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USD/CAD:FUNDAMENTALS INFO + TECHNICAL SETUP | SHORT TRADE 🔔USD/CAD: All eyes on the BoC next week as US dollar reaches for the skies Bank of Canada is expected to announce that it is ending its balance sheet reinvestment program. USD/CAD presses against daily resistance as the Fed narrative underpins. USD/CAD is holding in the resistance around 1.2590 that was penetrated but simultaneously hamstrung the pair overnight, pulling the pair back from a full breach into the 1.26 area. The US dollar has reached the highest in two years and the US Treasury 10-year yield touched a three-year high following hawkish signals from the Federal Reserve. In Asia, the greenback has extended those highs. DXY, hit a fresh 99.903 cycle high, the highest since late May 2020 as it reaches towards blue skies at the psychological 100.00 mark. Underpinning the greenback, the 2 year-10 year spread widened also due to the Fed's plans to reduce its balance sheet. The yield on 10-year Treasury notes was higher by 3.8 basis points to 2.647% while the 2-year note yield was losing 4.5 basis points at 2.457%, leaving the 2-10 spread at 18.72 basis points by the close of play on Wall Street. Meanwhile, the Fed narrative is keeping a lid on rallies in the commodity currencies and the price of oil tanking to the lowest levels since mid-March has not helped the case for CAD. The minute's Fed released yesterday from the Fed's March meeting underpin the worries of higher prices and reinforce the prospect that the US central bank's balance sheet reduction is imminent. On Thursday, St. Louis Fed president James Bullard polished this theme by saying the Fed remains behind the curve despite increases in mortgage rates and government bond yields. As for oil, West Texas Intermediate (WTI) crude oil has been pressured this week and it carved out a fresh low on Thursday, reaching a low of $93.84c after falling from a high of $98.80c. The price of crude oil has fallen for a second straight day on Thursday. Wednesday's announcement of the release of 60-million barrels of strategic reserves from members of the International Energy Agency has weighed on the price at the same time that a drop in Chinese demand due to quarantines hits the market. BoC in focus Looking ahead to next week, the Bank of Canada is expected to announce that it is ending its balance sheet reinvestment program at next week's interest rate announcement. ''In practice, we expect the Bank will end its secondary market buybacks by the end of April ($650mn/week on average), but we look for it to continue retaining a small amount of primary market issuance (~7% of nominal auctions),'' analysts at TD Securities said. ''Roughly a third of the BoC's bond holdings are scheduled to mature by the end of 2023, so we look for the balance sheet to decline relatively quickly through the early phases of QT. However, the Bank has indicated that it doesn't expect to reach pre-pandemic levels of settlement balances, which suggests that CORRA will continue trading below the BoC's target."
Short
by FOREXN1
6
GBP/USD: FUNDAMENTAL INFO + TECHNICAL SCENARIO | LONG SETUP 🔔GBP/USD sees a downside to monthly lows at 1.3050 as the Fed looks to return to neutral rates quickly. GBP/USD is likely to slip to near 1.3050 on the hawkish stance from the Fed. The Fed may achieve the target of the neutral rate by the first quarter of 2023. Next week CPI numbers from the US and the UK will remain the key events to watch out. The GBP/USD pair is oscillating in a wider range of 1.3045-1.3106 over the last three trading sessions. The cable seems to extend losses after tumbling below the April 6 low at 1.3045 as the asset has struggled to surpass the round level resistance of 1.3100 decisively. The asset is driving lower after the release of hawkish Federal Open Market Committee (FOMC) minutes and elevating support for the neutral rates by the Federal Reserve (Fed) policymakers on completion of the stated objective of helicopter money and ultra-loose monetary policy. The FOMC minutes have dictated that the Fed is considering one or more interest rate hikes of 50 basis points (bps) this year to contain the inflation mess. Apart from that, a sheer balance sheet reduction will kick-start from May to squeeze liquidity from the market. Fed’s neutral rate is viewed at 2.4% by a majority of the policymakers as its application will not reduce growth and dampen demand. Considering the mathematics behind reaching the neutral rates at 2.4%, the Fed is likely to reach the destination of neutral rates by the first quarter of 2023. Going forward, the focus of the market participants will remain on the US Consumer Price Index (CPI), which is due on Tuesday. A preliminary estimate for the yearly US CPI is 8.3% against the previous print of 7.9%. The UK’s docket will also report its yearly CPI numbers, which are expected to land at 6.6% in comparison with the prior figure of 6.2%.
