US stock market futures for the S&P 500, Nasdaq-100, and Dow Jones Industrial Average have all seen gains, with attention turning to a week of quarterly earnings reports, particularly in the financial sector, where there is increased focus on the health of the sector after the collapse of Silicon Valley Bank. Notable names reporting this week include Charles Schwab, Bank of America, Morgan Stanley, Tesla, and Procter & Gamble. Corporate earnings got off to a positive start, with Wells Fargo and JPMorgan Chase beating expectations, but retail sales data showing a slowdown in consumer spending pulled markets lower on Friday.

US Treasury Secretary, Janet Yellen, believes that banks may become more restrictive with lending, which could allow the Federal Reserve to stop hiking interest rates. Yellen also stated that this tightening of lending could act as a substitute for further interest rate hikes. This follows the collapse of Silicon Valley Bank and the potential fallout from the episode. Despite Friday’s losses, the major averages posted solid weekly gains, in yet another sign of resiliency for this market.

On Friday, the overall stock market fell by 0.21%. The financial sector saw an increase of 1.05%, while the communication services and energy sectors saw small gains of 0.31% and 0.19%, respectively. The utilities and real estate sectors saw the largest drops of 1.11% and 1.68%, while the healthcare and materials sectors saw declines of 0.79% and 0.67%, respectively. The consumer staples and information technology sectors also saw losses of 0.58% and 0.51%, respectively, while the consumer discretionary and industrial sectors saw slight gains of 0.13% and -0.12%, respectively.

Major Pair Movement

On Friday, the dollar index increased by 0.6% due to above-forecast April Michigan consumer sentiment and 1-year inflation expectations, despite a 1% U.S. retail sales fall being dismissed by the Fed. This was accompanied by a rise in Treasury yields and increased rate-hike potential, indicating the market’s preparedness for a lower-than-expected retail sales result.

EUR/USD fell by 0.46% after reaching a new 1-year high at 1.10755 on EBS, as a result of the diminished Fed rate cut bets and the rise in 2-year Treasury yields, while USD/JPY surged by 0.88% breaching the mid-point of the March banking crisis slide at 133.77.

GBP/USD also experienced a decline in value by 0.84%. This was due to falling gilt-Treasury yield spreads and a delayed risk-off response to higher Treasury yields. As a result, prices fell from a minor new 10-month high to an uptrend line from late March, which caught last week’s lows.

Technical Analysis

EUR/USD (4 Hours)

The EUR/USD pair is facing difficulties in extending its recovery above the psychological resistance level of 1.1000, as investors remain cautious about the possibility of one more rate hike by the Federal Reserve (Fed). The monthly Retail Sales data released on Friday showed a contraction of 1.0%, higher than the expectations of a 0.4% decline. This, along with the hawkish commentary from Fed Governor Christopher Waller, has increased the odds of further policy tightening by the Fed, which led to a recovery in the US Dollar Index (DXY). Mixed views from ECB policymakers have also shifted investors to the sidelines, with Pierre Wunsch suggesting a rate hike of between 25 and 50 basis points in May, while Mario Centeno advocated a pause or a slowing in the interest rate hike spell.

Looking at the technical analysis, the EUR/USD price fell lower on Friday due to the positive impact of good retail sales data in the US. The price is currently pushing below the middle Bollinger band, targeting the lower band with a narrower band. Our support level now stands at 1.0962, and we anticipate the market to be in consolidation with the potential for a move higher. The RSI has moved back lower to the middle around the 50 levels, indicating that the market is taking a breather for the day.

Resistance: 1.1026, 1.1052

Support: 1.0962, 1.0921

XAU/USD (4 Hours)

The price of gold has reached a one-year high and is currently around $2,040. This is due in part to the weakening of the US dollar, as investors anticipate that the Federal Reserve will pause its rate-hiking cycle. Recent data, including the US Producer Price Index and Jobless Claims, suggest that inflation is easing and labor market conditions are loosening up, which further supports the view that the Fed will pause after hiking interest rates one last time in May. The IMF has also trimmed its global growth outlook for 2023, citing the impact of higher interest rates, which fuels recession fears and leads investors to favor safe-haven assets such as gold. However, traders are waiting for the release of US macro data, including monthly Retail Sales figures and the Preliminary Michigan Consumer Sentiment Index, before making any major moves.

