USD/CAD Price Analysis – April 30, 2024
Daily Price Outlook
During the European trading session, the USD/CAD currency pair maintained its upward rally and remained well-bid around the 1.3683 level, hitting the intra-day high of 1.3701. The reason for its upward trend could be attributed to the renewed strength of the US Dollar (USD), which provided some support to the pair. However, the US dollar gained traction in the wake of growing acceptance that the Federal Reserve (Fed) will keep rates higher for longer.
Meanwhile, the decline in oil prices was seen as another key factor that kept the USD/CAD pair higher as the Canadian dollar (Loonie) is negatively affected by falling oil prices. Canada's economy relies heavily on oil exports, leading to decreased demand for the currency.
Moving ahead, Investors will keep an eye on the Canadian February Gross Domestic Product (GDP) growth number. The attention will shift to the Federal Open Market Committee's (FOMC) interest rate decision on Wednesday.
Expectation of Higher US Interest Rates Boosts USD/CAD Pair
On the US front, the US dollar gained strength as investors expect the Federal Reserve to keep interest rates high due to ongoing inflation. Fed officials, like Michelle Bowman and Neel Kashkari, don't see the need to lower rates and even suggest the possibility of no rate cuts this year. Some, like Raphael Bostic, might even consider raising rates if inflation worsens. This expectation of higher rates supports the USD, benefiting the USD/CAD pair.
The upcoming FOMC meeting is expected to maintain current rates, with investors watching for any hawkish signals in the statement and press conference, which could strengthen the US dollar further.
Therefore, the expectation of higher US interest rates due to inflation has strengthened the US dollar, benefiting the USD/CAD pair. This trend may continue if the FOMC maintains a hawkish stance.
Bank of Canada Policy Rate and Oil Prices: Impact on USD/CAD
On the Canadian front, traders anticipate that the Bank of Canada (BoC) will likely wait until June or July before considering any cuts to its policy rate. The upcoming February Gross Domestic Product (GDP) data could provide insights into the Canadian economy's performance.
If the report indicates weaker-than-expected data, the BoC might be prompted to consider interest rate cuts sooner, which could weigh on the Canadian dollar (CAD). On the flip side, if the report indicates stronger-than-expected data, the BoC may delay potential interest rate cuts, which could support the Canadian dollar (CAD).
Another factor that has been boosting the USD/CAD pair is the continued decline in oil prices. Canada's economy relies heavily on oil exports, leading to decreased demand for the currency and contributing to the USD/CAD pair's gains.
USD/CAD - Technical Analysis
On April 30, the USD/CAD traded slightly higher at 1.36811, marking an increase of 0.15%. This uptick reflects subtle shifts in market sentiment as traders respond to evolving economic indicators and geopolitical events. The currency pair now hovers just below its critical pivot point at 1.3756, indicating potential volatility in the near term.
The USD/CAD faces immediate resistance at 1.3735, with subsequent thresholds at 1.3788 and 1.3861 that could limit upward movement. Should the pair break through these barriers, it may signal strengthening momentum for the U.S. dollar against the Canadian dollar, influenced by diverging economic policies or shifts in commodity prices, particularly oil, a significant export for Canada. Conversely, the support levels are established at 1.3614, 1.3562, and 1.3516. A decline below these points could suggest growing bearish pressure, potentially due to stronger Canadian economic performance or higher crude oil prices.
Technical indicators such as the Relative Strength Index (RSI) at 52 and the 50-Day Exponential Moving Average (EMA) at 1.3701 offer additional insights. The RSI indicates a neutral momentum, suggesting that the pair is neither overbought nor oversold, while the EMA provides a benchmark for the currency’s current resistance level.
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AUD/USD Price Analysis – April 30, 2024
Daily Price Outlook
Despite the risk-on market sentiment, the AUD/USD currency pair failed to gain any positive traction and remained under pressure around 0.6532, hitting the intraday low of 0.6514 level. However, the downticks in the AUD/USD pair were driven by the release of softer Retail Sales data on Tuesday. The pair lost traction right after the release of lower-than-expected domestic Retail Sales data as weak retail sales suggest subdued consumer spending and slower economic growth, leading the Reserve Bank of Australia to maintain or even lower interest rates to stimulate economic activity, a dovish stance.
Moreover, the broad-based US dollar gained bullish traction on the back of expectations that the Federal Reserve will maintain higher interest rates due to persistent inflation. This bullish US dollar was seen as another key factor that kept the AUD/USD currency pair lower.
