In contrast to this, hawkish Fed comments and robust US economic data could cap gains in the gold price as the hawkish Federal Reserve comments signal potential interest rate hikes, which could strengthen the US dollar and reduce the appeal of non-yielding assets like gold. Additionally, robust US economic data suggests less need for safe-haven assets, further suppressing gold prices.
Impact of Federal Reserve Policy and Economic Data on Gold Prices and US Dollar
On the US front, the possibility of interest rate cuts by the Federal Reserve has been weighing down the US dollar, which in turn is boosting gains in gold. Investors are expecting three rate cuts from the Fed this year, as the central bank has kept its benchmark borrowing rate steady at 5.25%-5.50% for the fifth consecutive time. However, the central bank still predicts three quarter-point cuts by year-end. Traders are currently estimating a 63% chance of a rate cut in June.
Thus, the anticipation of interest rate cuts is driving down the US dollar's value, making gold more attractive to investors. This trend is contributing to the upward movement in gold prices.
In contrast to this, if investors believe the Federal Reserve won't reduce interest rates as anticipated, it could strengthen the US dollar, which might slow down the increase in gold prices. However, the positive US economic data also supports this view, reducing the likelihood of rate cuts and further reinforcing the US dollar's strength.
Moving ahead, traders seem cautious to take any strong position as markets are closed for Good Friday, but attention will be on the US February Personal Consumption Expenditures Price Index (PCE) data. The Core PCE, which is the Federal Reserve's preferred measure of inflation, is expected to reveal a 0.3% rise in February.
Geopolitical Risks in the Middle East and Their Impact on Gold Prices
Another factor that has been boosting the safe-haven gold price was the ongoing geopolitical risk in the Middle East. This means that tensions and conflicts in that region, like the recent siege of Gaza hospitals by Israeli forces, can make investors nervous about the stability of other investments. Investors turn to safe-haven assets like gold, which tend to hold their value or even increase during uncertain times.
GOLD (XAU/USD) - Technical Analysis
On March 29, Gold (XAU/USD) experienced a notable increase, reaching $2233.12, a 1.74% gain, reflecting a robust bullish momentum in the market. The asset's movement has surpassed the pivot point at $2221.05, indicating potential for further upward trends. Key resistance levels are identified at $2243.71, $2259.74, and $2277.41, which could act as targets for continued bullish runs. Conversely, support levels are established at $2202.92, $2184.86, and $2165.23, providing potential fallback points should the market retract.
The technical indicators fortify the bullish outlook; the Relative Strength Index (RSI) at 76 suggests an overbought condition, signaling strong buying interest. Meanwhile, the 50-day Exponential Moving Average (EMA) at $2177.63 underscores a significant upward trend over the medium term, further corroborating the bullish sentiment in the market.
Considering these factors, the technical outlook for Gold suggests a strategic entry price for buying above $2225, with a take profit target at $2245, and a stop loss set at $2210 to manage risk.
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AUD/USD Price Analysis – March 28, 2024
Daily Price Outlook
During the early European session, the AUD/USD currency pair experienced a downward trend and remained well offered around the 0.6500 level. However, the reason for its downward trend can be attributed to various factors, including downbeat Consumer Inflation Expectations and Retail Sales figures from Australia, which raised concerns about the country's economic outlook and the potential for interest rate cuts by the Reserve Bank of Australia. Furthermore, the cautious sentiments from members of the Federal Reserve regarding the timing of rate cuts contributed to the pressure on the Australian dollar against the US Dollar.
In addition to this, the risk-off market sentiment triggered by ongoing conflicts such as the Russia-Ukraine war and tensions in the Middle East, particularly between Israel and Palestine, was seen as another key factor that undermined the riskier asset Australian dollar and kept the AUD/USD currency pair down.
Softer Consumer Inflation Expectations and Retail Sales Figures
As mentioned, the AUD/USD currency pair has been declining amid expectations that the Reserve Bank of Australia might lower interest rates in 2024. This view was reinforced by weaker Consumer Inflation Expectations and Retail Sales in Australia. Moreover, the Australian Monthly Consumer Price Index for February fell short of expectations, sparking concerns about Australia's economy. These worries have contributed to pushing the AUD/USD pair lower.
On the data front, Australia's consumer expectations for future inflation dropped slightly to 4.3% in March, down from the previous 4.5% rise. In the meantime, February's Retail Sales increased by 0.3% from the previous month, but it fell short of the expected 0.4% and the earlier 1.1% jump. Plus, Australia's Monthly Consumer Price Index for February showed a 3.4% year-on-year increase, just below the anticipated 3.5%. Meanwhile, Westpac Consumer Confidence decreased to 84.4 in March from February's 86.0, after hitting a 20-month high.
On the positive side, the Westpac Leading Index rose by 0.1% in February. The government aims to raise the minimum wage in line with inflation this year to help low-income families cope with rising living costs. Therefore, the AUD/USD pair faced downward pressure as Australia's softer consumer inflation expectations, lower-than-expected retail sales, and slightly below-anticipated CPI figures heightened concerns about the country's economic outlook.
Federal Reserve's Cautious Stance on Interest Rates
On the US front, Federal Reserve Board Governor Christopher Waller's hawkish stance on interest rates also affected the performance of the AUD/USD currency pair by underpinning the US dollar. Despite sticky inflation data, Waller expressed a no-rush approach to cutting rates. This cautious stance suggested that the Federal Reserve might not be quick to implement monetary policy easing measures, which could support the US Dollar and contributes to the declines in the AUD/USD pair.