Looking at the technical analysis, the XAU/USD price fell below the $2,000 level but has since rebounded. The price is now approaching the lower Bollinger band, and the bands are moving sideways. We have revised our key support level to $1,990 and our resistance level to $2,005. The RSI is hovering around the 42 levels, indicating the possibility of further downward pressure.

Resistance: $2,005, $2,017

Support: $1,990, $1,982

Economic Data

This week, market participants are eagerly awaiting some highly anticipated economic reports. The focus will be on key indicators such as CPI in Canada, the UK, and New Zealand, as well as Flash Manufacturing and Services PMI in the UK and the US. These much-awaited reports are crucial in helping traders and investors stay ahead of the curve and make informed decisions.

Here are the key events to watch out for:

New York Empire State Manufacturing Index | US (April 17)

The NY Empire State Manufacturing Index sank to -24.6 in March 2023 from February’s -5.8.

 Analysts anticipate a reading of -15 in April.

Claimant Count Change | UK (April 18)       

The number of people claiming for unemployment benefits in the UK fell by 11,200 in February 2023.

For March, analysts expect this trend to persist, with a projected decrease of 9,500.  

Consumer Price Index | Canada (April 18)

CPI in Canada rose 0.4% in February 2023, easing from 0.5% in January.

For March, analysts expect the index to increase by 0.3%. 

Consumer Price Index | UK (April 19)

UK inflation rose unexpectedly in February, with CPI up 10.4% annually from 10.1% in January. This was the first increase in four months. 

For March, analysts expect a lower reading of 10.2%.

Consumer Price Index | New Zealand (April 20)

New Zealand’s CPI jumped 1.4% in the fourth quarter of 2022 from the previous quarter.

For the first quarter of 2023, analysts forecast the index to increase by 1.6%.

Flash Manufacturing PMI and Flash Services PMI | Germany (April 21)      

In March 2023, the German Flash Manufacturing PMI was revised slightly higher to 44.7, while the Flash Services PMI was revised slightly lower to 53.7. 

For April, analysts expect the Flash Manufacturing PMI to be released at 45.5, while Flash Services PMI at 53.5.

Flash Manufacturing PMI | UK (April 21)

UK Flash Manufacturing PMI came in at 47.9 in March 2023, down from February’s seven-month high of 49.3.

Analysts expect a reading of 48.5. in April. 

Flash Manufacturing PMI and Flash Services PMI | US (April 21)  

The US Flash Manufacturing PMI came in at 49.2 in March 2023, up from 47.3 in February. Meanwhile, Services PMI was revised lower to 52.6.

For April 2023, analysts expect the US Flash Manufacturing PMI to be released at 48, while Flash Services PMI at 51.8.

On Thursday, Stock futures are trading slightly lower as investors keep an eye on the start of corporate earnings season and the latest inflation data. The focus is on what the inflation numbers suggest about the economy and how they may impact interest rates. Dow Industrial Average futures have lost 42 points, while S&P 500 futures are slightly below the flatline, and Nasdaq-100 futures have shed 0.1%.

The March producer price index, which measures the prices paid by companies, declined by 0.5% from the previous month, even though economists had expected prices to remain the same. This decline has supported a trend of easing inflation seen in the March consumer price index report. Investors will also pay close attention to data on retail sales, import prices, and the industrial sector, which will provide more insights into the state of the economy.

Investors will keep a close eye on today’s big-bank earnings, with JPMorgan, Wells Fargo, and Citi set to report before the bell. In addition, they will monitor data on retail sales, import prices, and the industrial sector, which will provide additional insight into how the economy is doing.

On Thursday, all sectors experienced gains in the stock market, with the Communication Services and Consumer Discretionary sectors leading the way with a 2.33% and 2.31% increase respectively. The Real Estate sector was the only one that saw a decline with a decrease of 0.41%. The utility sector had the smallest increase of 0.02%.

This data shows that the overall stock market experienced positive growth on this particular day, with the majority of sectors seeing increases in stock prices. The strong performance of the Communication Services and Consumer Discretionary sectors could suggest positive news for companies in those areas, while the decrease in the Real Estate sector may indicate some struggles for companies in that industry.

