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EURUSD

1. Indices from Wall Street finished Friday's trading lower after Fed Waller noted that progress on inflation has been slow so far and that Fed may have to go with more than one hike before the end of the cycle
2. However, downbeat moods did not extend into a new week. Indices from Asia-Pacific are trading mostly higher today - Nikkei gains 0.1%, S&P/ASX 200 and Kospi add 0.2% while Nifty 50 trades 1% lower. Indices from China traded up to 1.2% higher
3. DAX futures point to a slightly higher opening of the European cash session today
4. Chinese Defence Minister said during his visit to Russia that China aims to have close communication and to strengthen multilateral coordination with Russian military
5. BoJ Governor Ueda said that while inflation situation in Japan is different that in other parts of the world, all options will be discussed at each policy meeting
6. US Treasury Secretary said that tightening in credit standards following banking turmoil could be a substitute for further Fed rate hikes
7. ECB President Lagarde said that path to global economic recovery is narrow but refrained from hinting whether she supports 25 or 50 basis point rate hike in May
8. Cryptocurrencies are trading mostly lower - Bitcoin drops 1.4%, Ethereum and Ripple trade 1.5% lower while Dogecoin slumps 2%
9. Energy commodities trade mixed - oil drops 0.2% while US natural gas prices climb around 2.5%
10. Precious metals trade mixed - gold gains 0.1% while silver and platinum drop 0.1%
11. AUD and CHF are the best performing major currencies while JPY and NZD lag the most

EURUSD lost some ground on Friday after hawkish comments from Fed's Waller. While new week was also launched with a move lower, bulls managed to regain ground and are now trying to push the pair back above 1.10 mark.

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CHNCOMP

Indices from Asia-Pacific gained during the first trading session of a new week. Chinese indices were top-performers with CHNComp gaining over 3% and CH50cash adding 2.4%. Hong Kong shares also performed well with HKComp adding over 2%. There were no specific news behind the jump. However, there was data from China on new home prices for March released over the weekend. While on an annual basis prices were 0.8% YoY lower, month-over-month data showed a 0.5% MoM increase, This was the third monthly increase in a row and the fastest pace of price growth in 21 months. It could be a hint that demand and overall situation in the Chinese property market may be improving.

Indices from China may also see some moves during the next Asian session as some top-tier economic reports from the country are scheduled for release. Monthly activity data for March (industrial production, retail sales and urban investments) as well as Q1 GDP report will be released at 3:00 am BST. Economists expect improvement in monthly readings for March, especially in retail sales and industrial production. Also, Q1 GDP growth is seen reaching 2.2% QoQ, after a lack of growth (0.0% QoQ) in Q4 2022. On an annual basis, Chinese GDP is expected to have grown by 4% YoY in Q1 2023.

Taking a look at CHNComp chart at D1 interval, we can see that the index is making another attempt at breaking above the resistance zone marked with 23.6% retracement in the 7,120 pts area. From a technical point of view, a break above could trigger an upward move towards the 7,850 pts area - above a year-to-date high from late January.

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EURUSD

Bulls are losing momentum this session, while the euro against the dollar pulls back below the 1.10 level. The correction in the U.S indices is supporting the USD’s recovery, however, the pair is currently testing an important support zone. If the price stays above the uptrend line, the bullish scenario could resume again. However, if a breakout of this zone appears, then a further pullback cannot be excluded.

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Oil

OIL.WTI is retreating by almost 2.5% today as a result of several factors. One is the US dollar, which has not been this strong for a long time as a result of rising yields. Another is the US reserve sales of over 1 million barrels last week. This is not much, but it shows that the US may want to stabilize the oil market. Perhaps the most important factor is Russia's powerful exports at levels last seen before the attack on Ukraine. Russia's exports are doing well, primarily to Asian countries, including India, from where fuel in turn flows to Europe in record volumes.

A massive bump in WTI oil. After a test of 80 USD, the upper limit of the upward gap can be expected to be tested.