Australian Retail Sales Data and Chinese Economic Indicators: Impact on AUD/USD Pair
On the data front, Australian Retail Sales dropped by 0.4% in March, missing expectations for a 0.2% increase and reversing the previous month's 0.3% growth. This disappointed investors, leading to a decline in the Australian Dollar. However, the Australian Dollar might recover as recent inflation data exceeded expectations, hinting that the RBA could postpone rate cuts. Commonwealth Bank also revised its forecast, now expecting the first rate cut in November instead of earlier, which could support the Aussie.
Thus, the decline in Australian Retail Sales pressured the AUD/USD pair initially, but positive inflation data and revised rate cut forecasts from Commonwealth Bank may support the Aussie in the near term.
On the China front, the NBS Manufacturing Purchasing Managers Index (PMI) fell to 50.4, down from 50.8, though slightly better than expected. The Non-manufacturing PMI also dropped to 51.2, matching expectations. The IMF's recent report predicts a slowdown in China's economic growth, forecasting rates of 5.2% in 2023, 4.6% in 2024, and 4.1% in 2025.
Hence, the weaker Chinese economic data and IMF's growth forecast could weigh on the AUD/USD pair due to Australia's export reliance on China, potentially leading to reduced demand for the Australian Dollar.
Impact of Hawkish Fed Comments on AUD/USD Pair
On the US front, the broad-based US dollar has been gaining momentum due to hawkish comments from US Federal Reserve officials, suggesting no immediate rate cuts. The CME FedWatch Tool shows an 88.4% probability of the Fed maintaining interest rates in June, up from 83.5% last week. This stance of higher rates for a longer period is bolstering the US Dollar and posing a challenge for the AUD/USD pair.
Fed Chair Jerome Powell stated that it could take longer than expected to reach the 2% inflation target, indicating a prolonged high-rate environment. Fed officials like Michelle Bowman and Neel Kashkari have also hinted at potential upside inflation risks and the possibility of no rate cuts this year, respectively.
Therefore, the strengthening US dollar, fueled by hawkish Fed comments and increased probability of unchanged rates, poses challenges for the AUD/USD pair, with prolonged high-rate expectations and potential inflation risks influencing market sentiment.
AUD/USD - Technical Analysis
On April 30, the Australian Dollar (AUD/USD) closed at $0.65315, marking a decline of 0.49%. This downturn reflects a broader trend of caution in the forex markets, influenced by economic uncertainties and fluctuating risk appetites globally. Trading below the pivotal point of $0.65689, the AUD/USD is situated in a precarious position, suggesting potential further weakness. Resistance is set at higher thresholds of $0.66054, $0.66434, and $0.66878, which need to be surpassed to signal a shift towards a bullish outlook. Conversely, support levels are firmly established at $0.64849, $0.64425, and $0.64103, providing potential stopping points for further declines.
The currency pair’s technical indicators provide additional insight into its current dynamics. The 50-Day Exponential Moving Average (EMA), at $0.64853, lies just below the current trading price, indicating a near support zone that could stabilize further price drops. The Relative Strength Index (RSI) at 51 suggests a neutral momentum, pointing neither to overbought nor oversold conditions, which indicates that the currency could sway in either direction based on upcoming economic data and market sentiment.
Entry Price: Sell below $0.65598 if the AUD/USD continues to show weakness. Take Profit: Target a take profit at $0.65034 to capture potential downward movement. Stop Loss: Set a stop loss at $0.66054 to limit risks against unexpected bullish reversals.
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- GOLD Price Analysis – April 30, 2024
GOLD Price Analysis – April 30, 2024
Daily Price Outlook
Gold price (XAU/USD) was unable to prolong its previous day's upward rally and turned bearish around the $2,312.22 level, hitting an intraday low of $2,311.55. However, the downward rally was driven by multiple factors including a bullish US dollar and risk-on market sentiment, which undermined the safe-haven gold price as investors preferred to invest in riskier assets due to upbeat market sentiment. Meanwhile, the bullish US dollar, backed by the growing acceptance that the Federal Reserve (Fed) will keep rates higher for longer, was seen as another key factor that kept the gold price lower.
Impact of US Dollar Strength and Fed Expectations on Gold Prices
On the US front, the broad-based US dollar regained its traction, bouncing back from a two-week low amid expectations that the Federal Reserve will maintain higher interest rates due to persistent inflation. Moving on, the upcoming US Nonfarm Payrolls report is expected to provide insights into the Federal Reserve's future interest rate decisions. This could impact the demand for the US dollar and influence the short-term direction of gold prices.
Furthermore, the release of the US Personal Consumption Expenditures (PCE) Price Index highlighted ongoing inflation concerns, reinforcing expectations that the Fed may delay rate cuts until September. The Federal Reserve's upcoming policy announcement, along with the jobs data released on Friday, will provide clues about their future decisions on monetary policy.