Major Pair Movement

The EUR/USD currency pair reached a 1-year high as investors believe the US Federal Reserve may only raise interest rates by 25 basis points once more before beginning a series of rate cuts later in the year. This follows a fall in US PPI in March, which was greater than anticipated. While the data points to a cooling economy, it does not suggest enough weakness for the Federal Reserve to abandon its focus on inflation just yet.

Markets forecasted that a series of aggressive rate hikes and tighter bank credit, combined with a shrinking pool of savings due to the pandemic, may lead to economic weakness later in 2023 and 2024. Despite reports suggesting a 25bp hike in May by ECB policymakers, markets still project a 41% chance of a 50bp increase and a total of 78bp of tightening by October. Sterling rose 0.3% after hitting new 10-month highs, and the Aussie surged 1.4% amid risk-on flows, strong jobs data, and positive China growth prospects.

Technical Analysis

EUR/USD (4 Hours)

The EUR/USD currency pair is rising due to support from both currencies after a period of consolidation below 1.1050 in the Asian session. The US Dollar is facing pressure as the market expects the Federal Reserve (Fed) to act on inflation sooner than anticipated after the softening of the US Producer Price Index (PPI). The S&P500 futures indicate cautious market sentiment despite bullish activity on Thursday. The Euro is gaining strength as investors debate the scale of a potential interest rate hike by the European Central Bank (ECB), with options of 25 and 50 basis points being considered for the May policy meeting. ECB Governing Council member Bostjan Vasle noted concerns over core inflation continuing to move in the wrong direction.

Looking at the technical analysis, the EUR/USD price has been increasing but there are indications of easing, as seen from the Bollinger band where the lower band is becoming narrower. Our support level has been adjusted to 1.1031, as the market is expected to consolidate for today, despite the release of US retail sales. The RSI has entered the overbought level, which suggests there may be limited higher movement potential.

Resistance: 1.1076, 1.1136

Support: 1.1031, 1.0977

XAU/USD (4 Hours)

Gold prices rose to their highest level since March 2022, reaching $2,048.67 per troy ounce on Thursday, despite an optimistic market outlook. This was due to speculation that the US economy would avoid a severe contraction if the Federal Reserve (Fed) ends its tightening cycle. The Producer Price Index (PPI) in the US declined 0.5% month-on-month in March, which was lower than expected, and annual readings also fell. This news caused the US dollar to fall and stock indexes to rise. The weekly unemployment claims also rose, indicating a weaker labor market. The Nasdaq Composite was up 1.57%, while the Dow Jones Industrial Average and S&P500 also saw gains. The 10-year Treasury note yields remained unchanged at 3.42%, while the 2-year note yields decreased by 3 basis points.

Looking at the technical analysis, the XAU/USD price is still increasing and attempting to surpass the upper band of the Bollinger band. There is currently a high demand for gold in the market due to the release of some weak US data. We have adjusted our key support level to $2,039, which was previously a resistance level. The RSI is entering the overbought level, which suggests a potential correction lower today, particularly since it is the end of the week.

Resistance: $2,053, $2,068

Support: $2,039, $2,020

Economic Data

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Stocks on Wall Street declined on Wednesday, despite the release of cooler-than-expected inflation data, due to concerns about a potential recession. The Dow Jones Industrial Average fell by 0.11%, while the S&P 500 and Nasdaq Composite dropped 0.41% and 0.85%, respectively. This came after the Federal Reserve’s March policy meeting minutes showed officials feared a mild recession later this year after the U.S. banking crisis.

Meanwhile, the March consumer price index rose by only 0.1%, compared to the expected 0.2%, suggesting that inflation is beginning to slow. However, the core CPI, which excludes food and energy, rose as anticipated. As companies such as JPMorgan Chase, Wells Fargo, Citigroup, and UnitedHealth begin reporting first-quarter earnings later in the week, the health of the U.S. economy and consumers will be further tested.

On Wednesday, all sectors in the stock market declined by 0.41%, except for Industrials which increased by 0.33%, Energy which increased by 0.11%, and Materials which increased by 0.07%. Health Care increased by only 0.02%, while Utilities decreased by 0.12%, Financials by 0.20%, Real Estate by 0.30%, Consumer Staples by 0.45%, Information Technology by 0.61%, and Communication Services by 0.89%. Consumer Discretionary saw the largest decline, falling by 1.54%.

