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EUR/USD Hits Highest Level In A Year After U.S. Data The EUR/USD has managed to maintain its upward momentum, holding above the critical psychological level of 1.1000. The euro rose for a third straight day on Thursday amid reports suggesting that the European Central Bank (ECB) policymakers are in agreement regarding a potential 25 basis point rate hike in May. Meanwhile, the U.S. dollar continued to weaken following lower-than-expected wholesale inflation numbers. At the time of writing, the EUR/USD pair is trading at 1.1045, 0.5% above its opening price, after hitting its highest level in a year at 1.1067. On Thursday, the U.S. reported Producer Price Index (PPI) and jobless claims data. The annual wholesale inflation, measured by the PPI, came in at 2.7% in March, below expectations of 3%, while the core rate was 3.4% in the same period, in line with consensus. In addition, initial jobless claims data for the week that ended April 8 rose to 239,000 versus the 232,000 expected. The greenback fell across the board as softer inflation and job numbers have fueled expectations the Federal Reserve will hike one more time and then take a pause. According to the WIRP tool, investors are betting on probabilities of 67% of a 25 bps hike in May that would take the Fed funds range to 5.00%-5.25%. In addition, markets are now discounting higher probabilities of the FOMC cutting rates by the year-end. From a technical perspective, the EUR/USD maintains a short-term bullish outlook as per indicators on the daily chart. The RSI and MACD are both in positive territory, not yet tagging overbought levels, while the price remains above its main moving averages, suggesting the buyers have the upper hand. On the upside, a break above 1.1070 would pave the way for more gains, targeting the 1.1100 area and the critical 200-week SMA at 1.1199. A break above this level would improve the longer-term perspective. On the downside, the 1.1000 level stands as the immediate support level, followed by the 1.0950 and 1.0900 areas.
by Alex_Boltyan_FXAnalyst
Gold Reclaims $2,000 Ahead of U.S. Inflation Data Gold prices resumed the advance on Tuesday after a limited downward correction prompted by the dollar's spike that followed the encouraging nonfarm payrolls report. At the time of writing, the spot price XAU/USD is trading at HKEX:2 ,005 an ounce, up 0.71% on the day. At the same time, the Dollar Index DXY is trading at 0.3% below its opening price at 102.25. The greenback has weakened across the board despite higher U.S. Treasury yields. The 10-year note rate is at 3.45%, accumulating three days of gains amid speculation the Federal Reserve might raise rates by 25 bps once again in May, taking the Fed funds range to 5%-5.25% before pausing its tightening cycle. On Friday, an in-line-with-expectations employment report fueled expectations of a 25 bps hike. On Wednesday, the U.S. will publish March consumer price index (CPI) data, which will be closely scrutinized by investors, especially after Federal Reserve Bank of New York President John Williams said on Tuesday that they need to stay in "data-dependent mode," and added that if inflation comes down, they will have to lower interest rates. From a technical perspective, the XAU/USD pair holds a positive short-term outlook. However, the daily chart exhibits dwindling bullish momentum following the HKEX:2 ,030 - HKEX:1 ,980 downward correction over the last few days. A break above last week's high of HKEX:2 ,032 could pave the way to a retest of records highs in the HKEX:2 ,070 area. On the other hand, the HKEX:1 ,970 zone stands as critical short-term support, containing the 78.6% retracement of the HKEX:2 ,070 - HKEX:1 ,615 downtrend and the 20-day simple moving average.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Falls Towards 1.0850 As U.S. Dollar Gains Momentum The EUR/USD pair is retreating for a second day on Monday, sliding to the 1.0850 area after hovering around 1.0900 for a period of consolidation. The absence of any significant high-tier data releases has also contributed to the pair's struggles, resulting in an increase in demand for the U.S. dollar. At the time of writing, the EUR/USD pair is trading at 1.0860, down 0.34% on the day, while the DXY Index is currently at the 102.60 area, 0.5% above its opening price. No relevant economic data will be released on Monday as most European markets remain closed due to the Easter Monday holiday, and investors remain cautious ahead of Wednesday's U.S. inflation data. The Consumer Price Index (CPI) inflation rate is expected to decrease to 5.2% from its previous reading of 6%, while the core rate is seen accelerating slightly to 5.6%. In the meantime, U.S. bond yields treading water after Friday's jump, with the 10-year yield currently trading at 3.39%. On Friday, the nonfarm payrolls report showed the U.S. economy added 236,000 new positions in March, in line with expectations of 240,000, while the unemployment rate edged lower to 3.5%. Ahead of CPI figures, investors are betting on higher odds of a 25 bps hike by the Fed in May. Hot inflation readings on Wednesday would strengthen the case for the hike, favoring the U.S. dollar. From a technical standpoint, the EUR/USD holds a short-term bullish outlook according to indicators on the daily chart as the RSI and MACD are both in positive territory, although losing momentum. At the same time, the price hovers above its main moving averages, with the 20-day SMA offering immediate support at the 1.0810 zone. On the upside, the following resistance levels are seen at the 1.0900 level and last week's highs at the 1.0970 area ahead of February's high of 1.1032. On the flip side, loss of the 1.0810-00 zone would expose the 100-day SMA at 1.0685.