Long
by FOREXN1
1
EUR/USD: FUNDAMENTALS + TECHNICAL SETUP | LONG TRADE 🔔EUR/USD looks to drop near 1.0850 on Ukraine crisis, hawkish ECB minutes EUR/USD is eyeing more downside as DXY strengths on discussions of restoration to neutral rates. The shared currency has failed to capitalize on hawkish ECB minutes and decent Retail Sales. Members of the UN Human Rights Council voted in favor of ceasing Russia as an associate. The EUR/USD pair has displayed a six-day losing streak and is likely to extend losses on Friday amid expectations of escalation in the Ukraine crisis after Russia ceases to be a member of the United Nations (UN) Human Rights Council. The members of the UN Human Rights Council voted in favor of stripping Russia from the members' list after the Russian rebels committed war crimes in Bucha, Ukraine. As world nations are isolating Russia from major communities, Russian leader Vladimir Putin could de-escalate progress talks with Ukraine, and the Ukraine crisis may continue to elevate further. Meanwhile, the hawkish European Central Bank (ECB) minutes of March’s monetary policy meeting have failed to cushion the shared currency. Most of the ECB policymakers have favored immediate action through monetary policy to corner the galloping inflation. Apart from that, the ECB should halt the Asset Purchase Programme (APP) as the stated objective behind its launch has been achieved. Along with the hawkish ECB minutes, the shared currency has also failed to capitalize upon the outperformance of the Euro Retail Sales. The Eurostat reported Retail Sales at 5%, higher than the preliminary estimate of 4.8% but significantly lower than the previous print of 8.4%. On the dollar front, the US dollar index (DXY) is eyeing a trigger, which will drive the asset towards the much-awaited resistance of the 100.00 figure. Federal Reserve (Fed) policymakers have started favoring the restoration of policy rates to neutral amid rising inflation and an objective of self-dependent economy.
Long
by FOREXN1
4
EUR/USD Forecast: Has euro found a bottom? LONG SETUP 🔔EUR/USD has failed to stage a convincing rebound early Thursday. Hawkish tone in FOMC's March meeting minutes lifted US yields late Wednesday. Investors await ECB's Monetary Policy Meeting Accounts and Fedspeak. EUR/USD has extended its weekly slide on Wednesday and ended up closing the fifth straight trading day in negative territory. The pair managed to stage a technical correction during the Asian trading hours on Thursday but struggled to gather bullish momentum. Although the technical picture points to oversold conditions, it's too early to count out further losses. The minutes of the FOMC's March meeting showed late Wednesday that many participants noted that they would have preferred a 50 basis point (bps) hike at that meeting. Additionally, the publication confirmed that the balance sheet reduction would start after the May meeting. With the immediate market reaction, the benchmark 10-year US Treasury bond yield advanced to its strongest level in nearly three years and helped the greenback outperform its rivals. On the flip side, European Central Bank (ECB) Chief Economist Philip Lane argued that it was important for them not to overreact to the surge in inflation. The policy divergence between the ECB and the Fed continues to widen as the European economy faces a heightened risk of recession amid the ongoing Russia-Ukraine crisis. Meanwhile, the European Union is reportedly looking to delay the ban on Russian coal imports to mid-August from mid-July. Nevertheless, this headline doesn't seem to be having a noticeable impact on the shared currency. Later in the day, the ECB will release the accounts of its March monetary policy meeting. Even if there is a hawkish tone in the ECB's publication, the shared currency's gains could remain limited because the geopolitical developments since March 10 have not been in favor of the euro. The US economic docket will feature the weekly Initial Jobless Claims data. More importantly, several FOMC policymakers, including St. Louis Federal Reserve President James Bullard and Chicago Fed President Charles Evans will be delivering speeches.
Long
by FOREXN1
1
Trading Idea - #DeliveryHeroMy trading idea for #DeliveryHero - LONG / BUY Entry: 45.00 EUR Target: 91.00 EUR (+100% profit) Stop: 27.20 EUR Delivery Hero is currently forming a support line around the 39.00 EUR mark. The consolidation has formed higher highs for the moment. A breakout from the range is still awaited. Significant resistance for this is at 50.40 EUR. Delivery Hero has a steadily growing number of customers, which means great potential for revenue growth. The company has grown on the basis of investor funds. The goal of the management is to create the sharp zero in the operating business, on its own. At Delivery Hero, they are looking to capitalize on unused advertising opportunities. The demand for Delivery Hero shares has risen strongly in the last 2 months. The trading volume on the XETRA stock exchange has increased noticeably.