Major Pair Movement

On Wednesday, the dollar index fell by around 0.6% after the March U.S. CPI came in slightly lower than expected. However, the losses were somewhat contained after Fed speakers reminded the markets that they could still tighten further if core inflation does not proceed sustainably toward their target. The minutes from the Fed’s March meeting showed concern regarding the banking crisis, but inflation remained a top priority.

The EUR/USD rose by 0.74%, nearing February’s one-year highs at 1.1034, as the ECB is expected to hike rates by at least 75bp into year-end, compared to the Fed, which is not fully priced to hike 25bp in May before roughly 50bp of cuts by December. Sterling also rose by 0.5%, nearing April’s 10-month highs at 1.2525, and could continue to climb if upcoming U.S. data favor a more cautious Fed. The USD/JPY fell by 0.42%, but it now needs hawkish U.S. data to get a bullish close above the pivotal 133.77 level.

Technical Analysis

EUR/USD (4 Hours)

The EUR/USD pair reached a psychological resistance level of 1.1000, its highest in more than two months. The US Dollar Index (DXY) dropped to around 101.53 due to market expectations that the Federal Reserve (Fed) will pause its policy tightening. The rise in the major currency pair is due to the US inflation slowing as expected, with headline inflation only increasing by 0.1% and annual inflation easing from 6% to 5%. Core inflation, however, increased from 5.5% to 5.6% due to persistent rent prices.

The Fed believes that US inflation will continue to soften and reach the middle of 3% this year before reaching desired levels in 2024. The market is keenly watching Friday’s US Retail Sales data, which is expected to contract by 0.4%. More rate hikes from the European Central Bank are anticipated due to stubborn inflation caused by a labor shortage and higher oil prices.

From a technical perspective, the EUR/USD price is continuing to rise and create a strong push to the upper band in the Bollinger band. We have adjusted our support level to 1.0962 as the market is expected to break higher today with the release of PPI data which is also an indicator for the US inflation data. The RSI has risen above 50 (at 69), indicating a potential for further upward movement.

Resistance: 1.1026, 1.1052

Support: 1.0962, 1.0921

XAU/USD (4 Hours)

Gold prices initially surged to a high of $2,028.31 per troy ounce after the release of the US Consumer Price Index, which indicated that price pressures continued to recede in March, easing concerns about inflation. However, prices retraced gains and are now hovering around $2,007. The weaker US dollar across the FX market and positive stock market sentiment fueled by modest inflation figures are increasing expectations that the Federal Reserve will hike rates one more time before pausing.

The central bank has adopted a more dovish stance amid a banking crisis that ended up with the collapse of two local banks and dragged alongside Swiss giant Credit Suisse. The inflation figures have somehow let the Fed stay comfortable with a more conservative stance, diminishing the risk of a recession. Investors are not expecting any surprises from the upcoming release of the Federal Open Market Committee Meeting Minutes, which should repeat the dovish tone from Chair Jerome Powell and, if anything, trigger another round of dollar sell-off.

From a technical perspective, the price of XAU/USD continues to rise and reach the upper band of the Bollinger band. The market is currently waiting for the release of the PPI which is also an indicator of the US inflation data. We adjusted our key support level to $2,010. As long as this level is maintained, the XAU/USD uptrend will remain intact. The RSI keeps moving above the 50 levels, indicating that there is potential for gold to continue to rise.

Resistance: $2,026, $2,039

Support: $2,010, $1,997

Economic Data

Stock futures were flat in overnight trading on Tuesday as investors turned their attention to the highly anticipated inflation report for March. Dow Jones futures remained unchanged, while S&P 500 and Nasdaq 100 futures slightly increased by 0.04% and 0.07%, respectively.

On Tuesday, the S&P 500 closed with little change, while the Dow Jones Industrial Average gained 0.29% and the Nasdaq Composite lost 0.43%. With Wall Street looking ahead to March’s consumer price index, economists predict that CPI rose by 0.2% in March, which could influence the Federal Reserve’s rate decision in May and result in the cessation of the central bank’s rate-hiking regime.

Investors and traders are keeping an eye on the CPI number, which could cause significant changes in the stock market. Additionally, minutes from the Federal Reserve’s March policy meeting are expected to be released on Wednesday, providing further insight into the central bank’s decision to raise interest rates amid the collapse of Silicon Valley Bank and the turmoil that shook the banking industry. As the first-quarter earnings season begins, investors await reports from JPMorgan Chase, Wells Fargo, Citigroup, and UnitedHealth, which will test the health of the U.S. economy and consumers.