Investors will also keep an eye on Tuesday's US economic indicators, including the Chicago PMI and the Consumer Confidence Index, for further market cues.
Impact of Easing Middle East Tensions on Gold Prices
On the geopolitical front, the easing tensions in the Middle East, particularly between Iran and Israel, are leading to a shift in investor sentiment away from safe-haven assets like gold. However, the recent optimism surrounding peace talks between Israel and Hamas in Cairo, coupled with diminishing fears of further escalation, is bolstering global risk sentiment.
Therefore, the easing tensions in the Middle East and improving geopolitical stability are causing investors to move away from safe-haven assets like gold, leading to an increase in selling pressure and a downward impact on gold prices.
GOLD (XAU/USD) - Technical Analysis
On April 30, gold prices settled at $2,329.48, marking a decline of 0.40%. This adjustment places gold just below the pivotal $2,345 mark, suggesting a tepid sentiment among traders as they navigate through various macroeconomic indicators and market dynamics.
The metal faces immediate resistance at $2,361, with further barriers at $2,383 and $2,403. Should gold manage a breakout above these levels, it could signal renewed investor confidence, potentially driven by macroeconomic uncertainties or shifts in the investment climate. Conversely, the support levels are set at $2,314, $2,291, and $2,268. A breach below these could indicate increasing bearish pressure, possibly influenced by a stronger U.S. dollar or rising real yields.
The 50-Day Exponential Moving Average (EMA) at $2,344 nearly coincides with the current pivot point, underscoring a crucial technical juncture. The Relative Strength Index (RSI) stands at 46, hinting at a lack of strong momentum in either direction but leaning towards bearish territory.
Trading Strategy:
- Given the current technical setup, the strategy would involve a cautious approach:
- Entry Price: Consider initiating a sell position if gold falls below $2,335.
- Take Profit: Set the profit target at $2,314 to capitalize on potential downward moves.
- Stop Loss: Place a stop loss at $2,350 to manage risk effectively.
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EUR/USD Price Analysis – April 29, 2024
Daily Price Outlook
The EUR/USD pair has maintained its upward rally and remained well-bid around the 1.0715 level, hitting the intraday high of 1.0734. However, this positive performance was driven by the weakening US dollar, which failed to gain traction despite the Fed's hawkish stance amid a risk-on market sentiment. Meanwhile, investors await key economic indicators from the Eurozone, which make investors hesitate to place a strong bid.
US Dollar Weighed Down by Economic Uncertainty, Supporting EUR/USD Pair
On the other hand, the broad-based US dollar remains under pressure due to uncertainty surrounding the US economic outlook. However, weak preliminary US economic indicators, such as the S&P Global Purchasing Managers’ Index survey for April and Q1 GDP data, have raised concerns about the economy's ability to withstand higher interest rates by the US Federal Reserve (Fed). The uncertainty surrounding the US economic outlook has kept the US Dollar under pressure.
Hence, the weak economic indicators raise concerns about the economy's resilience against potential interest rate hikes, benefiting the EUR/USD pair.
Eurozone Economic Data and ECB Speculation Impacting EUR/USD Pair
Looking forward, the upcoming release of key economic data from the Eurozone, including the preliminary Eurozone Q1 Gross Domestic Product (GDP) and the Consumer Price Index (CPI) data for April, is expected to influence speculation about interest rate cuts by the European Central Bank (ECB). However, investors increasingly anticipate that the European Central Bank (ECB) will begin reducing interest rates at its June meeting, as policymakers consider this action to be sensible.
Therefore, the anticipation of interest rate cuts by the ECB based on upcoming economic data may weaken the Euro against the US Dollar as investors adjust their positions in response to potential policy changes.
EUR/USD - Technical Analysis
Today, the EUR/USD pair has shown notable strength, registering a gain of 0.35%, and trading at 1.07288. This upward movement comes as the currency pair tests key technical levels on a 4-hour chart. Currently, EUR/USD hovers slightly above the pivot point of 1.07082, suggesting a possible continuation of the bullish trend if it maintains this momentum.
If the pair sustains above the pivot point, the immediate resistance at 1.07534 could be the next target. Breaching this level might open the path towards higher resistance levels at 1.07777 and 1.08088. Conversely, if the pair reverses its gains, it could find support at 1.06783. Further declines might test subsequent support levels at 1.06431 and 1.06090, marking critical zones that could halt a downward trajectory.