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AUDJPY

1. US indices finished yesterday's trading slightly higher. S&P 500 gained 0.33%, Dow Jones moved 0.30% higher and Nasdaq added 0.28%. Russell 2000 was an outperformer and rallied 1.22%
2. Downbeat moods could be spotted during the trading in Asia today - Nikkei gained 0.4%, S&P/ASX 200 moved 0.4% lower, Kospi dropped 0.3% and Nifty 50 traded 0.2% lower. Indices from China traded mixed
3. DAX futures point to a slightly higher opening of the European cash session today
4. Chinese GDP growth reached 4.5% YoY in Q1 2023 and was much better than 4.0% YoY expected by analysts. However, on a quarterly basis growth reached 2.2% QoQ and was in-line with expectations
5. Monthly activity data from China for March came in mixed. Chinese retail sales surged 10.6% YoY in March (exp. 8.0% YoY), industrial production increased 3.9% YoY (exp. 4.7% YoY) and urban investments were 5.1% YoY higher (exp. 5.8% YoY)
6. According to RBA minutes, RBA members considered a rate hike at April meeting before ultimately deciding on a pause. Minutes showed that there is a stronger case to pause rates and assess whether there is need for more tightening
7. BoJ Governor Ueda said that buying government debt is part of monetary policy and is not aimed at monetising it
8. Cryptocurrencies are trading slightly higher today - Bitcoin gains 0.4% higher, Ethereum gains 0.6% and Dogecoin jumps 1.3%
9. Energy commodities trade mixed - oil gains 0.3% while US natural gas prices drop over 1% following yesterday's rally
10. Precious metals gain amid USD weakening - gold and silver trade 0.3% higher while platinum adds 0.2%
11. AUD and EUR are the best performing major currencies while USD and JPY lag the most

AUDJPY gains following the release of upbeat Chinese Q1 GDP data. The pair climbed above a downward trendline at the end of the previous week and is continuing to advance towards the 91.00 resistance zone.

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AUDUSD

The Australian dollar is one of the best performing major currencies today. RBA minutes turned out to be neither dovish, nor hawkish. On one hand, the document showed that RBA members considered a rate hike before ultimately deciding on leaving rates unchanged. On the other hand, the document noted that the Bank should reassess whether there is still need to undertake additional tightening. AUD, however, caught a bid following release of better-than-expected GDP data from China. The Chinese economy grew at a pace of 4.5% YoY in Q1 2023, much faster than 4.0% YoY expected by economists. Moreover, retail sales data for March showed a 10.6% YoY jump - also better than the 8.0% YoY increase expected. Industrial production data for March missed estimates but showed higher growth than in February.

Taking a look at AUDUSD chart at D1 interval, we can see that the pair bounced off an important mix of support today - an intersection of 50- and 200-session moving average (orange circle). Demand side reaction to this technical support hints that another upward impulse may be about to start. In such a scenario, resistance zone in the 0.6780 area, marked with 38.2% retracement of October 2022 - January 2023 upward move may be the next target for the bulls.

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EURUSD

Statements by the CEOs of major US banks today sounded 'disinflationary' today. CEO of Bank of America, Moynihan indicated that inflation rates in the US are falling and BofA's CEO, Bortwhick conveyed that the bank is seeing lower mortgage demand. Both of these comments look rather unfavorable for the 'greenback' and may suggest that the Fed will reconsider a possible rate hike in May. But James Bullard, the St.Louis Fed chair known for his hawkish stance, spoke on the situation in the US economy - his comments strengthened the dollar. Nevertheless, EURUSD is rebounding and trying to face a key short-term resistance level.

Fed Bullard

1. Forecasts of a recession in the US ignore the strength of the labor market, and savings from the pandemic still have to be used after all, boosting demand;
2. With little tangible progress on inflation, interest rates must continue to rise;
3. The risk of banking stress causing widespread problems seems to have diminished, but we are still watching the situation closely;
4. The Fed should avoid giving extensive decision guidance at its next meeting and keep all options on the table as possible;
5. I still see an appropriately restrictive interest rate of 5.50%-5.75%. We are leaning toward keeping the rate longer until inflation is brought under control.