XETR:DHERLong
by Traderherz-Analytics
S&P 500 : FUNDAMENTALS + TECHNICAL SCENARIO FORECAST | SHORT 🔔S&P 500 retreats from 4600 on a dismal market mood, on Russia-Ukraine conflict The S&P 500, the Dow Jones, and the Nasdaq Composite recorded losses in a risk-off market mood, courtesy of Russo-Ukraine tussles. Russia insists on receiving natural gas payments in roubles, threatens to block proceedings in euros/dollars. Gold and the greenback are rising, while US Treasury yields and oil are trading in the red. US equities are recording losses in the North American session as Wall Street is about to finish March on a lower note. The S&P 500, the Dow Jones Industrial, and the tech-heavy Nasdaq Composite are falling between 0.30% and 0.43%, each one sitting at 4,576.32, 35075.94, and 15,014.01 respectively A negative market mood weighed on US equities A risk-off market mood courtesy of Russian President Vladimir Putin, and continued fighting between Russia and Ukraine, keep grabbing the headlines. Russian President Putin signed a decree establishing natural gas trade rules, like payments in roubles, new proceedings in euros and US dollar could also be blocked. If demands are not met, current contracts will be halted. Meanwhile, the greenback rose on the headline. In fact, it remains firm, as portrayed by the US Dollar Index, up 0.43%, sitting at 98.256. Contrarily, US Treasury yields continue falling for the second consecutive day, down four basis points, down at 2.316%. Aside from this, Utilities, Consumer Staples, and Real Estate are the leaders of the trading session, up 0.69%, 0.34%, and 0.27%. The laggards are Communication Services, Financials, and Consumer Discretionary, down 1.14%, 1.02%, and 0.78%. In the commodities complex, the US crude oil benchmark, WTI, is losing 5.27%, trading at $101.73 BPD, weighed by news that the Biden administration would tap 1 Million BPD from the SPR oil reserves for a period of six months. Precious metals like gold (XAU/USD) are rising 0.61%, exchanging hands at $1944.55 a troy ounce, boosted by a risk-off sentiment. The US economic docket featured the Fed’s favorite gauge of inflation, the Core PCE for February, which rose by 5.4% y/y, lower than the 5.5% estimated, while US Initial Jobless Claims for the week ending on March 26 increased by 202K, higher than the 197K expected. On Friday, April 1, the US Department of Labor will reveal the Nonfarm Payrolls report for March. Even though the NFP is one of the most important economic indicators, now that the Fed is focused on inflation, it has taken a backseat, except for Average Hourly Earnings, which could shed some light on rising inflation.
BLACKBULL:SPX500Short
by FOREXN1
1
NZD/USD: FUNDAMENTAL INFO + TECHNICAL FORECAST | SHORT 🔔NZD/USD Price Analysis: Crucial resistance of 0.7000, downside looks likely Confluence of psychological resistance of 0.7000 indicates the strength of bears. Kiwi bulls have surrendered their establishment above 61.8% Fibo retracement. The momentum oscillator RSI (14) seems losing its momentum after dropping below 60.00. The NZD/USD pair has displayed multiple failed attempts while practicing an establishment above 0.7000. The pair have witnessed an extreme responsive selling from the market participants on Tuesday, which has dragged the kiwi bulls below 0.6950. In the early Asian session, the asset is performing subdued and is expected to extend losses after slipping below Wednesday’s low at 0.6933. On a daily scale, NZD/USD has formed a ‘Gravestone Doji’ candlestick pattern, which signals a failed attempt by the bulls on driving the asset to fresh highs. The pair has failed to breach its old recurring barricade of 0.7000, which has also been encountered consecutively in the last two weeks. Apart from that, the kiwi bulls have lost their establishment above 61.8% Fibonacci retracement (placed from 21 October 2021 high at 0.7219 to 28 January low at 0.6529) at 0.6956. However, the trendline placed from the 28 January low at 0.6529 will continue to act as major support going forward.