The technical indicators reinforce the bullish outlook, with the Relative Strength Index (RSI) at 57 indicating a slight bullish momentum without venturing into overbought territory. The 50-Day Exponential Moving Average (EMA) sits just below the current price at 1.07043, further supporting the potential for upward movement.
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GBP/USD Price Analysis – April 29, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair has been maintaining a positive trend and remained well bid around 1.2538, hitting the intraday high of 1.2549 level. However, the reason for its upward rally can be attributed to the weaker US Dollar, which lost its traction on the back of risk-on market sentiment. Investors are closely eyeing the upcoming Federal Open Market Committee (FOMC) interest rate decision and press conference scheduled for Wednesday.
Although, the losses in the US dollar could be short-lived as the US Federal Reserve (Fed) is widely expected to maintain the interest rate within its current range of 0.25%–0.5% during this week's meeting. Despite the strength of the US economy and the recent uptick in inflation, speculations suggest that the first rate cut might not occur until September.
US Dollar Weakness and Fed's Hawkish Stance:
Despite the Federal Reserve's hawkish stance on interest rates, the US Dollar is witnessing a decline and remains subdued amid positive market sentiment. Investors anticipate the Fed to maintain rates steady between 5.25% and 5.5%. Although the US economy exhibits strength, concerns over rising inflation have delayed expectations for rate cuts until September. Recent data from the US Bureau of Economic Analysis, showing a higher-than-expected increase in the Core PCE Price Index, further bolstered the Fed's hawkish expectations.
On the data front, the US Bureau of Economic Analysis reported on Friday that the Personal Consumption Expenditures (PCE) Price Index rose 0.3% in March, exceeding expectations for a reading of 2.6%. The yearly rate also climbed to 2.7% from 2.5% in February. Meanwhile, the core PCE Price Index, which excludes volatile food and energy prices, remained steady at 2.8%, higher than the anticipated 2.6%. These results reinforced the Federal Reserve's hawkish expectations and helps US dollar to limit its losses.
BoE Expected Rate Cuts and Impact on GBP/USD:
On the UK front, investors are starting to believe that the Bank of England (BoE) might lower interest rates at its June meeting. BoE Governor Andrew Bailey hinted that two or three rate cuts this year could happen, which made people think this way. If the BoE decides to cut rates, it could make the Pound Sterling weaker. However, the dovish shift in BoE's monetary policy stance could weaken the Pound Sterling (GBP) and cap further gains in the GBP/USD pair.
GBP/USD - Technical Analysis
In today’s trading session, the GBP/USD pair has appreciated notably, climbing by 0.43% to reach a current level of 1.25423. This movement places the currency pair just above a pivotal technical juncture observed on the 4-hour chart.
The pivot point for today is established at 1.25151. Holding above this level could serve as a springboard for GBP/USD, targeting the first immediate resistance at 1.25795. Should bullish momentum persist, further resistances are projected at 1.26377 and 1.27034, respectively. On the flip side, should the pair lose ground, it would first encounter support at 1.24498, with more substantial floors awaiting at 1.23929 and 1.23369 if the downtrend accelerates.
The technical indicators suggest a solidifying bullish bias; the Relative Strength Index (RSI) stands at 63, indicating growing momentum but still shy of the overbought territory. Furthermore, the 50-Day Exponential Moving Average (EMA) at 1.2470 now acts as a support level, reinforcing the upward trajectory since it resides below the current price.
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- GOLD Price Analysis – April 29, 2024
GOLD Price Analysis – April 29, 2024
Daily Price Outlook
Despite the Federal Reserve (Fed) delaying interest rate cuts due to persistent inflation, the Gold price (XAU/USD) continued its upward trend, remaining well bid around $2,342 and hitting an intra-day high of $2,344.39. The rise in gold prices can be attributed to the weakening US dollar, which failed to gain traction despite the Fed's hawkish stance amid a risk-on market sentiment. In the meantime, the losses in the US dollar were further bolstered by the strong rally in the Japanese Yen (JPY). Moreover, the ongoing geopolitical tensions regarding the Russia-Ukraine war and the Israel-Hamas conflict were seen as another key factor that kept the safe-haven gold price higher.
US Dollar Weakness and Fed's Hawkish Stance Fuel Gold Price Surge
Despite the Federal Reserve's hawkish stance on interest rates, the broad-based US dollar is losing traction and still flashing red amid positive market sentiment. Hence, the bearish trend in dollar helping the gold prices to stay bid. Investors are paying close attention to the Federal Reserve's upcoming decision on interest rates. They expect the Fed to keep rates steady between 5.25% and 5.5%. The US economy is strong, but rising inflation has led to speculation that rate cuts might not occur until September.