by Alex_Boltyan_FXAnalyst
EUR/USD Hovers Above 1.0900 As Investors Await Crucial NFPThe EUR/USD pair entered a consolidative phase on Thursday amid thin trading conditions while investors wait for the U.S. nonfarm payrolls report. At the time of writing, the EUR/USD pair is trading at the 1.0925 area, 0.23% above its opening price. Most global markets will remain closed on Friday in observance of Good Friday. In the U.S., the stock market will remain closed, but the bond market will open for a shortened session. Still, the U.S. Bureau of Labor Statistics will release the March nonfarm payrolls data. The NFP report is expected to show the economy created 240,000 new jobs in March, following a 311,000 gain in February. At the same time, the unemployment rate is seen steady at 3.6%. Data released earlier this week (JOLTS, ADP) began to point to a loosening labor market. On Thursday, data showed the weekly initial jobless claims were 228,000 in the week ended March 31, above the 200,000 expected, adding evidence the job market is facing some pain. The official government report will have the last word and could fuel expectations the Fed will remain on hold at the May meeting. From a technical perspective, the EUR/USD pair maintains a bullish short-term outlook, according to indicators on the daily chart, with the RSI and the MACD turning flat above their midlines. However, the bullish momentum has faded as investors take the sidelines. On the upside, the critical short-term barrier is given by recent highs at the 1.0970 area, followed by the 1.1000 psychological level and February’s high of 1.1032. On the flip side, the immediate support is seen at the key 1.0900 area and then the 1.0790-1.0800 zone, where the 20-day SMA reinforces the psychological level.
by Alex_Boltyan_FXAnalyst
EUR/USD Trims Weekly Gains, Eyes NFP DataThe EUR/USD pair has retreated from highs and trimmed weekly gains as investors booked profits ahead of the long Easter weekend. Additionally, soft U.S. data triggered risk aversion, helping the dollar as markets brace for the nonfarm payrolls report on Friday. At the time of writing, the EUR/USD pair is trading around 1.0900, down 0.49% on the day after peaking at the 1.0970 zone. The ADP reported on Wednesday the U.S. private sector added 145,000 job positions in March, below the 200,000 expected. In addition, the ISM Services PMI came in at 51.2 in March, below the consensus of 54.5. On Friday, the U.S. Bureau of Labor Statistics will report the nonfarm payrolls, which are expected to show the economy created 240,000 new jobs in March after February’s 311,000 increase. U.S. bonds rallied on Wednesday, pushing Treasury yields to multi-month lows, with the 10-year yield hitting 3.27%, its lowest level since September. Wall Street stock indexes were mixed, with the Dow Jones holding on to mild gains, while the S&P 500 and the Nasdaq Composite traded in the red. From a technical perspective, the EUR/USD pair retains a bullish bias on the daily chart, but indicators point to dwindling momentum. On the upside, the pair needs to break above the 1.0970 resistance area to pave the way to the 1.1000 zone and potentially to February’s high of 1.1032. On the other hand, immediate support levels could be found at 1.0850 and the 1.0800 psychological mark ahead of the 20-day SMA at the 1.0770 zone.
by Alex_Boltyan_FXAnalyst
Gold Extends Gains Above $2,000, Looks To Test Record Highs Gold prices advanced sharply on Tuesday and extended gains into a third consecutive day on Wednesday, with the spot XAU/USD price approaching the $2,030 area after the U.S. reported another round of softer-than-expected employment figures ahead of the critical nonfarm payrolls report on Friday. At the time of writing, the spot price XAU/USD is trading at $2,029, up 0.4% on the day and accumulating a 3% gain this week. The ADP reported on Wednesday the U.S. private sector added 145,000 job positions in March, below the 200,000 expected. On Friday, the U.S. Bureau of Labor Statistics will report the nonfarm payrolls, which are expected to show the economy created 240,000 new jobs in March after February’s 311,000 increase. Investors will follow the data closely as the Federal Reserve has reiterated they will remain data-dependent regarding following monetary policy decisions. Still, according to the CME FedWatch Tool, the chances of a no-hike are around 57% against a 43% of probability of another 25 bps increase. Against this backdrop, the U.S. Dollar has been retreating alongside Treasury yields, favoring the XAU/USD advance. From a technical perspective, the XAU/USD maintains a strongly bullish outlook according to indicators on the daily chart, which are in positive territory, not yet giving signs of exhaustion. At the same price, the price hovers well above its main moving averages and moving closer to record highs struck in 2020 and 2022 at the $2,070-$2,075 region. A break above this area would put the yellow metal in uncharted territory, with the projection of Fibonacci placing the next bullish target at the $2,195 zone. On the other hand, supports could be found at former resistance levels at $2,000 and $1,970 ahead of the 20-day SMA at $1,953.