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EURUSD

EMU inflation data for April:

1. Harmonised Index of Consumer Prices YoY: 7.0% versus 6.9% expected and 6.9% previously
2. Core Harmonised Index of Consumer PricesYoY: 5.6% versus 5.6% expected and 5.7% previously

Eurozone inflation is still high and above ECB target. This puts the ECB in a difficult position regarding tightening cycle. Today's PMI data showed that most EU economies are currently in contraction (PMI less than 50).

At the moment, the euro is being weighed down by negative market sentiment coming from HICP and PMI data. EURUSD is facing downward pressure as sellers dominate the market. This is a result of the currency being rejected from the year-to-date high levels, which occured near 1.10940 levels in the last week. Since then EURUSD has remained in a bearish mode.

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DE30

On Wednesday, German Index DAX opened higher after a long weekend due to the Labor Day on Monday. Today's stock market session in Europe brought a continuation of the uptrend. The German DAX (DE30) started strongly after the opening bell and set new highs for this year. However, the momentum did not last long, and a few minutes after the session started, profit-taking occurred, resulting in the DE30 being traded in negative territory.

From the technical analysis point of view, on the chart a false breakout above the consolidation level occurred. After DE30 dropped below the zone around 16,060 points, the decline accelerated and the price touched the EMA100 moving average, where the bulls came into play. If the moving average is defended and a hammer formation appears on the H1 chart, there is a possibility of a retest of resistance levels around 16,060 points. On the other hand, if the formation is invalidated and the price drops below the moving average, a further decline towards last week's lows around 15,830 points cannot be ruled out.

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GBPCHF All set to fall

GBPCHF is currently at 1.1198 in a range and looking for a breakout of slope support. We are in the start of a channel, and we are looking for a continuation to the 1.000 Fibo at 1.1149 with a further target the ATR target at the 1.1125 area.

Watch the USDX for direction. The average daily true range (ATR) for the pair is 69 pips per day and it’s 180 day average is 82 pips per day. USDX is currently moving up but at a range top-watch for it to short.

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Gold confirms the breach

Gold prices confirmed breaching the symmetrical triangle’s resistance line and settled with a daily close above it, to resume the main bullish track and head towards achieving positive targets that start by testing the recently recorded high at 2048.70, supported by moving above the EMA50.

Therefore, we are waiting for more expected rise in the upcoming sessions, and the price needs to hold above 1992.20 to guarantee the continuation of the bullish wave, as breaking this level will press on the price to return to the correctional bearish trend again and open the way to visit 1957.30 areas on the near term basis.

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USDCAD

Despite natural gas price sideways fluctuation between 1.950 support and 2.500 resistance, the major indicators provide the negative momentum again, to increase the chances of renewing the negative attempts in the near term and medium term period.

Succeeding to break 1.950 support line will open the way to form new bearish waves to target the historical support at 1.4800 followed by reaching the psychological support at 1.

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Oil

1. Major Asian stock indexes ended the session lower after yesterday's slump on Wall Street.
2. Chinese and Japanese markets were closed today for holidays.
3. Retail sales data from Australia came in slightly better than expected. March retail sales came in at 0.4% on a monthly basis, against expectations of 0.3% month-on-month and the previous reading of 0.2% month-on-month.
4. The Reserve Bank of New Zealand released its latest Financial Stability Report today.
5. Governor Adrian Orr says that New Zealand’s financial system is well placed to handle the higher interest rate environment and international financial disruption.
6. New Zealand's labor market report for Q1 showed the addition of new jobs and a lower-than-expected unemployment rate.
7. Data from NZ, combined with the RBNZ's lack of stability concerns, increase the chances of a RBNZ rate hike at its next meeting. That is scheduled for May 24.
8. NZD/USD rose on the session to highs just above 0.6250.
9. Bank of Korea Governor Rhee spoke in an interview saying, amongst other points, that it’s a little bit premature to talk about a policy pivot.
10. Across major FX the USD lost ground against a higher JPY, CHF, EUR and GBP. AUD and CAD lagged.
11. Investors are awaiting a decision on interest rates in the US.
12. In addition to the Fed decision, today will see the release of the ADP report and the ISM index for services, as well as data on US oil inventories.

Crude oil scored a weak session yesterday. OIL.WTI quotes are on track to test support at the round $70 level.

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Gold - Chart of the Day

GOLD managed to break the key resistance at 2010.5$ during yesterday's session, and left the local consolidation, which was related to the rebound on EURUSD. Earlier, the price of this precious metal reacted several times to the support at $1972, which resulted from the lower limit of the 1:1 structure. According to the Overbalance methodology, the upward trend is in force, and breaking the aforementioned resistance at 2010.5$, may open the way for an attack on the recent highs at 2048$. This evening, due to the FOMC decision, volatility on the USD should be elevated, and consequently we should see bigger movements on gold as well.