On the data front, the US Bureau of Economic Analysis reported on Friday that the Personal Consumption Expenditures (PCE) Price Index rose 0.3% in March, exceeding expectations for a reading of 2.6%. The yearly rate also climbed to 2.7% from 2.5% in February. Meanwhile, the core PCE Price Index, which excludes volatile food and energy prices, remained steady at 2.8%, higher than the anticipated 2.6%. These results reinforced the Federal Reserve's hawkish expectations and put pressure on the non-yielding Gold price.
Therefore, the weakening US dollar, coupled with reinforced expectations of a hawkish Federal Reserve due to rising inflation, has contributed to upward pressure on gold prices despite the absence of yield.
Geopolitical Tensions Drive Safe-Haven Appeal for Gold
On the geopolitical front, the ongoing tensions from the Russia-Ukraine conflict and Israel-Hamas disputes are main factors boosting gold's safe-haven appeal. As per the latest report, Ukraine's attacks on Russian oil refineries and its plea for increased US military aid due to escalating frontline conditions, increased geopolitical risks, supporting the gold price.
Despite talks by Hamas officials in Egypt for a ceasefire, Israel has approved continued military action. However, the casualties on both sides highlight the conflict's toll, with over 34,000 Palestinians and over 1,100 Israelis reported dead since October 7. This situation has created uncertainty, potentially driving up the demand for gold as a safe-haven investment.
GOLD (XAU/USD) - Technical Analysis
Gold prices experienced a slight downturn today, trading at $2,333.435, a decrease of 0.20%. The 4-hour chart reveals a technical landscape where the metal is currently fluctuating around a pivotal point of $2,320.43. The market's direction appears to hinge on the ability of gold to sustain levels above this pivot, which could set the stage for an upward movement toward the immediate resistance at $2,353.05.
If gold successfully breaches this first resistance, subsequent targets lie at $2,373.72 and $2,401.28, suggesting potential for a more significant rally if bullish momentum gathers pace. Conversely, should gold falter and drop below the pivot point, it may seek support at lower levels of $2,290.91, followed by $2,268.21 and $2,244.57, which would indicate a strengthening bearish sentiment.
Current technical indicators provide a mixed outlook; the Relative Strength Index (RSI) is at 51, signaling a relatively neutral market sentiment, neither overbought nor oversold. The 50-Day Exponential Moving Average (EMA) at $2,326.43 sits just above the pivot, underscoring a tentative bullish inclination in the near term.
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EUR/USDPrice Analysis – April 26, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair maintained its upward trend and remained well-bid around 1.0731 level, reaching an intra-day high of 1.0753. However, the main factor behind the EUR/USD's upward trend is the market sentiment regarding the timing of potential Fed interest-rate cuts.
Despite a slightly disappointing US GDP growth rate for Q1, the unexpectedly high Personal Consumption Expenditures Prices component supported the US Dollar. As a result, the probability of a rate cut at the Fed's July meeting decreased, providing temporary strength to the dollar.
However, the Euro has managed to maintain its ground, driven by factors such as improved economic sentiment in the Eurozone and speculation about the ECB's future monetary policy.
Impact of the Core PCE Price Index Release on the EUR/USD
Looking ahead, the forthcoming release of the core Personal Consumption Expenditures (PCE) Price Index for March is set to introduce additional volatility into the EUR/USD currency pair.
Analysts predict the core PCE index may show prices rising more than expected, following a strong GDP report. If the increase exceeds economists' forecast of 2.6%, especially surpassing the previous month's 2.8%, it suggests ongoing inflation. This could lead the Fed to keep interest rates steady for longer, which might weaken the EUR/USD exchange rate. In essence, higher-than-expected inflation could make the US dollar more attractive, potentially causing the euro to lose value against it.
On the flip side, if the core PCE comes in lower than expected, it could speed up the belief that the Fed will cut interest rates soon. This would likely make the US dollar weaker and cause the EUR/USD pair to rise. Currently, the CME FedWatch Tool indicates there's a chance of a rate cut in September.
Therefore, the EUR/USD pair could weaken if the core PCE index shows higher-than-expected inflation, leading the Fed to maintain interest rates. Conversely, a lower-than-expected reading might strengthen the pair due to expectations of a rate cut.
US Economic Indicators and Their Impact on EUR/USD Pair
On the flip side, the performance of the EUR/USD currency pair remains linked to key US economic indicators, particularly amid expectations regarding Fed monetary policy. The recent slowdown in US economic growth, with Q1 GDP expanding by 1.6% compared to market expectations of 2.5%, has highlighted concerns about the pace of recovery. Despite this, inflationary pressures have persisted, as evidenced by the Personal Consumption Expenditures Price Index climbing at a 3.4% annual rate, surpassing the Fed's 2% target.