Short
by FOREXN1
2
GOLD: FUNDAMENTALS + TECHNICAL ANALYSIS | SHORT SETUP 🔔XAU/USD is auctioning in a narrow range of $1,916.00-1,925.28 amid uncertainty over the FOMC minutes release. Gold prices are forming a diamond pattern that signals a bullish reversal after a prolonged consolidation. The DXY is approaching 100.00 amid a souring market mood. Gold (XAU/USD) is displaying a subdued performance on Wednesday after witnessing a steep fall from around $1,945 in the New York session on Tuesday. The precious metal is oscillating in a narrow range of $1,916.00-1,925.28 as investors are waiting for the release of the Federal Open Market Committee (FOMC) minutes, which are due on Wednesday. The FOMC minutes will unfold the mathematics behind the stance of the Federal Reserve (Fed) Chair Jerome Powell and his colleagues, which was taken for the monetary policy announced in March. This will also provide the status of the US economy. It is worth noting that the Fed increased the interest rate by 25 basis points (bps) in its last monetary policy meet. On Tuesday, a sheer intraday bearish move in the precious metal was the reflection of the hawkish stance dictated by the Fed policymakers. Fed Governor Lael Brainard cited that the Fed is ready for aggressive action if the indicators of inflation and inflation expectations get worsen. Also, the balance sheet reduction program will pick up soon, which will de-escalate the helicopter money from the economy. Meanwhile, the US dollar index (DXY) is aiming to kiss the psychological figure of 100.00 amid souring market sentiments on hawkish stances from the Fed officials. Also, the 10-year US Treasury yields have printed a fresh three-year high at 2.62%.
OANDA:XAUUSDShort
by FOREXN1
5
EUR/USD:UPDATE | FUNDAMENTAL + TECHNICAL | SHORT CONTINUATION 🔔A combination of factors dragged EUR/USD to a four-week low on Wednesday. The Ukraine crisis, uncertainty over the French elections weighed on the euro. Hawkish Fed expectations, the risk-off mood boosted the safe-haven greenback. Investors now look forward to the FOMC meeting minutes for a fresh impetus. The EUR/USD pair added to its recent heavy losses and dropped to a four-week low, just below the 1.0900 mark during the Asian session on Wednesday. The shared currency was weighed down by fading hopes for a diplomatic solution to end the war in Ukraine, which, along with a strong US dollar rally, exerted downward pressure on the major. In the latest developments surrounding the Russia-Ukraine saga, the European Union announced new sanctions against Russia over its alleged war crimes in the Ukrainian town of Bucha. The sanctions include a ban on Russian coals, access to EU ports and transactions of four key Russian banks. Apart from this, worries about the outcome of the French elections turned out to be another factor that undermined the euro. The latest opinion polls indicated that French President Emmanuel Macron's far-right Eurosceptic rival, Marine Le Pen, has been closing the gap ahead of the first round on Sunday. On the other hand, the greenback continued drawing support from firming expectations that the Fed would adopt a more aggressive policy stance to combat stubbornly high inflation. The bets were reaffirmed by hawkish comments from Fed Vice Chair Lael Brainard. She said that the Fed would continue tightening monetary policy methodically through a series of interest rate increases and by starting to reduce the balance sheet at a rapid pace as soon as the May meeting. The markets quickly reacted and pushed the yield on the 2-year US government bond - which is highly sensitive to rate hike expectations - to its highest level since January 2019. Moreover, the yields on the 5-year and the benchmark 10-year bonds shot to their highest level since December 2018 and April 2019, respectively. This, along with a sell-off in the US equity markets, underpinned the safe-haven buck and further contributed to the offered tone surrounding the major. There isn't any major market-moving economic data due for release from the Eurozone on Wednesday, leaving the pair at the mercy of the USD price dynamics. Later during the US session, investors will take cues from the FOMC monetary policy meeting minutes. The incoming geopolitical developments would influence the pair and allow traders to grab some short-term opportunities.
