GOLD Price Analysis – April 07, 2023
Daily Price Outlook
In European trading, gold prices dropped for the first time in four days, moving away from 13-month highs due to profit-taking and investor reluctance to establish new positions ahead of the US payrolls data release.
The US payrolls report, set to be released tomorrow, will reveal the number of new jobs added to the economy, as well as updates on unemployment and wage statistics.
Gold prices slipped by 0.6% to $2,008 an ounce, after a 0.1% increase yesterday, reaching a 13-month peak at $2,032. This week, gold prices have risen by over 0.2% in response to the unexpected OPEC+ production cut and weak US data.
Recent US figures indicated that fewer jobs were added in the private sector than anticipated in March, while the services sector also experienced a slowdown during the same month.
US job opportunities in February plummeted to a two-year low, while manufacturing fell to a three-year low, signaling a possible recession in Q1.
US Interest Rates
Following the data release, the probability of no policy changes at the Federal Reserve's May meeting is at 60%, while the likelihood of a 0.25% rate hike has dropped to 40%.
Investors now anticipate a rate cut by the Federal Reserve in September, with a final interest rate of 4.25% in December.
The Jobs Data
Investors are now awaiting the critical US payrolls data on Friday to assess the economy's health and determine the Federal Reserve's next steps.
Fed Comments
Cleveland Fed President Loretta Mester stated that it is still too early to determine whether the Fed will increase interest rates in May. Gold holdings at the SPDR Gold Trust saw a 0.87-ton increase yesterday, reaching a total of 930.91 tons, the highest level since October 2022.
Gold (XAU/USD) – Technical Outlook
Gold prices approached our anticipated target of $2,040 and experienced a bearish bounce, testing the support level formed above $2,010 while maintaining stability above it. Notably, the stochastic oscillator is shedding its negative momentum, and the 50-day Exponential Moving Average (EMA50) continues to offer positive support to the price.
Consequently, we expect positive trading today as the primary bullish trend resumes within the upward channel depicted on the chart. It is important to note that our targets start at $2,040 and extend to $2,065. However, a break below $2,010 could pressure the price to test the bullish channel's support line around $1,975 before any new attempts to rise.
Related:
* EUR/USD Price Analysis – April 07, 2023
EUR/USD Price Analysis – April 07, 2023
Daily Price Outlook
The EUR/USD experienced a decline against the dollar in European trading for the second consecutive day after data revealed a significant slowdown in European inflation in March, diminishing the likelihood of a substantial interest rate increase by the ECB in March.
The dollar continues to strengthen, supported by optimistic predictions of a 0.25% Federal Reserve rate hike in May, marking the third consecutive increase.
EUR/USD dropped 0.5% to 1.0788, reaching a session-high of 1.0844, following a 0.6% loss on Friday, which was the first decline in five days due to weaker European inflation data.
The euro appreciated over 1.3% against the dollar in the first quarter, marking the second consecutive quarter of gains, driven by the ECB's actions.
The European Central Bank persistently worked to counteract record inflation in the eurozone by raising interest rates more rapidly than the Federal Reserve.
European Inflation
Preliminary data indicated that consumer prices in the eurozone increased by 6.9% in March, the slowest pace since February 2022 and the most significant inflation drop to date, down from 8.5% in the previous reading and below the 7.1% estimate.
Such figures eased inflationary pressures on ECB policymakers and negatively impacted predictions for aggressive ECB policy tightening in the coming months. On Monday, the dollar index climbed 0.45% against a basket of major competitors.
The dollar is profiting from its status as an alternative investment, with investors now concentrating on the Federal Reserve's forthcoming policy actions to curb inflation. Expectations for a 0.25% rate hike by the Fed in May stand at 61%, while the odds of no policy changes remain at 39%.
EUR/USD – Technical Outlook
The EURUSD pair has been experiencing sluggish trading activity since the morning, with the stochastic indicator entering oversold territories. This is anticipated to encourage the price to reinitiate the upward trend in forthcoming sessions, with the next target being set at 1.1032.
The ascending channel continues to structure the proposed bullish wave, which will persist as long as the 1.0850 level is not breached and remains below it.
Today's anticipated trading range lies between a 1.0850 support level and a 1.1000 resistance level.