Looking ahead, investors are eagerly waiting for the upcoming inflation report, expecting a 0.3% increase in both headline and core PCE figures. The relationship between economic growth and inflation is important, affecting market sentiment and the outlook for stocks, which also influences the EUR/USD pair.
EUR/USD - Technical Analysis
On April 26, the EUR/USD pair experienced a slight decline, closing at 1.07223, down by 0.06%. Despite the modest drop, the pair remains in close proximity to the key pivot point at 1.0714, suggesting a potential for pivotal market movements in upcoming sessions.
Technical analysis indicates that the EUR/USD has immediate resistance at 1.0746, with further resistance seen at 1.0778 and 1.0822. These levels will be crucial for traders to monitor as a break above could signify a continuation of bullish momentum. Conversely, the currency pair has established immediate support at 1.0674. Additional support levels are positioned at 1.0636 and 1.0609, which could play a pivotal role should the pair continue its downward trajectory.
The Relative Strength Index (RSI) stands at 59, indicating that the market is neither overbought nor oversold, and there is still room for upward price movement. The 50-Day Exponential Moving Average (EMA) at 1.0693 serves as a near-term support level, slightly below the current price, which adds an additional layer of support for the EUR/USD.
Given the current market conditions and technical setup, traders might consider entering a long position if the EUR/USD rises above 1.07129, aiming for a take profit at 1.07657 and placing a stop loss at 1.06789 to manage risk effectively.
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- GOLD Price Analysis – April 26, 2024
GOLD Price Analysis – April 26, 2024
Daily Price Outlook
Gold price (XAU/USD) succeeded in halting its downward rally and turned bullish around the $2,346 level, reaching an intraday high of $2,350.20. However, the reason for its upward trend can be associated with the mild weakness in the US dollar, which underpinned the gold as it becomes cheaper for holders of other currencies. Furthermore, the US Gross Domestic Product (GDP) report for the first quarter of 2024 indicated a notable slowdown in economic growth and an increase in inflation, which was seen as negative for gold prices, as investors may seek alternative assets to hedge against economic uncertainty.
On the flip side, the expectation that the Federal Reserve will maintain higher interest rates due to persistent inflation is supporting demand for the US dollar, which could limit losses and cap gains in the gold price. Traders prefer to wait for more cues about the Federal Reserve's rate cut path before taking a strong position.
Impact of US Economic Data and Federal Reserve Expectations on Gold Prices
Despite hawkish comments from Fed officials, the broad-based US dollar has experienced a downtick amid disappointing GDP growth and higher-than-expected inflation figures, providing some support to gold prices. On the data front, the US economy grew slower than expected in the first quarter of 2024, expanding by only 1.6%, compared to the previous 3.4%. This was below market expectations of 2.5%.
Despite sluggish growth, prices remained high, with the Personal Consumption Expenditures Price Index climbing by 3.4% annually, surpassing the Fed's 2% target. As a result, the US dollar fell to a two-week low around mid-105.00, following the release of disappointing GDP growth and higher-than-expected inflation figures.
Therefore, the modest downtick in the US dollar, driven by disappointing GDP growth and higher-than-expected inflation, has provided support to gold prices amid upbeat economic data and hawkish Fed comments.
Meanwhile, the financial markets are not expecting the US Federal Reserve to cut interest rates in June, with less than a 10% chance priced in. The probability of a rate cut in September is also low, dropping below 58%. Investors are eagerly awaiting another inflation report due on Friday, which is expected to show a 0.3% monthly increase in both headline and core Personal Consumption Expenditures (PCE). Yearly estimates suggest a 2.6% rise in headline PCE and a 2.7% increase in Core PCE, indicating ongoing inflation concerns.
Consequently, the low expectations for US Federal Reserve rate cuts and ongoing inflation concerns, as indicated by upcoming inflation reports, may support gold prices amid market uncertainty and inflation worries.
Geopolitical Tensions in the Middle East and Gold Prices
On the geopolitical front, tensions in the Middle East have cooled slightly but remain a concern. The eastern part of Rafah is experiencing constant artillery shelling amid Israeli plans for a ground invasion, despite international warnings. The United Nations is seeking legal possession of evidence from Gaza's mass graves for potential investigations, with the Palestinian Civil Defence offering cooperation. In response to President Biden's announcement, the US has initiated pier construction in Gaza for maritime aid delivery. Hamas has expressed willingness to release captives but insists on a ceasefire as a condition.