Short
by FOREXN1
6
GOLD: FUNDAMENTALS+TECHNICAL ANALYSIS | SHORT SETUP 🔔 Gold price remains choppy within a familiar range amid mixed market sentiment. The West mulls additional punishments on Russia, US Treasury yields head south. Gold price remains stuck between two key daily averages, Fed minutes eyed for a fresh direction. Gold price defied the bullish odds and rebounded from multi-day troughs of $1,916, as the worsening Russia-Ukraine crisis and yield curve inversion infused safe-haven flows into the bright metal. Tensions surrounding the Russia-Ukraine war heightened after the US and European Union (EU) considered additional sanctions and penalties against Russia’s atrocities on innocent Ukrainian civilians. Russia, however, has denied allegations of war crimes. Investors remained on the edge while scurrying for safety in gold price, despite the US dollar’s strength. Adding to it, the US two-year Treasury yields climbed to their highest level since early-2019 while 10-year yields ticked lower, leading to the inversion of the yield curve, which usually hints at an incoming recession. Gold bulls, therefore, benefited even as Wall Street advanced on a tech stock rally. The Nasdaq and S&P 500 indices were boosted by mega-caps and a 20% jump in Twitter's shares. Gold price has tuned south once again on Tuesday, as the US dollar holds the higher ground while the yields seem to stabilize. The market mood remains mixed, with the Asian indices tracking Wall Street higher, although thin trading and Ukraine concerns keep investors on the back foot. Oil prices are firming up amid the specter of fresh sanctions on Russia, stoking inflation and growth fears. Attention now turns towards the US ISM and S&P Global Services PMIs, the UN Security Council meeting on Ukraine and the inverted Treasury yields curve for fresh impetus on gold price action. The Fed minutes this Wednesday, however, will be the key event risk, which will provide fresh insights on whether the world’s most powerful central bank will deliver a series of aggressive rate hikes to quell raging inflation.
OANDA:XAUUSDShort
by FOREXN1
3
EUR/USD:FUNDAMENTALS+TECHNICAL VIEW | SHORT SETUP 🔔EUR/USD Looks Increasingly Vulnerable To A Decline. EUR/USD fell on Monday as fresh claims of Russian war crimes in Ukraine led to increased speculation of more punitive sanctions against Russia. The news, combined with other developments over the weekend, dented hopes of a possible de-escalation in the war last week. Added downward pressure on the euro also came from firmer-than-expected US factory order data for February on what was a light day in terms of economic data. ECB Governing Council member Vasle, who hinted the ECB could raise interest rates by this year, lent little support to the euro in the current environment. The dip back below 1.10 is not just of psychological importance but also represents a break to the downside in the rising wedge pattern that has developed in recent weeks. This could be a prelude to continuing EUR/USD’s downtrend. This increases the probability that EUR/USD experiences a downside break of the longer-term symmetrical triangle pattern that has developed over recent years. Such a move could lead to an even more significant fall. EUR/USD tested the bottom end of this pattern on Mar. 8, before traders bid the pair higher. Geopolitical factors are unsurprisingly the driver of EUR/USD for the moment. Still, a host of ECB and Fed speakers this week could easily tilt the scales for the euro as much as Ukraine. Economic data could play an equally significant role as traders try to assess the impact of recent events on the euro area economy. The final March services PMI for the euro area is due for release on Tuesday and is likely to get more attention than usual in a relatively quiet week for data. The preliminary PMI dropped to 54.80 from 55.0 in April. More importance is likely to be placed on the release of the March Federal Reserve minutes on Wednesday, which is expected to outline the central bank’s plans for balance sheet reduction. A break above the 1.117 region in the coming days could lead to a more positive shift sentiment around the pair, but for the time being, the risks for EUR/USD looks increasingly tilted to the downside in terms of risk and reward.
Short
by FOREXN1
5
GBP/USD:FUNDAMENTALS+TECHNICAL ANALYSIS | SHORT SCENARIO | 🔔 GBP/USD has started to edge lower in the early European session. The pair could face renewed bearish pressure if 1.3100 support fails. Risk perception is likely to be the primary market driver on Monday. The British pound has started the new week in a calm manner but has started to inch lower toward 1.3100 in the early European session. The technical outlook points to a bearish tilt in the short term and sellers could take action in case 1.3100 support fails. The cautious market mood early Monday is making it tough for the British pound to gather strength. The UK's FTSE 100 Index is trading flat and the US stock index futures are posting small losses. The west is reportedly looking to ramp up sanctions against Russia on accusations of Russia having committed war crimes during the military offensive near Kyiv. This development could be assessed as a factor that might make it difficult for Ukraine and Russia to find a diplomatic solution. On Saturday, one of the negotiators for Ukraine said that they made enough progress to set up a meeting between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky to discuss a peace agreement. Nevertheless, investors remain sceptical and risk-sensitive assets stay on the back foot. There won't be any high-tier data releases from the US in the second half of the day and GBP/USD could find it hard to regain its traction unless risk flows return to markets. In the meantime, the dollar continues to capitalize on rising odds of a 50 basis points Fed rate hike in May following Friday's upbeat jobs report and hawkish Fed commentary. Nonfarm Payrolls in the US increased by 431,000 in March and the Labor Force Participation rate improved modestly to 62.4% from 62.3%. More importantly, wage inflation climbed to 5.6% on a yearly basis from 5.2% in April. Over the weekend, San Francisco Fed President Mary Daly noted that the case for a double-dose rate increase in May had grown unless there were negative surprises in data until the next meeting.