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Maintains Positive Bias But Struggles Around 1.0900The EUR/USD pair continues to oscillate near the 1.0900 level on Monday, briefly rising above the psychological level to hit a high of 1.0916. Still, caution among investors and a challenging technical resistance level are preventing the euro from extending gains. At the time of writing, the EUR/USD pair is trading above its opening price at 1.0885, up 0.38% on the day. At the same time, the DXY Index slipped to the 102.15 area, recording a 0.4% decline on Monday. The U.S. dollar remains on the defensive across the board on the back of expectations that the Federal Reserve might be close to ending its tightening cycle. On Monday, data showing the U.S. manufacturing sector continued to contract in March fueled those prospects. US S&P Global and ISM Manufacturing PMI came in weaker than expected in March. The S&P PMI came in at 49.2 versus the 49.3 expected, while the ISM gauge fell deeper into contraction territory to a two-year low of 46.3 against the 47.5 expected. Meanwhile, the German and Eurozone S&P Global Manufacturing PMIs came in better than expected in March but remained in contraction territory, at 44.7 and 47.3, respectively. In a surprise move on Sunday, the OPEC+ oil producers announced further oil output cuts of around 1.16 million barrels per day. Against this backdrop, U.S. bond yields retreated, with the 10-year yield at 3.42%, while Wall Street indexes traded mixed. The Dow Jones is up 0.7%, the S&P 500 is flat, and the Nasdaq Composite is down 0.9%. From a technical perspective, the EUR/USD holds a positive short-term bias according to indicators on the daily chart, which are turning flat but in positive ground. On the upside, the pair needs to regain the 1.0900 area – 50% retracement of the May 2021 – September 2022 downfall – to pave the way for a steeper climb, targeting February’s highs at 1.1030. On the other hand, the inability to reclaim 1.0900 might pose a threat to the medium-term outlook. The immediate support levels are seen at 1.0790, and then the 20-day SMA at 1.0735.
by Alex_Boltyan_FXAnalyst
EUR/USD Posts Monthly Gain But Holds Below Critical 1.0900The EUR/USD pair is closing March with a monthly gain following February’s decline, although the euro has been unable to hold above the 1.0900 critical level. On the last trading day of the month, the pair pulled back and trimmed half of its weekly advance after inflation data was published on both sides of the Atlantic. At the time of writing, EUR/USD is trading at the 1.0835 area, 0.61% below its opening price. Still, the pair posts weekly, monthly and quarterly gains of 0.74%, 2.52% and 1.31%, respectively. Earlier in the session, the Eurozone reported consumer inflation data. The annual inflation rate, measured by the Harmonized Index of Consumer Prices (HICP), came in at 6.9% in March, below the consensus forecast of 7.1% and slowing from its previous figure of 8.5%. However, the core rate increased to 5.7% from 5.6% the previous month. Across the pond, the U.S. Core Consumption Expenditures (PCE) Price Index – the Federal Reserve’s preferred inflation gauge – rose by 4.6% over the year to March, slightly below the forecast of 4.7%. After the Q4 2022 Gross Domestic Product (GDP) growth was downwardly revised to 2.6% and the core PCE rate eased, the Fed may have more evidence that inflation is slowing down and economic activity is seeing some below-trend growth, which might boost expectations of a less aggressive Fed. From a technical perspective, the EUR/USD maintains a short-term bullish bias according to indicators on the daily chart. From a wider perspective, the outlook is tilted to the upside on the weekly chart, although the bullish case is not that strong. The EUR/USD pair needs to break above the 1.0900 level decisively, the 61.8% retracement of the May 2021 – September 2022 downfall, to improve the medium-term perspective, targeting February’s highs at the 1.1030 zone. On the other hand, the critical support area is given by the 20-week SMA at the 1.0650 area. Loss of this level would deteriorate the euro’s perspective, exposing the 1.0500 zone.
by Alex_Boltyan_FXAnalyst
EUR/USD Climbs Above 1.0900 As Dollar Remains On The DefensiveThe EUR/USD pair has continued to advance on Thursday, surpassing the 1.0900 mark, as the dollar remains on the defensive, with investors' focus turning to Friday's Eurozone inflation data and U.S. core personal consumption expenditures (PCE) price index – the Federal Reserve's preferred gauge of inflation. At the time of writing, the EUR/USD pair is trading at 1.0905, 0.56% above its opening price, having printed a one-week high of 1.0926. Meanwhile, the DXY Index dropped to 102.15, recording a 0.46% decline on the day. Germany reported March inflation figures which showed the Harmonized Index of Consumer Prices rising by 7.8% YoY, above the consensus of 7.5% but down from February's 9.3%. German bond yields advanced as a reaction, with the 10-year yield rising to 2.38%. Across the pond, the U.S. reported the final estimation of the Q4 2022 GDP figures, which showed economic growth was downwardly revised to 2.6% from 2.7% previously estimated. Other data showed that initial jobless claims for the week that ended on March 24 rose to 198,000 from 191,000 the previous week. Despite data coming on the soft side, Wall Street indexes advanced on Thursday. The S&P 500 gained 0.57%, the Dow Jones Industrial Average climbed 0.43%, and the Nasdaq Composite rose 0.73%. Investors now focus on inflation numbers on both sides of the Atlantic. The Eurozone Core Harmonized Index of Consumer Prices is expected to grow 6.7% YoY in March, while the U.S. Core PCE Price Index is seen up 4.7% over the 12 months to February. From a technical perspective, the EUR/USD maintains a short-term positive outlook as per indicators on the daily chart. The RSI and MACD point upwards, suggesting that the bulls remain in control while the pair holds above its main moving averages and the critical 1.0900 level. On the upside, the following resistance levels line up at t 1.0950 and the 1.1000 psychological mark ahead of 1.1032 (February high). On the downside, the 1.0900 now stands as the immediate support level, followed by the 1.0820 level and the 1.0800 zone.