EURUSD is trying to stop the declines. However, the short-term resistance line in the form of the SMA200 on the M15 interval may prove crucial. The US Congress is scheduled to vote on the debt ceiling bill next week.

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GBPUSD Gained after higher than expected UK CPI reading!

1. UK CPI (M/M) Mar: 0.8% (est 0.5%; prev 1.1%)
2. UK CPI (Y/Y) Mar: 10.1% (est 9.8%; prev 10.4%)
3. UK CPI Core (M/M) Mar: 0.9% (est 0.6%; prev 1.2%)
4. UK CPI Core (Y/Y) Mar: 6.2% (est 6.0%; prev 6.2%)

Details of today's inflation report. High UK inflation is largely driven by food prices. This is likely to prompt the BoE to make another 25bp hike.
Details of today's inflation report. High UK inflation is largely driven by food prices. This is likely to prompt the BoE to make another 25bp hike.

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EURGBP

The British pound is the best performing currency in the broad FX market at the moment. The EURGBP pair is trading close to 0.35% down today, triggered by a strong UK CPI reading. The UK's March CPI inflation reading came in at 10.1% YoY against a forecast of 9.8% and the previous reading of 10.4%. Core inflation continued unabated and came out at 6.2% against an expected fall to 6.0%. It had previously been 6.2%.

As reported by Reuters, the decline in price pressures in the UK economy is disappointing, raising the prospect of another interest rate hike in the UK. The swaps market is currently pricing in an 80% chance of a 25 basis point hike at a future BoE meeting. Let's remember that the UK has the highest inflation rates among Western European countries and is the only one struggling with double-digit inflation.

UK Finance Minister Jeremy Hunt said Wednesday's data confirms why the government must continue its efforts to bring inflation down.
The EURGBP pair lost ground sharply after raising the odds of the BoE continuing its interest rate hike cycle. The currency pair has drifted below support levels set by exponential moving averages, so a further reaction to these levels could be a key factor creating further movement in the pair.

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Bitcoin Dips Below $30K

On Wednesday in morning trading hours Bitcoin and other cryptocurrencies plummeted below significant levels. Despite a strong decline in prices no fundamental information was released to the public. Drop occurred in 20 minutes and led to the liquidation of over $25 million worth of BTC futures long positions.

BTC fell below $30k level and ETH back below $2000. Long squeeze may be caused by investors digesting Gary Gensler Congressional Hearing, which took place yesterday.
BTC dips and is trading near support level marked with green zone. On MACD indicator a bearish divergence occurred which suggest that bullish momentum is weakening.

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Gold falls back to early April levels!

Currently, the probability for a 25bp hike in May is rated at 88%, but on the other hand, the probability for a hike in June is rated at 29%, so adding up the probability, it is expected that a hike will happen anyway.

From the current market perspective, we are seeing a decidedly stronger dollar, which is gaining along with treasury yields, which are above 3.6% for 10-year treasury yields. In addition to this, the BoJ is hinting that there should be no change in the yield curve management program at its April meeting, which is also propping up the dollar. In response, gold is losing heavily and falling not only below $2,000 per ounce, but already below $1,980 per ounce. Silver, on the other hand, is below $25 per ounce and losing almost 2%.

Gold is falling to its lowest level since early April. The next important support near the 23.6 Fibo retracement at $1950 per ounce.

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Bitcoin

The major cryptocurrency has once again been pushed off the $30,000 level signaling a possible backdrop for a larger correction of the huge upward movement. Should the declines deepen, the 23.6 Fibonacci retracement of the upward wave, which began in November 2022, at $27,400, and the SMA100 (black line), which may overlap with the 38.2 Fibo at the psychological zone of $25,000, may prove to be important levels.
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Oil

The US Energy Information Administration released an official weekly report on US oil inventories at 3:30 pm BST today. API estimates released yesterday in the evening showed crude inventories falling more or less in-line with estimates. However, government report showed quite major deviations from both expectations and yesterday's API releases. Crude oil inventories dropped 4.58 mb - much more than expected. On the other hand, gasoline inventories data showed a surprising 1.3 mb build while distillate inventories dropped much less than expected.