Short
by FOREXN1
5
GOLD:FUNDAMENTALS NEWS +TECHNICAL | BEARISH SCENARIO SHORT ⭐️Gold price kicks off a fresh week on a downbeat note, as bond rout extends. Hawkish Fedspeak, uptick in US wage inflation back aggressive tightening. Gold’s daily chart favors bears as Russia-Ukraine peace talks offer a ray of hope. Despite the below-forecast US Nonfarm Payrolls, the upward revisions to the previous release and hotter than expected earnings growth bolstered the US dollar’s recovery rally alongside the Treasury yields. US payrolls arrived at 431K in March vs. 490K expected and the 750K previous upward revision. A relatively upbeat US labor market report boosted aggressive Fed’s tightening expectations, weighing down on the non-interest-bearing gold price. The bond rout resumed on hopes for a double-dose rate hike at the May Fed meeting, which propelled the Treasury yields higher across the curve. Meanwhile, the worsening Ukraine crisis added to the demand for the safe-haven US dollar, exacerbating the pain in gold price. XAUUSD closed the week in the red near the $1,925 area. Gold price is extending the previous decline at the start of a fresh week this Monday, undermined by the extended bond rout, which has led to the inversion of the two-year and 10-year yield curve. Amidst holiday-thinned market conditions, with Chinese traders away, gold price is also feeling the pain from the dollar’s upside consolidative mode. Surging covid cases in China is sapping investors’ confidence, who are scurrying for safety in the buck, keeping any pullback in the US dollar index cushioned. Meanwhile, some optimism on the Russia-Ukraine front after last week’s peace talk also bodes ill for the yellow metal. A top Ukrainian negotiator said Saturday, “Ukrainian and Russian negotiators have reached an agreement on enough elements of a potential peace agreement that it is ready to be discussed between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky.” Later in the day, the sentiment around the bond market and the incoming headlines from the scheduled peace talks will likely be the main market drivers, in absence of the top-tier US economic data releases.
OANDA:XAUUSDShort
by FOREXN1
3
Trading Idea - #AboutYOUMy BUY idea for ABOUT YOU: Buy: 12.50 EUR Target: 20,50 EUR (+64%) Stop: 9,75 EUR ABOUT YOU is a German online shop for clothing, shoes and accessories based in Hamburg. The company currently employs around 400 people from 25 countries. 1. the operating result (EBITDA) of the past year is slightly above market expectations. Below the line is an increase in sales. 2. AboutYou has good growth to show in a difficult year 2021. This increases optimism for times of market recovery. 3. The business is strongly focused on Eastern and Central Europe. A calming of the Ukraine-Russia conflict could lead to a further boost in sales. 4. The current risks seem to be already priced in. Accordingly, a bottoming can also be seen on the chart. 5. On 1H time units, an inverse head-and-shoulders formation can be seen. In the classical context, this means the end of a downward movement.
XETR:YOULong
by Traderherz-Analytics
GOLD:FUNDAMENTAL INFOS+TECHNICAL OUTLOOK | SHORT SETUP 🔔Bearish wedge suggests more pain for gold bulls “The US Core PCE price index is due for release later on Thursday. Hotter inflation is likely to seal in a 50-basis points May Fed rate hike. Although concerns over a potential recession, in the face of the recent yield curve inversion and aggressive Fed’s tightening could have a major impact on the dollar and gold valuations.” “Gold price has confirmed a bearish wedge formation on the four-hour chart. If the bearish momentum extends, XAU/USD could fall further towards the $1,900 mark, below which a test of the March 29 lows of $1,890 will be inevitable.”