Therefore, the ongoing tensions in the Middle East, highlighted by the situation in Rafah and Israeli plans for a ground invasion, alongside international concerns and humanitarian efforts, may contribute to market uncertainty and potentially support gold prices as a safe-haven asset.
GOLD (XAU/USD) - Technical Analysis
On April 26, the price of gold marginally increased to $2,334.76, up 0.17%, reflecting modest market movements amidst varying global economic signals. Currently, the pivot point is set at $2,328.74, which serves as a crucial juncture for determining the metal's short-term trajectory.
Gold's immediate resistance lies at $2,356.18, with subsequent levels at $2,400.53 and $2,444.27. These resistance points are crucial markers that could dictate the pace of price ascensions if surpassed. Conversely, support levels are established at $2,292.92, $2,253.78, and $2,220.76. A breach below these could suggest a bearish turn, pressuring gold prices further.
From a technical perspective, the Relative Strength Index (RSI) at 50 indicates a balanced market condition, neither overbought nor oversold, suggesting that gold is currently in a state of equilibrium between buyers and sellers. Additionally, the 50-Day Exponential Moving Average (EMA) stands at $2,340.20, slightly above the current price, suggesting slight bearish pressure but also potential for upward movement if gold breaks through this average.
Given these indicators, the recommended trading strategy would be to initiate a buy above the pivot point of $2,328, with a target profit at $2,380 and a stop loss at $2,290.
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AUD/USD Price Analysis – April 25, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair maintained its upward trend and remained well-bid around the 0.6528 level, hitting the intraday high of $0.6531. However, the upward rally was driven by multiple positive factors including hawkish sentiment regarding the RBA monetary policy stance and the release of robust Australian Consumer Price Index (CPI) figures.
The hawkish sentiment towards the RBA's monetary policy stance, coupled with robust CPI figures, typically boosts the AUD currency due to expectations of potential interest rate hikes. Furthermore, the risk-on market sentiment, backed by easing tensions in the Middle East, has played a major role in underpinning the AUDUSD currency pair.
Impact of Australian Economic Data and RBA Expectations on AUD/USD Pair
On the data front, Australia's Consumer Price Index (CPI) exceeded expectations, rising by 1.0% in the first quarter of 2024 quarter-on-quarter and 3.6% year-on-year. This was higher than the forecasted 0.8% and 3.4%, respectively, indicating a strong inflationary trend. Meanwhile, the Monthly Consumer Price Index for March also surpassed expectations, reaching 3.5% year-on-year.
Conversely, in Australia, the Judo Bank Composite Output Index rose in April, showing the third consecutive month of expansion in the private sector, primarily driven by the service sector, while manufacturing output declined at a slower rate compared to previous months.
Therefore, the stronger-than-expected CPI and positive private sector growth in Australia strengthen the AUD against the USD.
Furthermore, the upticks in the AUD/USD pair were further bolstered by the growing expectations of a more hawkish stance from the Reserve Bank of Australia (RBA) on interest rates. Luci Ellis, chief economist at Westpac and former RBA Assistant Governor (Economic), highlights that inflation slightly exceeded expectations in the March quarter.
Westpac predicts the RBA will maintain interest rates in May and has revised their forecasted date for the first rate cut from September to November this year. Luci Ellis's remarks on higher inflation and delayed rate cuts boost AUD/USD, signaling a hawkish RBA stance and economic strength.
US Economic Indicators and Market Sentiment's Impact on AUD/USD Pair
On the US front, the US Dollar is unable to extend its upward trend and has turned bearish recently, possibly due to risk-on market sentiment. However, the Greenback's losses might be offset by slight gains in US Treasury yields. The upcoming release of the preliminary Q1 Gross Domestic Product (GDP) figures from the United States is anticipated on Thursday, with expectations of a growth rate slowdown.
These figures will offer insights into the US economy's strength and could hint at the Federal Reserve's (Fed) future moves. If the GDP report shows better-than-expected numbers, it could lead to speculation that the Fed will delay its rate-cut plans.
On the data front, the US Census Bureau's latest report showed that in March, orders for durable goods increased by 2.6%, marking a positive sign for manufacturing. Excluding transportation, new orders rose by 0.2%. On the flip side, the Federal Reserve plans to maintain higher interest rates for a longer period due to ongoing inflation.
This decision comes after robust US consumer inflation data and hawkish remarks from Fed officials. This was seen as one of the key factors that cap losses in the US dollar and limit the upside momentum of the AUD/USD pair.
AUD/USD - Technical Analysis
Today, the Australian Dollar (AUD/USD) recorded a slight uptick, trading at 0.65098, a 0.20% increase. This movement situates the currency pair near critical levels on the four-hour chart that could dictate short-term market dynamics.