Moreover, Some Federal Reserve members, like Bostic and Cook, said cutting rates too soon could make inflation worse. Goolsbee, from Chicago Fed, leaned toward cutting rates but wants to see proof that inflation is getting better first.
Therefore, the AUD/USD pair faced pressure as Federal Reserve officials, including Christopher Waller, signaled a cautious approach to rate cuts despite inflation concerns, bolstering the US Dollar against the Australian Dollar.
AUD/USD - Technical Analysis
The AUD/USD pair has experienced a slight decrease, down by 0.12%, with its price settling at 0.6528. Amidst fluctuating market conditions, the Australian dollar struggles to maintain its foothold against the US dollar, as investors remain cautious ahead of potential shifts in monetary policy and economic indicators. The pivot point at 0.6541 signifies a critical juncture for AUD/USD, where its future trajectory could be decided. Resistance levels at 0.6572, 0.6598, and 0.6630 present hurdles for any bullish momentum, while support levels at 0.6504, 0.6478, and 0.6448 offer a cushion against further declines.
Technical indicators suggest a challenging environment for AUD/USD. The 50-day Exponential Moving Average (EMA) at 0.6543, just above the current price, acts as a barrier to upward movement. Furthermore, the Relative Strength Index (RSI) standing at 46, below the midpoint of 50, indicates a bearish sentiment within the market. This confluence of technical signals hints at potential weakness, suggesting that the pair might face downward pressure in the short term.
Considering these factors, the outlook for AUD/USD appears tilted towards bearishness below the pivot point of 0.6541. Traders might consider a sell strategy below the specified entry price of 0.65409, targeting a pullback to 0.65044 while setting a stop loss at 0.65611 to mitigate risk.
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USD/JPY Price Analysis – March 28, 2024
Daily Price Outlook
The USD/JPY currency pair maintained it upward trend and remained well bid around 151.50 level. However, the reason for its upward trend can be attributed to the hawkish stance of the Federal Reserve, particularly highlighted by comments made by Fed Governor Christopher Waller. Waller's remarks indicated a less dovish outlook on monetary policy, citing higher-than-expected inflation readings and the resilience of the US economy. This has led to increased expectations of a more aggressive stance on interest rates, which typically strengthens the US dollar and supports the USD/JPY pair.
Furthermore, the upcoming US macroeconomic data, including the final Q4 GDP print and the Weekly Initial Jobless Claims, are being closely monitored by traders for any signs of economic strength or weakness.
BoJ’s Dovish Outlook and Its Impact on USD/JPY Currency Pair:
Conversely, the Bank of Japan's dovish outlook has exerted downward pressure on the Japanese yen and contributed to the strength of the USD/JPY currency pair. Japanese monetary officials have expressed a cautious approach to monetary policy, signaling their readiness to maintain accommodative financial conditions for an extended period.
Therefore, the dovish stance of the Bank of Japan contrasts with the hawkish sentiment of the Federal Reserve, widening the interest rate differential between the US dollar and the Japanese yen. Furthermore, Japanese authorities have hinted at potential interventions to address disorderly movements in the currency market, which may further weaken the Japanese yen relative to the US dollar.
Impact of Federal Reserve's Stance on AUD/USD Pair
On the US front, Federal Reserve Board Governor Christopher Waller's stance favoring higher interest rates boosted the US dollar and impacted the AUD/USD pair. Despite steady inflation, Waller signaled a reluctance to lower rates hastily. This cautious approach hinted that the Fed might delay easing monetary policy, supporting the US dollar and causing the AUD/USD pair to fall.
Additionally, other Fed members like Bostic and Cook warned that cutting rates too soon could worsen inflation, while Goolsbee from the Chicago Fed leaned towards rate cuts but wanted proof of improving inflation first.
Therefore, the AUD/USD pair weakened as Federal Reserve officials, including Waller, signaled reluctance to lower rates promptly, boosting the US dollar amid concerns about inflation and delaying monetary easing.
USD/JPY - Technical Analysis
In the latest trading session, the USD/JPY pair inched slightly upwards by 0.03%, positioning itself at 151.354. This subtle movement underscores a cautious optimism among traders, hinting at potential bullish momentum for the pair. With the pivot point firmly established at 151.02, USD/JPY finds itself at a crossroads, where any shift above this level could pave the way for a further ascent.
Immediate resistance markers are set at 151.97, 152.59, and 153.17, delineating clear targets for bullish traders. Conversely, support levels at 150.30, 149.74, and 148.95 offer a safety net, should the pair experience a downturn. The alignment of the 50-day Exponential Moving Average (EMA) at 151.03 with the pivot point reinforces the bullish outlook, serving as a testament to the underlying buying pressure.
Moreover, the Relative Strength Index (RSI) hovering around 52 suggests a neutral to slightly bullish sentiment, providing additional confirmation of the potential for upward movement. This combination of technical indicators points towards a favorable environment for buyers, especially if the pair successfully breaches the pivot point.
In summary, the technical landscape for USD/JPY appears bullish above the pivotal 151.02 mark. Traders might consider entering a long position above this threshold, targeting a rise towards 152.283, while employing a stop loss at 150.423 to mitigate potential risks.