The decision should not come as a surprise because the market has long been considering the scenario of a 25 basis point hike and keeping the option of another hike in June. Nevertheless, investors will focus on the Fed announcement and the further trajectory of monetary policy. The key question is whether any interest rate cuts are being considered this year.

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Gold

Gold prices rallied upwards sharply by today’s open, as the prices are affected by the FOMC rate hike, to surpass our waited target at 2048.70 and record new historical high at 2080, to hint the continuation of the bullish trend domination on the short term and medium term basis, but we notice that the price declines quickly to settle below 2048.70, which makes us prefer to stay aside until the price confirms its situation according to this level followed by detecting its next destination clearly.

The contradiction between the technical indicators provides another reason for neutrality, as stochastic shows clear negative signals now, while the EMA50 provides the continuous positive support to the price. Note that breaching 2048.7 and holding above it will lead the price to resume the bullish wave and achieve positive targets that reach 2098, while consolidating below it will press on the price to achieve intraday bearish corrections that target testing 2017 areas initially.

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GBPUSD touches the target

The GBPUSD pair continued to rise yesterday to succeed touching 1.2580 level, noticing that the price begins today with new rise to attempt to confirm breaching this level, to continue suggesting the bullish trend for the upcoming period, reminding you that our next station is located at 1.2650.

The bullish channels continue to organize the suggested bullish wave, which gets continuous support by the EMA50, noting that holding above 1.2510 is important to achieve the waited targets, as breaking it will press on the price to achieve some intraday bearish correction before turning back to rise again.


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Oil


Oil prices, including Brent and WTI, dropped more than 5% after yesterday’s FED meeting regarding interest rates. Oil.WTI dropped below $69 - the lowest level since March 24, 2023. Prices fell from $71.5 per barrel to as low as $63.6 per barrel. However, prices have rebounded slightly from lows. Higher volatility was caused by rising concerns about the global economy and demand. The re-emergence of US banking problems and OPEC+'s unwillingness to intervene are also contributing factors. The collapse of First Republic Bank has increased the risk of recession in the United States and China's post-COVID demand recovery is slower than expected. The oil producers' calendar remains unchanged, with the next meeting scheduled for June.

Looking at the technical analysis of OIL.WTI on the H4 interval, after midnight the downward trend intensified and a tests of the lows from March occurred at $63.6 per barrel. However, the price decrease was temporary and bulls responded immediately at the support level resulting in a pro-growth hammer formation on the chart. If the upward trend continues, attention should be paid to two resistance levels. The first, at $71.30 is derived from measuring the 38.2% Fibonacci retracement of the last downward wave. The second resistance level is around $74 and set at the previous local lows and the next Fibonacci retracement - 50%. On the other hand, If the bearish sentiment extends, the support level should be at $66.30, which is the upper limit of the 1:1 formation breakout.

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DE 30 Vulnerable to further losses

The DAX futures / DE30 is pulling back from the yearly high this week and testing the previous week's low.

W1 chart

The horizontal trend line at 15,816 points seems to be holding. This offers the chance for a recovery - as in the past two weeks. A break to the downside could in turn mean targeting the breakout level at 15,698 points - then later the interim high at 15,463 points.

M15 chart

The sell-off has been stopped. However, this does not change the downward trend structure. As long as the DAX does not have higher highs and higher lows above the moving averages and a change in direction is confirmed by a crossover, the index is vulnerable to further losses.


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USDCAD

As is usually the case for the first Friday of a new month, traders will be offered jobs data from the United States and Canada. Both reports will be released at 1:30 pm BST today, meaning that USDCAD is likely to experience a jump in short-term volatility around that hour.

Of course, the US report will draw more attention. The NFP report for April is expected to show an employment gain of 180k as well as an uptick in the unemployment rate to 3.6%. Wages are expected to increase 0.3% MoM but on an annual basis wage growth is seen staying unchanged at 4.2% YoY. Labour market data has been quite solid as of late and yet it did not discourage Fed from hinting that a pause in rate hike cycle is coming at the next meeting in June. Having said that, the impact of potential NFP beat today may be more short-term and won't alter rate expectations. When it comes to Canadian data, employment is expected to have increased by 21.5k jobs in April while the unemployment rate also ticked higher, from 5.0 to 5.1%.

Taking a look at USDCAD chart at D1 interval, we can see that the pair has been trading sideways recently. An attempt to break above the 1.3675 resistance zone was made at the turn of April and May but bulls failed to push the pair above it. Pair started to pull back and is now testing and support zone ranging around 1.35 handle and marked with 200-session moving average (purple line), previous price reactions as well as 23.6% retracement of the upward move launched in June 2021.