EIA report on US oil inventories

1. Oil inventories: -4.58 mb vs -2.5 mb (API: -2.67 mb)
2. Gasoline inventories: +1.3 mb vs -1.9 mb (API: -1.0 mb)
3. Distillate inventories: -0.35 mb vs -1.8 mb (API: -1.9 mb)

Oil is trading slightly higher following the release. However, scale of the move did not exceed 0.3% and does not change much in the overall technical picture. Taking a look at OIL.WTI at D1 interval, we can see that price dropped below $80 mark today and even briefly moved into territory of a bullish price gap that was triggered by the most recent OPEC cuts.

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NZDUSD

The New Zealand dollar has been one of the worst performing major currencies today. The sell-off was primarily caused by the inflation report, which showed that price growth in the economy is slowing much faster than expected. The quarterly data showed that inflation on a QoQ basis came in at 1.2% against forecasts of 1.7% and an earlier reading of 1.4%. In YoY terms, inflation came in at 6.7% against expectations of 7.1% and an earlier reading of 7.2%.

The swap market is currently pricing in a near 78% chance of a 25 basis point interest rate hike at the next RBNZ meeting. As recently as this morning, those odds were close to 85%, so the surprise inflation reading has lowered the prediction for a further hike. The RBNZ had forecast Q1 inflation at an annualized rate of 7.3%, slowing to 6.6% in Q2. As such, today's reading of 6.7% for Q1 goes a long way to putting the brakes on further aggression in the tightening cycle.

Looking at the NZDUSD price chart, we can see that the pair has broken out below the support zone set by the April 17 low and is currently trading near the levels outlined by the 38.2% Fibo retracement of the upward wave started in October 2022. For the moment, the key support and resistance levels are: (support) the zone between the previously mentioned 38.2 retracement and the 50% Fibo measure; (resistance) the downward trendline initiated in February 2023.

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DE30

The German leading index is coming under increasing pressure.

W1 chart
The DAX future / DE30 is falling today, pulling back from the high for the year, which was reached yesterday at 16,056 points. The record high remains the key resistance - the gap is around 400 points. In case of further losses, the breakout level at 15,698 points and the intermediate high at 15,463 points could be targeted.

The German leading index is coming under increasing pressure.

M15 chart
The DAX future / DE30 slipped below the low at 15,901 points, falling to its lowest level in six days. The technical situation has deteriorated in pre-market trading today - see crossover and lower lows and lower highs. With no sign of life from the bulls, the index remains vulnerable to further losses.

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OIL.WTI is pulling back and looks to close bullish price gap

Oil prices are pulling back and are one their way to close the bullish price gap that was triggered by unexpected OPEC+ decision to cut output. Taking a look at WTI (OIL.WTI) at D1 interval, we can see that the recent price advance was halted near the $82 resistance zone, marked with the upper limit of the Overbalance structure. While prices have traded briefly above this hurdle, bulls failed to uphold momentum and a pullback was launched. Moreover, the price dropped below the 100-season moving average today, which further brightens the outlook for bears. While lower limit of the bullish price gap from April 3 is still more than 2% below current market price, it looks like closing it may be just a matter of time, given current market volatility.

Taking a look at the chart at lower interval (H1), we can see that WTI is trading in a short-term downtrend. Key resistance to watch in the near-term can be found in the $78.35 area. Unless we see a break above this level, bulls may struggle to launch a longer-lasting upward impulse.



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Palladium pulls back from 2-months high and drops below $1,600

PALLADIUM is the worst performing precious metal today, dropping around 2.5% at press time and moving further away from a recent 2-month high. Palladium is a clear outlier among precious metals today as USD weakening allows gold to rise 0.6% and platinum to add 0.2%. Silver is trading flat. While gold and silver, and to a lesser extent platinum, are driven primarily by the investment demand, palladium is more reactive to industrial developments. Today's drop may be to some extent driven by poor performance of EV stocks, especially Tesla as it slumps 10% following a lackluster Q1 2023 earnings report.