For more market insights, visit LHFX.
Related:
* GOLD Price Analysis – April 07, 2023
AUD/USD Price Analysis – April 06, 2023
Daily Price Outlook
As the market anticipates Australian foreign trade data for February and China's Caixin Services PMI for March early on Thursday, the AUD/USD is picking up bids to counterbalance recent losses around 0.6720.
Despite weaker US data, the Australian dollar declined over the past two days, with bulls being restrained even as Reserve Bank of Australia (RBA) Governor Philip Lowe made efforts to revive them.
Governor Philip Lowe of the RBA took action to appease hawks on Wednesday, following the central bank's delay in raising interest rates. The policymaker did not consider a rate cut and indicated that the balance of risks leans towards further rate hikes.
US-China Tensions Over Taiwan Add Pressure to AUD/USD Price
However, the US Dollar managed to recover and disregard the negative data amid recession concerns. Notably, the ADP Employment Change for March fell to 145K, missing the 200K forecast and down from a revised 261K prior.
Both the final S&P Global Composite and Services PMIs for March displayed disappointing results, with the former declining to 52.3 from 53.3 preliminary estimates, and the latter dropping to 52.6 from 53.8 initial projections.
More importantly, the US ISM Services PMI for the same month heightened pessimism as it plunged to 51.2, well below the 54.5 forecast and 55.1 prior.
Weaker US Statistics Ignored as US Dollar Regains Strength
The recent US-China dispute over Taiwan also exerts pressure on the AUD/USD price due to the close ties between Australia and China, in addition to the US Dollar's rally and RBA meetings and actions.
Escalating US Recession Concerns Impact Market Mood and Treasury Bond Yields
In this context, US recession concerns have intensified, negatively impacting market sentiment. The gloomy Wall Street performance also dragged down US Treasury bond yields. However, thanks to the negative sentiment, the US Dollar Index (DXY) managed to bounce back from a two-month low and halt a two-day downtrend.
AUD/USD – Technical Outlook
The AUDUSD pair's decline halted near the 0.6665 level, and the price has started to recover in an attempt to resume the intraday bullish wave, with an initial target of 0.6780.
The EMA50 is attempting to prevent the price from incurring further losses, supporting the continuation of the projected positive scenario. However, it is important to note that breaking through the 0.6665 level could halt the anticipated rise and push the price to visit the next correctional level at 0.6550.
Today's likely trading range is between 0.6650 support and 0.6770 resistance.
Related:
* GOLD Price Analysis – April 06, 2023
GOLD Price Analysis – April 06, 2023
Daily Price Outlook
Gold reached its highest level in a year on Wednesday, as recent US economic data fanned concerns about a downturn and raised anticipation that the Federal Reserve may ease up on rate hikes.
Gold Reaches Highest Level in a Year Amid Economic Slowdown Concerns
Spot gold was unchanged at $2,020.30 per ounce at 01:46 p.m. EDT (1746 GMT), after reaching a high of $2,031.89 in March 2022. Gold futures in the United States finished 0.1% lower at $2,035.60. After a significant decline in US job vacancies in February, gold jumped beyond the important $2,000 level on Tuesday, adding to gains earlier this week following an OPEC-led spike in oil that spurred fears of another inflation explosion.
Weaker US Data Boosts Bets on Federal Reserve Easing Rate Hikes
As financial tensions intensify, many anticipate gold will continue to surge above $2,000 per ounce. Gold prices will reach an all-time high and surpass $2,200 by the end of March 2024, according to UBS.
Analysts Predict Continued Growth for Gold Prices Above $2,000
Private payroll growth was worse than predicted in March, raising concerns about the economic implications of the Fed's quick rate hikes. Bullion benefited from a weaker currency as well as a drop in US yields.
Weaker Currency and Falling US Yields Support Bullion
"The market has shown some risk aversion as a result of yesterday's negative economic data, which is positive for safe-haven gold," said Jim Wyckoff, senior analyst at Kitco Metals. Traders believe that the possibility of a stop in US rate hikes in May is excellent news for zero-yield gold and its status as the go-to inflation hedge.