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EURUSD leans on the moving average

EURUSD pair tested the EMA50 that formed good support at 1.1010 and kept its stability above it, to start today positively and attempts to resume the main bullish trend, noticing that stochastic provides clear positive signals now, waiting to motive the price to provide more positive trades in the upcoming sessions, waiting to breach 1.1075 to confirm rallying towards 1.1150 as a next target.

Therefore, we will continue to suggest the bullish trend on the intraday and short term basis, noting that breaking 1.1010 will stop the positive scenario and put the price under additional negative pressure to head towards visiting 1.0945 level before any new attempt to rise.

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EURJPY

Beginning of a new week on the markets has been calm so far. Worse than expected German industrial production reading for March did not have much impact on EUR or European indices. German industrial output dropped 3.4% MoM, missing -1.3% MoM estimate quite significantly. One more piece of data from Europe will be released today - Sentix index for May at 9:30 pm BST. However, it is unlikely to trigger major moves on the EUR market as well. Speech from ECB Lane at 3:00 pm BST may trigger some short-term volatility. We also had release of Bank of Japan minutes during the Asian session but it turned out to be a non-event as it related to early-March meeting which was still chaired by Kuroda.

Taking a look at EURJPY at D1 interval, we can see that the pair has managed to halt recent correction at 147.50 support zone and is now trying to recover back to recent highs in the 151.00 area. A move above 149.00 mark was made today. Should the upward move continue and the pair breaks above the 151.00 area, a test of the upper limit of the upward channel, currently in the 153.20 area, cannot be ruled out in the near-term.

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EURUSD is Recovering

The EURUSD pair’s decline stopped at 1.0966 level, to rebound bullishly and settle above the EMA50, to head towards recovering and resume the main bullish wave again, on its way to test 1.1075 level as a first station, noting that breaching this level will extend the bullish wave to reach 1.1150 areas as a next target.
Therefore, we expect to witness more bullish bias in the upcoming sessions, and the price needs to consolidate above 1.1010 to continue the suggested rise, as breaking it will put the price under new negative pressure to head towards visiting 1.0945 level initially.

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NZDUSD

The NZDUSD pair shows more bullish bias to move away from 0.6290, which supports the continuation of the bullish wave for the rest of the day, and the way is open to achieve our next target at 0.6380, supported by the EMA50 that carries the price from below, noting that holding above 0.6290 is important to achieve these targets.

The expected trading range for today is between 0.6260 support and 0.6370 resistance.

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EURJPY holds below the barrier

EURJPY pair approached 149.35 barrier yesterday, while the lack of the positive momentum forced it to provide new negative close to confirm its affection by the bearish bias for now, noticing its crawl towards 148.35.

We expect to renew the negative attempts to target the first station at 147.50, reminding you that breaking this level might force it to suffer additional losses that might extend towards 146.60 followed by reaching 145.65 support line.

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GBPUSD presses on the channel’s support line

GBPUSD pair ended yesterday negatively, to test the intraday bullish channel’s support line, noticing that the price begins today with slight decline to move below this support, while stochastic reaches the oversold areas now, to form positive motive that we are waiting to assist to push the price to resume the main bullish wave and head to achieve gains that reach 1.2850.

Therefore, the overall bullish trend will remain valid for the upcoming period, supported by the EMA50, and the price needs to breach 1.2625 to confirm resuming the bullish track, noting that failing to achieve the required breach will push the price to achieve additional decline that its next target reaches 1.2550.

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USDCAD approaches the extended target

USDCAD pair continued to decline yesterday to approach 1.3300 level, but it bounced bullishly to settle above 1.3350, noticing that stochastic lost its positive momentum to reach the overbought areas now, which forms negative motive that we expect to push the price to resume the negative trades and head to achieve additional negative targets that reach 1.3265.

Therefore, we will continue to suggest the bearish trend for the upcoming period, noting that breaching 1.3385 will stop the negative scenario and lead the price to start correctional bullish wave on the intraday basis.

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Gold

Gold price continues its bullish trend trajectory on Tuesday. The price of gold is currently trading around $2,030 per ounce, which is a +0.41% daily change. The upward trend channel has provided continuous positive support to gold prices - marked with dark blue parallel lines.

The stochastic indicator is beginning to gather positive momentum, indicating a potential upward movement in the price of gold. The resistance level near the range of $2,060-2,070, marked with a green line, has been tested multiple times, suggesting a strong price action and weakening resistance.
Based on these factors, it is probable that the Gold price continues to rise in the upcoming days. The first positive target is expected to be around $2,049. A break of this level could push the price above $2,068 as the next target. However, a break below the support level of $2,000 would be considered as a negative factor and could initiate a bearish correction wave. In such a scenario, the next support line is in the range of $1,960-1,970. The overall structure is bullish for gold.

Traders and investors should monitor the price action around these key levels and wait for confirmation of a breakout or reversal before making trading decisions. Technical indicators and additional market analysis could provide further insights into the potential direction of gold prices.

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