by Alex_Boltyan_FXAnalyst
Gold Hovers Below $2,000 Ahead of Inflation FiguresGold prices retreated slightly on Wednesday, with some caution prevailing among investors ahead of important data releases from the U.S. and Eurozone related to inflation. At the time of writing, the spot price XAU/USD is trading at the $1,965 area, down 0.48% on the day. While banking fears continue to recede and financial markets remain optimistic, there is a lack of fresh catalysts to motivate directional moves. The macroeconomic calendar has been sparse for three consecutive days leaving room for some dollar appreciation. However, global stock markets have posted substantial gains, with U.S. indexes closing in the green. The macroeconomic calendar is expected to become active on Thursday, with Germany and Spain set to publish the preliminary estimate of their March Harmonized Index of Consumer Prices (HICP) ahead of the Eurozone figure, which will be released on Friday. Additionally, the United States will unveil the final estimate of the Q4 Gross Domestic Product (GDP) on Thursday, expected to confirm an annualized growth of 2.7%. On Friday, the U.S. will release the February Core Personal Consumption Expenditures Price Index, which is the Federal Reserve's preferred inflation measure and is predicted to increase by 4.7% over the previous 12 months. From a technical perspective, the XAU/USD pair is consolidating near recent highs, with indicators losing momentum on the daily chart but maintaining the bias tilted to the upside. The yellow metal needs a clear break above the $2,010 zone to target March 2022 highs at the $2,070 region. On the other hand, losing the $1,930 support area would expose the 20-day SMA at $1,910. A break below the latter would deteriorate the metal's technical outlook.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
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EUR/USD Extends Weekly Gains But Momentum LackingThe EUR/USD pair edged higher above 1.0800, extending gains into a second day on Tuesday despite higher U.S. yields limiting its upward momentum. While the U.S. dollar has weakened overall and the risk tone has improved, the pair is struggling to make significant gains. At the time of writing, the EUR/USD pair is trading at the 1.0845 zone, 0.43% above its opening price. Banking sector-related concerns have continued to ease. U.S. yields advanced, with the one on the 10-year note reaching 3.57%. Wall Street indexes started the session on a strong footing but then faltered. Meanwhile, the euro has benefited from hawkish European Central Bank (ECB) expectations. ECB members have continued to reassure that the European banking system is resilient, focusing mainly on battling inflation. In contrast, the Fed is expected to pause its tightening cycle, as according to swap markets, the chances of no hike at the May meeting stand above 60%. In the U.S., data showed consumer confidence improved in March, with the Conference Board Index rising to 104.2. On Thursday, several Eurozone countries will publish consumer inflation data, while the U.S. will release the core personal consumption expenditures price index on Friday. From a technical perspective, the EUR/USD pair holds a short-term bullish outlook, although indicators on the daily chart exhibit a lack of momentum. On the upside, the 1.0900 area stands as a critical resistance level. A break above could pave the way for a retest of February’s high of 1.1032. On the flip side, support levels are seen at the 1.0750 zone, followed by the 20-day SMA and the 100-day SMA at 1.0696 and 1.0638, respectively.
by Alex_Boltyan_FXAnalyst
EUR/USD Holds Near 1.0800 on Easing Banking Sector FearsThe EUR/USD pair holds onto modest daily gains just below 1.0800 on Monday as easing banking sector fears lifted investors’ sentiment, while German IFO data showed improvement in expectations in March. At the time of writing, the EUR/USD pair is trading at 1.0790, 0.3% above its opening price. On the other hand, the US Dollar Index (DXY) is trading 0.2% down on the day at the 102.90 area. News that First Citizens Bancshares Inc. has bought defunct lender Silicon Valley Bank (SVB) eased concerns surrounding the banking crisis, helping the sector’s equities rebound. Germany reported the IFO Business Climate Index, which came in at 93.3, beating the consensus forecast of 90.9 and increasing from the previous figure of 91.1. The report also showed that the Current Assessment and Expectations indexes also came in better than expected at 95.4 and 91.2, respectively. Across the pond, US bond yields advance sharply on Monday amid the better market mood. The 10-year note yield stands at 3.51%, up by over 4% on the day. In addition, Wall Street indexes opened higher, with the S&P 500 and the Dow Jones trading in the green, although the Nasdaq has dipped into the red. From a technical perspective, the EUR/USD pair maintains a positive short-term bias, according to indicators on the daily chart, while the price remains above its main moving averages despite the recent downward correction. In terms of technical levels, the EUR/USD needs to decisively break above 1.0900 to reignite the bullish momentum, targeting the February high at 1.1032. On the flip side, immediate support levels could be found at the 1.0710-00 zone and the 20-day SMA at around 1.0675.