Market Awaits US Nonfarm Payroll Figures on Friday for Further Clues
Although a swift turnaround of Fed policy is improbable, Carsten Menke of Julius Baer's Next Generation indicated in a note that a US recession may still be avoided. Analysts anticipate that the market's reaction to the US nonfarm payroll numbers on Friday will be delayed until the following week due to the Good Friday holiday.
Gold (XAU/USD) – Technical Outlook
While maintaining its steadiness, the gold price approached our predicted target of $2,040.00 and witnessed a bearish bounce, testing the support base built above $2,010.00. Notably, the stochastic indicator is losing its bearish momentum, while the EMA50 continues to provide price support.
As a result, we anticipate favorable trading today, resuming the primary bullish trend within the chart's bullish channel. It's vital to remember that our goals range from $2,040.00 to $2,065.00. If the price falls below $2,010.00, it will be forced to test the bullish channel's support line at $1,975.00 before trying another advance.
The projected trading range for today is $2,005.00 support to $2,040.00 resistance.
Related:
* BTC/USD Price Analysis – April 06, 2023
BTC/USD Price Analysis – April 06, 2023
Daily Price Outlook
Bitcoin, the world's leading cryptocurrency, has experienced a rollercoaster ride since the beginning of 2023, surging over 70% in the first quarter and outperforming assets like physical gold and US stocks. However, the upward trend appears to be losing momentum, as BTC recently fell more than 2% to $28,069.54, while Ethereum also dropped 1.15% to $1,890.98.
The ratio between Bitcoin's (BTC) daily trading volumes in spot and derivatives markets has dropped to an 11-month low, indicating renewed speculative activity in the crypto market. The ratio has plunged nearly 80% in three months, hitting a low of 0.117, last seen on May 16, 2022, according to data from South Korea-based blockchain analytics firm CryptoQuant.
This decline, which coincides with a 70% year-to-date increase in Bitcoin's price, suggests a heightened risk appetite in the crypto market and potential for price volatility.
The decrease has been particularly sharp since Bitcoin first encountered significant resistance above $28,500 on March 21, indicating that speculators have recently entered the Bitcoin market at a faster pace compared to retail investors and long-term holders.
Markus Thielen, head of research and strategy at Matrixport, noted that the theory of the 2023 crypto rally being driven by diversification away from the U.S. dollar and associated bank credit risk may be on shaky ground if the rally was purely driven by an increase in leverage, as evidenced by the falling volume ratio.
BTC/USD – Technical Outlook
Bitcoin's price attempted a crucial upside break above the $28,800 resistance area but struggled to gain momentum above this level, leading to a downward reaction.
The price fell below $28,400 and $28,200 levels as bears pushed it below the $28,000 support. It reached a low of $27,813 before bulls stepped in. Bitcoin's price is currently consolidating above the recent low and trading close to $28,000.
The next significant resistance is around the $28,300 zone, close to the 50% Fib retracement level of the downward movement from the $28,792 swing high to the $27,812 low. If Bitcoin fails to surpass the $28,400 resistance, it could experience another decline. Immediate downside support is near the $27,800 zone.
The following major support is close to the $27,550 zone or the recent low. A downward break below the $27,550 support could send the price towards the $26,500 support area.
Related:
* GOLD Price Analysis – April 06, 2023
EUR/USD Price Analysis – April 05, 2023
Daily Price Outlook
The EUR/USD pair has been trading sideways after rising above 1.0970 in the early Asian session. Investors are eagerly awaiting the release of US Automatic Data Processing (ADP) Employment and ISM Services PMI data, which could affect the currency pair's movement.
US Dollar Index refreshes monthly low as Fed's status-quo decision looms
On Tuesday, the S&P 500 ended the day with losses as investors became cautious before the US economic reports, leading to a decrease in risk appetite. The US Dollar Index (DXY) also hit a monthly low near 101.46 as investors anticipated the Federal Reserve (Fed) maintaining the status quo for its May monetary policy meeting.
The CME Fedwatch tool indicates a 60% likelihood of the Fed's interest rate decision remaining unchanged. The Fed is expected to focus on contracting manufacturing activities to prevent the US economy from slipping into a recession. The release of US economic data on Wednesday is expected to provide more clarity.