OANDA:XAUUSDShort
by FOREXN1
2
GBP/USD:FUNDAMENTAL INFO+TECHNICAL PROJECTION | LONG 🔔GBP/USD sticks to modest intraday gains, lacks follow-through beyond mid-1.3100s GBP/USD edged higher for the third straight day on Thursday amid modest USD weakness. Better-than-expected UK macro releases extended additional support to the British pound. Fed rate expectations, BoE’s dovish outlook warrants caution for aggressive bullish traders. The emergence of some USD selling during the early European session pushed the GBP/USD pair back closer to the mid-1.3100s in the last hour, though the uptick lacked bullish conviction. Following the previous day's pullback from the 1.3180-1.3185 region, the GBP/USD pair attracted some buying near the 1.3110 area on Thursday and turned positive for the third successive day. The US dollar languished near the two-week low amid the ongoing retracement slide and was seen as a key factor that extended some support to the GBP/USD pair. The British pound was further underpinned by better-than-expected UK macro data, showing that the economy expanded by 1.3% during the final quarter of 2021 as against the 1% estimated previously. Adding to this, the UK Current Account deficit fell sharply to £7.3 billion in Q4 2021 from the upwardly revised reading of £28.9 billion in the previous quarter. That said, a combination of factors helped limit any deeper USD losses and capped the upside for the GBP/USD pair, at least for now. The incoming geopolitical headlines dashed hopes for a diplomatic solution to end the war in Ukraine. This, along with the growing prospect of new Western sanctions against Russia, extended some support to the safe-haven buck. In the latest developments surrounding the Russia-Ukraine saga, a Kremlin spokesperson said on Wednesday that they have not noticed anything that looks like a breakthrough in negotiations. Moreover, an adviser to Ukraine’s President noted that Russia is transferring forces from Kyiv to encircle troops and launch attacks in the eastern part of the country. Apart from this, expectations that the Fed will adopt a more aggressive policy stance to combat high inflation favour the USD bulls. In fact, the markets have been pricing in a 50 bps rate hike move at the next two meetings. Conversely, the Bank of England has softened its tone on the need for further rate hikes. This, in turn, should keep a lid on the GBP/USD pair. Market participants now look forward to the US economic docket, highlighting the release of the Core PCE Price Index - the Fed's preferred inflation gauge. The focus, however, will remain on fresh developments surrounding the Russia-Ukraine saga. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to the GBP/USD pair.
Long
by FOREXN1
1
EUR/USD:FUNDAMENTALS INFO+TECHNICAL FORECAST | SHORT SETUP 🔔EUR/USD: Risks tilted toward a larger decline – Wells Fargo Analysts at Wells Fargo forecast a period of extended weakness for the EUR, with risks tilted to the downside. They see EUR/USD trading at 1.0800 by the end of the third quarter. Key Quotes: “We forecast a period of extended euro weakness; however, the risks are potentially tilted toward a larger decline than we currently expect.” “Growth slowed significantly in late 2021, and we expect a relatively gradual rebound in growth from early 2022. However, with higher energy prices likely to weigh on consumer purchasing power and given possible Ukraine uncertainties, Eurozone economic growth could be even more sluggish than we expect.” “Eurozone inflation has surprised to the upside, although the rise in core inflation has been less marked to date. Were Ukraine uncertainties to intensify, it is possible the ECB could move more gradually to less accommodative policy than we currently forecast, which should weigh on the euro. Should these risks transpire, the euro could soften more than we currently forecast, with the EUR/USD exchange rate perhaps falling as low as $1.0000.”
Short
by FOREXN1
2
GOLD:FUNDAMENTAL NEWS+TECHNICAL SCENARIO | SHORT IDEA 🔔Gold Price Forecast: XAU/USD to shrugg off US labour data – Commerzbank Gold is trading at just shy of $1,930 again. The ADP’s labour market data will be published in the US today, giving a foretaste of Friday’s official labour market report. However, its impact on the yellow metal should be limited. Under the influence of news about Ukraine war “The response of the markets reveals how nervous they are, and how news about the Ukraine war is influencing prices.” “Jobs reports should show that the US labour market is in good shape and encouraging the US Fed in its view to raise interest rates more sharply. Bigger rate hikes are already anticipated by market participants, however, as can be seen from the Fed Fund Futures. We believe they are already priced in, meaning that the impact of the labour market data on the gold price should be limited.”