by Alex_Boltyan_FXAnalyst
Gold Threatens $2,000 Area Amid Banking JittersGold prices consolidated near recent highs on Friday, as investors' sentiment deteriorated on the back of renewed banking sector concerns after the stock of the German giant Deutsche Bank plummeted over 10%. At the time of writing, the spot price, XAU/USD, is trading at the $1,995 area an ounce, virtually unchanged on the day. The yellow metal attempted twice this week to break above the $2,000 psychological mark but failed, having posted a one-year high of $2,009. On Friday, European banking stocks suffered heavy losses, led by Deutsche Bank shares which plummeted more than 10% on a spike in credit default swaps. The risk-averse environment favored the dollar across the board, which has limited the XAU/USD upside. Gold prices peaked above $2,000 this week after the Federal Reserve delivered a "dovish hike." Even though the FOMC raised rates by 25 basis points as expected, the central bank dropped the hawkish forward guidance. Additionally, the dot plot suggested most FOMC members foresee just one more 25-bps increase this year. From a technical perspective, the XAU/USD picture remains bullish, according to indicators on the daily and weekly charts. Still, the weekly indicators have lost bullish momentum, given the XAU/USD failure to consolidate above $2,000. A decisive break of this level is needed to pave the way higher, with the next bullish target standing at March 2022 high of $2,070 and the $2,100 area. On the flip side, the next support level is seen at the former Fibonacci resistance at $1,970, followed by the $1,900 zone, where the 20-day SMA converges with another retracement level.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
GBP/USD Briefly Rises Above 1.2300 After BoE Hike The GBP/USD pair advanced for a second day in a row on Thursday, following the Bank of England's (BoE) decision to raise its main interest rate by 25 basis points to 4.25%. The BoE didn't rule out further hikes, which helped underpin the pound.However, the deterioration in the market sentiment during the New York session lifted the greenback and weighed on the pair, which retraced part of its intraday gains. At the time of writing, the Cable trades at the 1.2290 zone, up 0.21% from its opening price, having printed a three-week high of 1.2343 after the BoE announcement. The Federal Reserve also delivered a 25 bps rate increase on Wednesday. Powell's comments and the dot plot led investors to anticipate just one more 25 bps hike in 2023, which put the dollar on the defensive. The Bank of England, like the Federal Reserve and the European Central Bank (ECB), has prioritized the fight against inflation, citing the robustness and resilience of the U.K. banking system. Furthermore, the BoE's economic forecast anticipates a significant drop in inflation in Q2 2023, with a slight increase in economic activity over the same period. On Wednesday, the U.K.'s Office for National Statistics reported that the Consumer Price Index (CPI) had risen to 10.4% on a yearly basis in February, up from 10.1% in January and surpassing market expectations of 9.8%. The core CPI also increased from 5.8% to 6.2% over the same period, exceeding consensus estimates. From a technical standpoint, the GBP/USD retains a bullish bias on the daily chart, with indicators in positive territory and the pair above its main moving averages. On the upside, short-term resistances are seen at the 1.2300 psychological level, followed by March 23 high at 1.2343 and then the 1.2400 zone. On the other hand, support levels could be found at 1.2200, the weekly lows at around 1.2170 and the 1.2100 mark.
by Alex_Boltyan_FXAnalyst
EUR/USD Moves Towards 1.0800 Ahead of Fed's DecisionThe EUR/USD pair has advanced modestly on Wednesday as investors remain sidelined ahead of the Federal Reserve Open Market Committee (FOMC) decision. At the time of writing, the EUR/USD pair is trading at the 1.0790 zone, 0.23% above its opening price. All eyes are on the Federal Reserve decision to be released at 18:00 GMT, which will be accompanied by the statement and the dot plot with updated members’ projections. Half an hour later, Chairman Jerome Powell will speak at a press conference. Hours ahead of the verdict, the CME FedWatch Tool points to a 25 bps rate hike as the most likely outcome (89.3%) versus no change (10.7%). While the banking turmoil seems contained, at least at the time being, the Fed is far away from taming inflation. A 50 bps rate increase seems out of the table, so if the Fed surprises with such an increase, the dollar could rally across the board. Investors will also scrutinize the statement, the dot plot and Powell’s wording. While the technical picture becomes less relevant ahead of the highly anticipated decision, the EUR/USD maintains a bullish short-term bias according to indicators on the daily chart while the price continues to rise above its main moving averages. The EUR/USD pair needs to reclaim the 1.0800 zone to pave the way higher, with 1.0900 –psychological level and 50% retracement of the 1.2266-0.9535 decline – as the next target and critical barrier on the upside. On the flip side, immediate supports are seen at 1.0700 and the 20-day SMA at 1.0640. The broader perspective will remain positive if the pair manages to hold above 1.0500 after the Fed event.