Weak job openings data indicates US labor market is cooling
According to consensus, the US economy added 200,000 new jobs in March, which is lower than the previous addition of 242,000. However, if the US labor market continues to remain tight, there is still hope for one more rate hike from the Fed. On Tuesday, data revealed lower talent acquisition requests, dropping to 9.9 million compared to January's 10.5 million and market expectations of 10.4 million.
US ISM Services PMI expected to contract, keeping investors busy
Aside from US Employment data, investors are also keeping an eye on the US ISM Services PMI. It is expected to decline from 55.1 to 54.5, and the New Orders Index, which reflects forward-demand, is expected to drop from 62.6 to 57.6.
In the Eurozone, ECB policymakers are pleased as consumer inflation expectations for the next 12 months fell to 4.6% in February from January's 4.9%. However, the data does not include the recent increase in oil prices, which could affect the outlook. ECB President Christine Lagarde is expected to continue hiking rates.
EUR/USD Intraday Technical Levels
Support Resistance
1.0843 1.0946
1.0782 1.0988
1.0740 1.1049
Pivot Point: 1.0885
EUR/USD – Technical Outlook
The EUR/USD pair has surged and crossed the resistance level of 1.0900 and is currently trading above it, indicating a positive trend for the day. There is an expectation for further upward movement towards the next target of 1.1032.
The EMA50 is supportive of the bullish trend, and it is expected that the price will gain positive momentum to reach the target.
The bullish trend is likely to continue in the upcoming sessions unless there is a break below 1.0880 and if it stays below that level. The trading range for the day is expected to be between the support level of 1.0840 and the resistance level of 1.0990.
For more market insights, visit LHFX.
Related:
* GOLD Price Analysis – April 05, 2023
AUD/USD Price Analysis – April 05, 2023
Daily Price Outlook
Early Wednesday, AUD/USD bears took a break around mid-0.6700s, as traders awaited a speech from Reserve Bank of Australia (RBA) Governor Philip Lowe. The RBA paused its rate hike trajectory and satisfied sellers the previous day by maintaining its current monetary policy with a benchmark rate of 3.60%. The Australian central bank attributed the recent decline in Australian inflation and retail sales data to justify the status quo while also acknowledging the possibility of further monetary tightening.
Russian Foreign Minister Raises Fears of Escalating Moscow-Brussels Tussle
Meanwhile, the US dollar's reserve currency status has been challenged, contributing to a risk-on mood in the market. Bloomberg reported that the Chinese yuan surpassed the US dollar as the most traded currency in Russia in February, with the gap continuing to widen in March. Brazil and China also agreed to pause the US dollar's usage as an intermediary in trade transactions. Furthermore, Russian Foreign Minister Sergei Lavrov raised concerns about escalating tensions with Brussels and indicated that Moscow would deal with Europe more harshly if necessary.
US-China Tension Continues as Beijing Criticizes Meeting Between Taiwan President and US House Speaker
The ongoing US-China tension remains a topic of discussion as well. On Tuesday, Taiwan President Tsai Ing-wen met with US House Speaker Kevin McCarthy, which drew criticism from China's Consulate General in Los Angeles.
AUD/USD Intraday Technical Levels
Support Resistance
0.6678 0.6742
0.6640 0.6768
0.6614 0.6806
Pivot Point: 0.6704
AUD/USD – Technical Outlook
The AUDUSD pair encounters strong resistance at the 0.6780 level, currently displaying a bearish bias due to the negative impact of stochastic indicators, while awaiting positive momentum to help the price break through the aforementioned level and confirm its trajectory towards 0.6920 as the next target.
Consequently, our bullish outlook for today is contingent upon the price remaining stable above 0.6735, as breaking this level will exert pressure on the price to test the 0.6665 region before attempting another rise.
Today's expected trading range lies between the 0.6720 support and 0.6850 resistance levels.
Related:
* GOLD Price Analysis – April 05, 2023
GOLD Price Analysis – April 05, 2023
Daily Price Outlook
Gold prices soared to their highest in over a year on Tuesday, finally breaking through and maintaining a position above the $2,000 mark as the US Dollar and bond yields fell. The weaker greenback and additional US data contributed to the yellow metal's rally from a compressed formation. At the time of writing, gold is trading at $2,020, up 1.8%.