OANDA:XAUUSDShort
by FOREXN1
2
EUR/USD:FUNDAMENTAL NEWS+TECHNICAL SCENARIO | SHORT 🔔EUR/USD pushes further and clinches new multi-week highs. The greenback remains offered as risk-on mood persists. Germany Flash Inflation Rate next of relevance in the docket. The European currency extends the optimism for another session and lifts EUR/USD to fresh 4-week highs in the vicinity of 1.1150 on Wednesday. EUR/USD up on weaker dollar, looks to Ukraine EUR/USD advances for the third consecutive session and trades in levels last seen in early March on the back of the persevering appetite for riskier assets and the investors’ exodus from the greenback. Indeed, the selling pressure in the US dollar has been exacerbated in past hours following inspiring news from the geopolitical landscape which has lifted hopes of a potential diplomatic solution to the war in Ukraine. The timing, however, remains pretty vague. The better mood in the pair is also reflected in the European money market, where the German 10y bund yields rose further and approach the 0.70% level for the first time since March 2018. Extra gains in spot came after ECB Board member Muller hinted at the idea that the bond purchases might end in Q3, while a rate hike may follow. In the same line, his colleague Kazimir suggested that the bank could hike rates at some point by year end. In addition, President Lagarde reiterated that a probable end to the APP in Q3 remains data dependent. In the domestic calendar, final figures saw the EMU Consumer Confidence at -18.7 and the Economic Sentiment at 108.5. Later in the session, all the attention will be on the release of the preliminary figures for the German inflation for the month of March. In the NA session, the final Q4 GDP and the monthly ADP report will take centre stage. What to look for around EUR EUR/USD extends recent gains and advances well north of the 1.1100 mark following renewed downside in the greenback. Pockets of strength in the single currency should appear reinforced by the speculation of the start of the hiking cycle by the ECB at some point by year end, while higher German yields, elevated inflation, the decent pace of the economic recovery and auspicious results from key fundamentals in the region are also supportive of a rebound in the euro.
Short
by FOREXN1
2
GBP/USD:FUNDAMENTAL+TECHNICAL ANALYSIS|POSSIBLE LONG SCENARIO 🔔GBP/USD rebounds from near two-week low, flat-lined below 1.3100 amid risk-on mood GBP/USD witnessed some intraday selling on Tuesday amid renewed USD buying interest. Hawkish Fed expectations, rising US bond yields continued acting as a tailwind for the buck. A positive risk tone capped gains for the safe-haven USD and helped limit losses for the pair. The GBP/USD pair quickly recovered a few pips from a near two-week low touched in the last hour and was last seen trading around the 1.3175-1.3180 region, nearly unchanged for the day. The pair struggled to preserve its modest intraday gains to the 1.3115 region and turned lower for the fifth successive day on Tuesday amid the emergence of fresh US dollar buying. Rising bets for a 50 bps rate hike at the next two FOMC meetings turned out to be a key factor that continued acting as a tailwind for the buck. The market expectations for a more aggressive policy response by the Fed to combat high inflation was reinforced by elevated US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond moved back above the 2.5% threshold, or back closer to a nearly three-year peak and underpinned the greenback. The British pound was further pressured by the overnight dovish sounding remarks by the Bank of England Governor Andrew Bailey, saying that they are seeing evidence of an economic slowdown. Bailey stuck to the tone from this monthly policy decision, wherein officials softened their language on the need for further interest rate hikes. This was seen as another factor that exerted additional pressure on the GBP/USD pair. That said, a generally positive risk tone, bolstered by hopes for progress in the Russia-Ukraine peace talks, capped the safe-haven USD and helped limit the downside for the GBP/USD pair. This, in turn, warrants some caution for bearish traders. Hence, the market focus will remain glued to fresh developments surrounding the Russia-Ukraine saga. The incoming geopolitical headlines will influence the broader market risk sentiment. This, along with the US bond yields, will drive demand for the USD and produce some short-term trading opportunities around the GBP/USD pair. Later during the early North American session, traders will take cues from the US economic docket - featuring the release of JOLTS Job Openings and the Conference Board's Consumer Confidence Index.
Long
by FOREXN1
2