The AUD/USD is currently navigating just below a key pivot point set at 0.65345. This level could serve as a springboard for further advances if the pair manages to breach it convincingly. Immediate resistance is closely placed at 0.65362, followed by more substantial barriers at 0.65761 and 0.66157. These figures represent crucial thresholds that could define the bullish potential in upcoming trading sessions.
From a technical perspective, the Relative Strength Index (RSI) is at 66, indicating a slightly overbought condition but not enough to deter potential bullish momentum. Additionally, the 50-day Exponential Moving Average (EMA) at 0.64483 supports the currency pair from below, further validating the bullish sentiment in the market.
Given the current market setup, adopting a tactical trading approach could be beneficial. A buy limit order at 0.64832 with a take profit target at the pivot point of 0.65345 and a stop loss at 0.64523 would leverage potential upward movements while effectively managing risk.
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GOLD Price Analysis – April 25, 2024
Daily Price Outlook
Gold price (XAU/USD) was able to stop its downward rally and turned bullish around the $2,325 level, hitting an intraday high of $2,328.85. However, the reason for its upward trend can be attributed to the modest weakness in the US Dollar, which tends to benefit gold as it becomes cheaper for holders of other currencies.
Furthermore, a softer tone in equity markets has also contributed to the positive sentiment towards gold. Traders prefer to wait for more cues about the Federal Reserve's rate cut path before placing a strong position. Moving ahead, traders will keep an eye on important US economic data like the Q1 GDP report today and the PCE Price Index on Friday.
Modest USD Downtick and its Impact on Gold Price
Despite the upbeat US economic data and hawkish comments from Fed officials, the broad-based US dollar has experienced a modest downtick, providing some support to gold prices. However, the weaker dollar makes gold more affordable for holders of other currencies, leading to increased demand for the precious metal. However, the upside for gold remains limited as investors await more clarity on the Federal Reserve's rate-cutting cycle. Moving on, the focus is on key US macroeconomic data, including the Advance Q1 GDP report and the PCE Price Index, which will influence the direction of the US Dollar and, consequently, the price of gold.
On the data front, the US Census Bureau's latest report showed that in March, orders for durable goods increased by 2.6%, marking a positive sign for manufacturing. Excluding transportation, new orders rose by 0.2%. Besides, the Advance US GDP report, expected later today, is forecasted to reveal a growth rate of 2.5% for the first quarter, down from the previous 3.4%.
On the flip side, the Federal Reserve plans to maintain higher interest rates for a longer period due to ongoing inflation. This decision comes after robust US consumer inflation data and hawkish remarks from Fed officials. This was seen as one of the key factors that cap losses in the US dollar and limit the upside momentum of gold.
Geopolitical Tensions Ease, Decreasing Demand for Safe-Haven Assets
On the geopolitical front, tensions in the Middle East have cooled down, making investors less anxious about risks. This positive change in sentiment has decreased the appeal of safe-haven assets like gold. As a result, people are now more interested in investing in riskier options such as stocks or real estate.
Iran has also reduced its military presence in southern Syria after Israeli strikes, which has calmed concerns and improved market stability. This reduction in tension between Iran and Israel is good news for markets, as it lowers the risk of further conflict, giving investors more confidence and causing less demand for safe-haven assets like gold, which in turn lowers its price.
GOLD (XAU/USD) - Technical Analysis
As of today, gold is modestly up, trading at $2318.095, a 0.10% increase. The precious metal is currently navigating around a critical juncture on the four-hour chart, which gives us several insights into potential future movements.
Gold's current price is slightly below its pivot point at $2332.535, indicating that the bulls have yet to take full control. If they do, immediate resistance can be found at $2346.215, followed by further barriers at $2359.266 and $2382.859. These levels are essential for traders to monitor, as a break above could signal a continuation of the upward trend.
Conversely, if the price begins to descend, there is immediate support located at $2290.910. Additional support is found lower at $2268.205 and $2244.573. These marks could serve as crucial floors that, if broken, may accelerate declines in the gold price.
The technical indicators add depth to our analysis. The Relative Strength Index (RSI) stands at 40, which points to neither an overbought nor an oversold market, suggesting that there is potential room for movement in either direction. Meanwhile, the 50-day Exponential Moving Average (EMA) at $2357.463, which lies above the current price, acts as a resistance level that gold might strive to surpass in the upcoming sessions.
Considering the current market setup, a cautious trading strategy would be advisable. Placing a sell limit order at $2330 with a take profit target at $2297 and a stop loss at $2345 could capitalize on potential downward movements while managing risk effectively.
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