US Job Openings Drop to Lowest Level in Nearly Two Years
US job openings in February dropped to their lowest level in nearly two years, accompanied by a continued decline in factory orders. Job openings, an indicator of labor demand, fell from 632,000 to 9.9 million at the end of February, the lowest since May 2021, according to the monthly Job Openings and Labor Turnover Survey (JOLTS) report. "The largest decline in openings was in professional and business services, followed by healthcare. Accommodation and food services saw openings fall back to mid-2022 levels. Construction job openings increased despite the sector's interest rate sensitivity," analysts at ANZ Bank stated.
Factory Orders Decline for Second Consecutive Month
US factory orders declined for a second consecutive month, down 0.7% in February following a 2.1% drop in January and a 1.7% increase in December. This data comes after the Institute for Supply Management (ISM) reported yesterday that its Manufacturing PMI fell to 46.3 last month, the lowest since May 2020, from 47.7 in February.
Persistent Inflation Concerns Expected to Fuel Hawkish Fed Sentiment
In part, the data echoed last week's PCE data, the Federal Reserve's preferred inflation measure, which had mixed results. While both headline and core figures were slightly lower than anticipated, the super core accelerated for a second consecutive month to 4.63% YoY, its highest level since October. "This is not the direction the Fed desires, and we expect the hawkish tilt in Fed comments to persist," analysts at Brown Brothers Harriman explained.
Gold (XAU/USD) Intraday Technical Levels
Support Resistance
1959 2000
1934 2016
1918 2040
Pivot Point: 1975
Gold (XAU/USD) – Technical Outlook
The gold price experienced a significant rally, surpassing our initial target of $2,000.00 and breaking through the recently recorded high of $2,009.78, confirming the continuation of the dominant bullish trend for upcoming sessions.
Our next target is set at $2,040.00, as we anticipate further increases in the short term and intraday basis.
It's important to note that maintaining a position above $2,009.78 is a prerequisite for sustaining the bullish trend.
Related:
* AUD/USD Price Analysis – April 05, 2023
USD/JPY Price Analysis – April 04, 2023
Daily Price Outlook
The USD/JPY is trading at 133.16, showing an increase of 0.36% in the last 24 hours. The release of Japan's economic data related to the labor market, retail demand, and Tokyo CPI has led to a significant upward movement for the currency pair.
Furthermore, as fears about additional bank failures wane, the Japanese Yen, which is considered a global safe-haven asset, is declining against the US dollar.
US GDP Plunges, Pushing USD/JPY Lower
The final estimate of the US GDP for the fourth quarter of 2022 has decreased slightly from 2.7% to 2.6%, down from the Q3 print of 3.2%. Additionally, US data released on Thursday revealed that unemployment claims from the previous week increased to 198K, higher than expected, indicating a softening labor market. These data points support the argument for a more relaxed Federal Reserve stance.
As markets continue to downplay the likelihood of further rate hikes, the US Dollar Basket (DXY), a gauge of USD performance, dropped to 102.17 after the release of the GDP report.
On Friday, the core PCE price index, which the Fed prefers to use as a measure of inflation, will be released. The index will provide further details on the state of the world's leading economy and may offer additional support for the USD/JPY pair.
Tokyo Inflation Slowdown, Weakening JPY
In March, Tokyo's inflation rate continued to decrease, following a significant decline in February caused by government subsidies for electricity costs. According to statistics from the Statistical Bureau, Tokyo's Core CPI increased by 3.2% in the 12 months ending in March, slightly above forecasts for growth of 3.1% but falling short of the previous month's figure of 3.3%.
Overall, Tokyo's CPI rose by 3.3% in March, slightly down from the 3.4% increase recorded in February. Steady inflation indicates that the Bank of Japan's (BoJ) goal to maintain inflation consistently at desired targets remains unaffected. This may increase the likelihood of ending the ultra-loose monetary policy.
However, retail demand in Japan remained strong in February. Yearly Retail Sales data has increased significantly from an estimated 5.8% to 6.6%. The BoJ's policymakers and the Japanese government are concerned that factors outside of domestic demand are primarily responsible for inflationary pressures in Japan. Nevertheless, current retail demand may alleviate some concerns.