by Alex_Boltyan_FXAnalyst
Gold Backs Away From Yearly Highs With Fed In The SpotlightGold prices continued to pull back on Tuesday as market sentiment improved as investors brace for the Federal Reserve decision on Wednesday. At the time of writing, the spot price, XAU/USD, is trading at $1,940 an ounce, nearly 2% below its opening price, having lost around $70 or 3.5% from its one-year high of $2,009 scored on Monday. The retreat in gold prices has been mainly driven by soaring U.S. Treasury yields amid some relief among investors regarding the banking crisis. The 10-year note yield has risen 10 bps to 3.583% after striking multi-month lows the previous day. The Federal Reserve two-day meeting concludes on Wednesday. After the recent developments in the banking sector, investors now speculate the FOMC will take a more cautious approach when it comes to rising rates. The CME FedWatch Tool shows an 80% probability of a 25 bps hike and 20% of a no-hike decision, while a 50 bps increase looks out of the picture, but Powell and fellow policymakers could still catch markets by surprise. From a technical perspective, the XAU/USD holds a positive bias as indicators hold into positive ground on the daily chart despite the last sessions’ price pullback. Immediate support is seen at the $1,895 area, former support and 61.8% retracement of the $2,070-$1,615 decline, followed by the 20-day SMA at $1,870. Loss of the latter could deteriorate the technical setup. On the flip side, the short-term key resistance area is $1,990-$2,010. A break above this level would expose 2022 highs at the $2,070 zone.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Advances Beyond 1.0700 As Investors Await FOMC VerdictThe EUR/USD pair gained ground at the start of a new week, climbing above 1.0700 as investors are betting on higher odds the Federal Reserve will raise rates at a slower pace on Wednesday. At the time of writing, the EUR/USD pair is trading at 1.0723, 0.6% above its opening price, after hitting a daily high of 1.0730 and a low of 1.0632. The financial crisis, triggered by the downfall of several U.S. banks, has lifted expectations global central bankers will take a step back in their tightening cycles. On Sunday, the Federal Reserve announced a joint-collaboration plan with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank to improve liquidity provision via the standing U.S. dollar liquidity swap line arrangements. The move came after Swiss authorities intervened to have UBS buy Credit Suisse to prevent a disorderly bankruptcy of the latter. U.S. Treasury yields have recovered after falling sharply earlier on the day, with the 10-year note yielding 3.498% and the 2-year note rate at 3.974%. Meanwhile, Wall Street main indexes are trading in the green, reflecting the improvement in sentiment. Ahead of the FOMC verdict on monetary policy on Wednesday, the bets of a non-hike decision increased somewhat. Still, according to WIRP, investors continue to bet on higher possibilities of a 25 bps raise on Wednesday. From a technical perspective, the EUR/USD pair's short-term outlook has turned positive according to indicators on the daily chart, while the price continues to print higher highs above its main moving averages. On the upside, short-term resistance levels are seen at the 1.0760 zone and the 1.0800 psychological level. On the flip side, support levels line up at the 20- and 100-day SMAs, currently at 1.0625 and 1.0575, respectively.
by Alex_Boltyan_FXAnalyst
Gold Reaches Six-Week Highs Amid Market Jitters Gold prices resumed the advance on Friday, making fresh six-week highs, as the U.S. dollar weakened on the back of declining Treasury yields. In the absence of first-tier events, investors continue to take cues from risk flows and the bond market. At the time of writing, spot gold, XAU/USD, is trading at $1,950 an ounce, 1.6% above its opening price and is on track to post a 4.5% weekly gain, the third in a row. Uncertainty regarding the banking sector and how central banks will respond keeps investors on edge, favoring the demand for safe-haven, such as government bonds and the precious metal. The decline in U.S. Treasury yields has helped underpin gold prices. The U.S. 10-year yield fell to 3.45% (-3.6%), while the 2-year rate sits at 4.02% (-3.5%). Data from the U.S. showed industrial production stagnated in February, while the University of Michigan (UoM) consumer sentiment index deteriorated in March. On a positive note, the UoM 5-year inflation expectation edged slightly lower to 2.8%. All eyes now turn to the Federal Reserve policy decision next week in the light of the banking crisis, with markets expecting a 25 basis point rate hike this time around. The technical outlook remains bullish for XAU/USD on the weekly and daily charts, favoring more gains for the week ahead. Indicators point higher in positive territory, while the 20- and 100-week SMAs have completed a bullish cross. Still, the daily RSI is close to overbought territory, which could bode a consolidation phase before another leg higher. On the upside, the $1,973 level stands as a critical resistance, where the 78.6% retracement of the $2,070-$1,615 fall stands. Beyond this level, the $2,000 psychological mark is the next barrier to consider. On the flip side, the immediate support level is seen at the $1,890-$1,900 zone, followed by the 20-day SMA at $1,855.