Taking a look at PALLADIUM at D1 interval, we can see that the price is pulling back after a failed attempt at breaking above the $1650 resistance zone. Downward move accelerated today with price dropping below the $1600 mark. The near-term support can be found ranging above the $1,500 mark and served as the upper limit of a previous short-term trading range.

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EURUSD

Flash PMI indices for April from France and Germany were released at 8:15 am BST and 8:30 am BST, respectively.

French reading was mixed - services index showed a big and unexpected improvement while the manufacturing sector showed large and also unexpected deterioration. Deterioration in manufacturing, which reached 35-month low, can be explained with massive employee strikes that are occuring in France in response to new pension reform. Improvement in services is puzzling but we will have to wait for the final release for details.

German reading was mixed on the same note - miss in manufacturing and beat in services. However, in case of German data, strikes cannot be used as an explanation so we will have to wait for final data with sector/industry breakdown.

France

1. Manufacturing: 45.5 vs 47.9 expected (47.3 previously)
2. Services: 56.3 vs 53.5 expected (53.9 previously)

Germany

1. Manufacturing: 44.0 vs 45.6 expected (44.7 previously)
2. Services: 55.7 vs 53.3 expected (53.7 previously)

EUR ticked higher following the release of French data but the move was minimal. Indices also moved higher in a knee-jerk move but have later turned lower. Those moves were magnified after German release with EURUSD adding to previous gains and DE30 deepening slide.

DE30 deepens drop below 15,900 pts price zone after mixed PMIs from France and Germany.

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Chart of the Day - EURUSD

EURUSD is pulling back this morning. The move lower is driven mostly by strengthening of the US dollar. The main currency pair tried to recover some losses after the release of mixed PMIs for France and Germany that showed major improvement in the services sector and significant deterioration in manufacturing. While flash PMIs failed to trigger a strong recovery move, they seem to have been enough to halt declines.

Taking a look at EURUSD at the H1 interval, we can see that the pair dropped to the 1.0940 area, where the short-term upward trendline can be found. Bulls managed to defend this price zone and now we can see the pair trying to climb back above 1.0950. From a technical point of view, this is a bullish development but whether this translates into a large upward impulse will depend on whether bulls manage to break above the 1.0980 resistance zone that has been limiting upward moves this week. Should such a break occur, EUR bulls may target recent highs in the 1.1070 area next.

The pair may see some volatility around 2:45 pm BST when flash PMIs from the United States for April are released. Market expects a small deterioration in both manufacturing and services.

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Oil

1. Indices from Asia-Pacific traded lower at the beginning of a new week. Nikkei, S&P/ASX 200 and Nifty 50 traded flat, Kospi dropped 0.9% and indices from China traded 0.3-1.3% lower
2. DAX futures and S&P 500 futures trade slightly lower
3. Russia warned that it will terminate Black Sea grain deal if G7 moves to impose a total ban on exports
4. BoJ Governor Ueda said that inflation forecasts strong and close to 2% for bank to consider changing its yield curve control mechanism
5. Financial Times reports that United States asked South Korea not to increase chip sales to China if chips of US company Micron get banned as part of Chinese investigation
6. Cryptocurrencies traded mostly sideways over the weekend. Small gains can be seen today - Bitcoin gains 0.8%, Ethereum adds 0.3% and Dogecoin jumps 1.2%
7. USD and CHF are the best performing major currencies while AUD and JPY lag the most
8. Precious metals pull back amid USD strengthening. Gold drops 0.2%, silver trades 0.7% lower and platinum plunges 2.3%
9. Energy commodities trade lower as well - oil drops 1.2% while US natural gas prices decline 0.5%

Brent (OIL) is inches away from closing a bearish price gap triggered by an unexpected OPEC+ output cut.

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