Furthermore, the dismal labor market statistics are driving the recent decline of the Japanese Yen. Compared to the consensus and the previous announcement of 2.4%, the unemployment rate has risen to 2.6%. The USD/JPY as a safe haven has risen as Japan's increasing unemployment rate requires the continuation of the BoJ's loose policy.
USD/JPY Intraday Technical Levels
Support Resistance
132.52 133.57
131.84 133.94
131.46 134.62
Pivot Point: 132.89
USD/JPY – Technical Outlook
The USDJPY pair experienced a noticeable decline after testing the 133.30 level in previous sessions, resuming the anticipated bearish trend on both intraday and short-term basis. The next primary targets are the 131.60 and 130.40 levels.
To reinforce the expectations of continuing the bearish trend and moving towards the suggested targets, the price needs to break through the strong support base formed by the EMA50, which currently stands at 132.50.
The projected trading range for today is between 131.60 support and 133.30 resistance.
Related:
* GOLD Price Analysis – April 4, 2023
GOLD Price Analysis – April 4, 2023
Daily Price Outlook
Gold (XAU/USD) is currently trading at 1,980.01, down 0.23% in the last 24 hours. As the US Dollar gains strength amidst mixed market sentiments, the price of gold is declining.
OPEC’s Surprise Decision
The Organization of the Petroleum Exporting Countries (OPEC) and its associates, also known as OPEC+, have announced output target cutbacks on Sunday, causing confusion in the inflation forecast and sending oil prices higher. OPEC+ has reduced its output target by 1.1 million barrels per day, resulting in an approximately 6% overnight increase in Brent crude prices.
Moreover, Russia has stated that it will continue to aim for a reduction of 500,000 barrels per day through the end of the year, further fueling inflation concerns and projections of a hawkish shift in the Federal Reserve's outlook for rate hikes.
As a result, XAU/USD declined due to the rising demand for the US dollar as a safe haven, following the approval of a surprise output reduction by OPEC+. The US Dollar Index (DXY) is currently up 0.16%, trading at 102.26.
Odds of Fed Rate Hikes
Data released on Monday from the US suggests that the Federal Reserve is nearing the end of its rate-hike cycle. The ISM manufacturing index for March fell to 46.3, the lowest level since May 2020.
Prior to the release of the US ISM report, markets were anticipating a 25 basis point Fed rate hike in May, with a probability of almost 60%. However, after the disappointing data, the likelihood of a 25 basis point Fed rate hike next month dropped to 54%. Consequently, the rates on US Treasury bonds fell, with the benchmark 10-year yield returning to 3.421%.
Despite revived inflation concerns being ignored by the markets, there has been some improvement in risk sentiment due to the resurgence of dovish Fed forecasts. However, the US Dollar is rebounding, limiting the XAU/USD.
Gold traders are now awaiting the release of mid-tier US economic data later in the day, such as JOLTS Job Openings and Factory Orders, for new trading momentum.
Ultimately, the value of the US Dollar will have an impact on the XAU/USD. Therefore, the attitude of Wall Street is also important. Moreover, statements from Federal Reserve officials will be significant ahead of Friday's crucial Nonfarm Payrolls report from the United States.
Gold Price Chart - Source: Tradingview
Gold (XAU/USD) Intraday Technical Levels
Support Resistance
1959 2000
1934 2016
1918 2040
Pivot Point: 1975
Gold (XAU/USD) – Technical Outlook
The gold price concluded positively yesterday, settling above the $1,962.50 level. It halted the bearish correction and is now poised to resume the primary bullish trend, supported by the EMA50. The next major targets are anticipated to be the $2,000.00 and $2,040.00 levels.
The price is again moving within the symmetrical triangle, and a breach of the $1,985.00 level is necessary to provide the positive momentum required to rally toward the aforementioned targets. It should be noted that the current negativity of the stochastic indicator may impede the attempts to continue rising and could lead to some sideways fluctuations.
Generally, a bullish bias is expected for the near future, contingent upon the price maintaining stability above $1,962.50. A break below this level would pressure the price to revert to the corrective bearish trend, with initial targets set at visiting the $1,933.20 area.
Related:
* USD/JPY Price Analysis – April 04, 2023