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Holds Onto 1.06, ECB Hikes Rates Despite Banking TurmoilThe EUR/USD pair oscillates around 1.0600 on Thursday following the European Central Bank's (ECB) decision to raise rates by 50 basis points as expected, recovering some of Credit Suisse's driven losses the previous day. At the time of writing, the EUR/USD pair is trading at 1.0605, 0.23% above its opening price, after hitting a daily high of 1.0635 earlier on the day. The euro has recovered nearly a hundred pips after bottoming at a two-month low of 1.0516 on Wednesday. As widely anticipated, the ECB increased three main rates by 50 bps on Thursday, sending the deposit facility rate to 3%. The lack of forward guidance was the only notable change as the ECB highlighted the importance of the data-dependent approach, which "will be determined by the inflation outlook in light of economic and financial data." In a presser following the announcement, ECB President Christine Lagarde stated, "It's impossible to determine what the rate path will be" relating to the banking situation and the economic slowdown in the EU. However, she also said that the banking sector is currently in a much stronger position than in 2008 and that the ECB can exercise creativity in short order if there is a liquidity crisis. "We are monitoring current market tensions closely and stand ready to respond as necessary to preserve price stability and financial stability in the euro area," reads the statement. Meanwhile, U.S. and European yields edged lower, signaling investors seeking refuge in government bonds amid worries regarding the banking sector on both shores of the Atlantic. The U.S. 10-year Treasury yield stands at 3.44%, while the German 10-year Bund yield sits at 2.21%. Data in the U.S. showed unemployment claims dropped to 192,000 in the week ending March 10, while the housing sector reported a 13.8% increase in building permits in February. Investors' attention now turns to the Fed decision next week, pricing a 25 bps hike as the most likely outcome. From a technical perspective, the EUR/USD short-term outlook has turned neutral to slightly bearish, according to indicators on the daily chart. However, the pair still holds above the 100-day Simple Moving Average (SMA), acting as dynamic support at the 1.0560 area. A break below the 100-day SMA will pave the way to a retest of the 1.0500 psychological level and the 2023 low of 1.0483. On the flip side, resistance levels could be found at the 20-day SMA at 1.0623 and 1.0700, ahead of weekly highs at the 1.0750 region.
by Alex_Boltyan_FXAnalyst
Gold Jumps As Credit Suisse Bank Sparks Contagion Fears Gold prices extended gains on Wednesday as risk aversion hit markets amid fears the U.S. banking crisis spreading into the Old Continent, with Credit Suisse shares plummeting. Against this backdrop, global government yields have fallen sharply, favoring gold's advance. At the time of writing, the spot price, XAU/USD, is trading at the $1,935 area, up 1.7% on the day and accumulating more than a $100 gain from last week's low. Following the Silicon Valley Bank (SVB) collapse in the United States, fears were reignited on Wednesday after shares of Credit Suisse – Switzerland's second-largest bank – lost nearly 30% in Zurich. The slump came after the top shareholder said it could not provide further support. Trading was temporarily halted in Credit Suisse and other European banks, such as France's Société Générale and Italy's UniCredit. The yellow metal benefited, given its safe-haven status and was further underpinned by government yields falling on both sides of the Atlantic. U.S. 10-year note rate dropped over 7% to 3.43%, while the 10-year German Bund yield tumbled 13% to 2.13% on Wednesday. From a technical standpoint, the XAU/USD pair holds the short-term bullish perspective according to indicators on the daily chart, while the price continues to print higher highs above its main moving averages. Still, the RSI is approaching overbought territory, suggesting a corrective move might occur before another leg higher. On the upside, if the yellow metal advances above $1,935, the following resistance levels could be faced at the February high of $1,960 and the $2,000 area. On the flip side, short-term supports are seen at the $1,890 zone, followed by the 20- and 100-day SMAs at $1,845 and $1,815, respectively.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Takes a Breather After U.S. CPI Data, ECB EyedThe U.S. dollar took a breather on Tuesday following the previous day’s sell-off as markets’ jitters surrounding the Silicon Valley Bank (SVB) collapse quieted, while U.S. consumer inflation data showed a slight deceleration in February. At the time of writing, the EUR/USD pair is trading at the 1.0730 zone, virtually unchanged on the day, with the upside still capped by the 1.0750 zone. Meanwhile, the DXY index trimmed daily gains and stabilized around 103.60 after hitting a daily high of 104.05. The U.S. Bureau of Labor Statistics reported that the Consumer Price Index came in line with expectations in February, with annualized inflation hitting 6%, down from its previous reading of 6.4%. On the other hand, the core CPI inflation rate was reported at 5.5% YoY, in line with analysts’ consensus. Following the data, U.S. bond yields recovered across the curve, helping the dollar. The 10-year bond yield is trading at 3.69%, while the 2-year rate recovered nearly 7% and stands at 4.25%. Amid the banking crisis triggered by the SVB collapse on Friday, investors seem to have taken out of the table a 50 bps rate hike by the Federal Reserve at the March 21, 22 meeting. The bets on a 25 bps increased to 73%, while on Monday, the case of a no-change decision was stronger. Wall Street indexes welcomed CPI data and the improvement in sentiment. The S&P 500 gained 1.65%, the Dow Jones Industrial Average advanced 1.06%, and the Nasdaq Composite posted a 2.14% daily advance. On Thursday, the European Central Bank (ECB) will decide on monetary policy, with analysts expecting a 50 basis point rate hike despite the recent developments. Technically speaking, the EUR/USD pair maintains a slightly bullish short-term outlook, according to indicators on the daily chart. The pair is trading above its key moving averages, and the RSI and MACD have moved into the green. On the upside, the following resistance levels are seen near this week’s highs at the 1.0750 zone and 1.0800 ahead of the more significant 1.0900 region. On the other hand, supports could be faced at the 20-day SMA at 1.0630 and the 1.0600 psychological level, followed by the 100-day SMA at 1.0545.
by Alex_Boltyan_FXAnalyst
EUR/USD Rises Past 1.07, Investors Bet On A Less Aggressive FedThe EUR/USD pair advanced beyond the 1.0700 level on Monday despite the risk-off environment prompted by the Silicon Valley Bank shutdown. The greenback suffered the pressure of lower U.S. yields amid expectations the Federal Reserve will have to hold the trigger on rates amid the banking sector turmoil and somewhat disappointing jobs data. At the time of writing, the EUR/USD pair is trading at 1.0730, up 0.85% on the day, after hitting a one-month high of 1.0738. Meanwhile, the DXY Index has fallen below the 104.00 level to trade at its lowest level since February 16, around 103.65, recording a 0.95% daily loss. Investors' focus now shifts to U.S. consumer inflation data on Tuesday as President Joe Biden attempts to calm down banking system fears. Still, the banking crisis could offset macroeconomic data ahead of the Fed's meeting. Investors are cutting down expectations of a 50 bps rate hike at the March 21-22 meeting. Against this backdrop, the U.S. bond yield plummeted across the curve on Monday, as the 10-year yield is trading at 3.47%, down by nearly 6%. The 2- and 5-year bond rates stand at 4.17% (-9%) and 3.69% (-6.8%), respectively. The market's pace will likely continue to be driven by risk flows and investors' expectations on how the Fed will respond. FOMC officials must now weigh the trade-off between controlling inflation and lending some air to the financial system. From a technical perspective, according to indicators on the daily chart, the EUR/USD pair holds a slightly bullish short-term outlook. The RSI and MACD jumped to positive territory, and the pair now trades above its main moving averages. On the upside, the following resistance levels line up around 1.0740 and at the 1.0800 level ahead of the more relevant 1.0900 zone, which is the 50% retracement of the 1.2266-0.9535 decline. On the downside, supports are seen at the 20-day SMA at 1.0630, followed by the 1.0600 psychological mark and the 1.0540 zone (100-day SMA).
by Alex_Boltyan_FXAnalyst
EUR/USD Set To Record Second Straight Weekly Gain After NFPThe EUR/USD pair advanced on Friday as the dollar weakened across the board following February's nonfarm payroll report release. At the time of writing, the EUR/USD pair is trading above its opening price at 1.0655, up 0.73%on the day, having reached a three-week high of 1.0700 in the aftermath of the report. After bouncing two-month lows earlier this week, the pair has dodged a bullet and is on track to post its second weekly gain in a row. The U.S. Bureau of Labor Statistics reported the U.S. economy added 311,000 jobs in February, beating the market's consensus of 205,000 but down from the stunning January reading of 504,000 (revised from 517,000). On the other hand, wage inflation, measured by the average hourly earnings, slowed to 4.6% YoY, below the market's expectations of 4.7%. In addition, the unemployment rate unexpectedly rose to 3.6% from its previous reading of 3.4%. The mixed job report tempered expectations of a 50 bps rate hike by the Federal Reserve at the March 21, 22 meeting. Odds of a 50 bps increase have fallen to around 40% from above 60% before the nonfarm payrolls data. Additionally, the shutdown of the Silicon Valley Bank (SVB) by U.S. authorities on Friday raised concerns about the financial system, putting lower rate increases back on the table. Against this backdrop, U.S. bond yields have fallen sharply, with the 10-year yield at 3.71%. The 2-year rate has dropped to 4.63% from above 5% earlier this week. Wall Street main indexes are posting losses of more than 1% each. Next week's U.S. Consumer Price Index figures will also be key in shaping expectations ahead of the FOMC decision. From a technical viewpoint, the EUR/USD short-term bias has improved, as indicators are entering positive territory on the daily chart, while the price has regained the 20-day Simple Moving Average (SMA). A break above the 1.0700 level would pave the way to a steeper recovery, targeting the 1.0800 zone. On the other hand, short-term support levels could be found at 1.0570, 1.0530 (100-day SMA) and the 1.0500 psychological level.
by Alex_Boltyan_FXAnalyst