In the stock market on Tuesday, most sectors remained stable without significant changes. However, the energy sector was the top gainer with an increase of 0.89%, while financials, materials, and industrials followed with gains ranging between 0.59% and 0.85%.

Conversely, the information technology sector experienced the biggest loss with a decline of 1.03%, and communication services also decreased by 0.43%. Consumer discretionary and utilities sectors showed little change, while real estate, health care, and consumer staples sectors had small but positive gains.

Major Pair Movement

The US dollar index fell 0.3%, driven by gains in the EUR/USD and GBP/USD pairs, as the early risk-off sentiment that led to dollar buying retreated despite a rise in Treasury yields. The USD/JPY also rebounded after dropping to 132.97 lows, driven by a rise in Treasury yields earlier in the day. However, a call for policy prudence and patience by Chicago Fed President Austan Goolsbee and IMF’s warning about a “perilous combination of vulnerabilities” in financial markets tempered the Treasury yield rise.

The concerns about the impact of credit tightening on top of monetary tightening remain, as emergency bank borrowing from the Fed remains quite high and bank deposits have only expanded marginally following March’s sharp drop. Wednesday’s US core CPI data will be most relevant, as the expected plunge in the overall year-on-year inflation rate is a function of last March’s post-Ukraine invasion peak in oil versus March’s post-invasion trough. Additionally, the minutes from the Fed’s last meeting will also be released. The ECB and BoE are expected to hike rates at their upcoming meetings, with the BoE having roughly 50bp of hikes by September’s 4.66% implied peak, which still seems weak given the UK’s inflation at 10.4%.

Technical Analysis

EUR/USD (4 Hours)

The EUR/USD bounced back from its weekly low as Europe returned from the Easter holiday, with the pair rising above 1.0900 due to a weaker US Dollar and expectations of another rate hike from the ECB. However, Eurozone Retail Sales data released on Tuesday showed a drop of 0.8% in March, with an annual rate decline of -3%, better than expected. The next crucial report for the region will be Industrial Production on Thursday, with expectations of a 25-basis points rate hike at the May 4 ECB meeting.

Meanwhile, the Federal Reserve is evaluating the potential impact of financial stress on the real economy, and if inflation decreases, interest rates will have to be lowered. The attention is now focused on the release of March’s US Consumer Price Index on Wednesday, with the CPI expected to rise by 0.3% and the Core by 0.4%, followed by the publication of the minutes of the latest FOMC meeting later that day. Despite the rise in US yields, the US Dollar was affected by an improvement in risk sentiment.

From a technical perspective, the EUR/USD price is continuing to rise and has moved above the middle band of the Bollinger band. We have adjusted our support level to 1.0881 as the market is expected to break today with the release of US inflation data. The RSI has risen above 50 (at 57), indicating a potential for further upward movement.

Resistance levels: 1.0935, 1.0968

Support levels: 1.0881, 1.0835

XAU/USD (4 Hours)

Gold is currently struggling to extend its gains beyond the $2,000 threshold after having fallen to $1,981.66 on Monday. This is happening amidst the broader weakness of the US dollar and the better performance of stock markets while looming US inflation figures continue to be a concern. Currently, XAU/USD is trading near its daily high of $2,007.44, as most global indexes trade in the green. The Dow Jones Industrial Average in the United States is up 146 points to trade at its highest level since early January. However, the Nasdaq Composite is down 0.37%.

Market participants are dropping the Greenback ahead of the United States March Consumer Price Index (CPI) which is expected to signal core inflation has ticked higher yearly. A few weeks ago, such an outcome would have triggered speculation of a potentially aggressive rate hike from the Federal Reserve (Fed). However, that is not the case following the banking crisis that unfolded in mid-March in the United States. Following the collapse of two local banks, the central bank has adopted a more conservative stance on monetary tightening, as draining liquidity to tame inflationary pressures has multiple undesired effects.

Meanwhile, concerns about a recession continue to grow due to sluggish macroeconomic data and the unexpected decision by OPEC+ to cut oil output. These factors have fueled a dismal market mood, which seems to be temporarily on pause. However, risk-averse environments hardly benefit the Greenback these days, with Gold making the most of it.

From a technical perspective, the price of XAU/USD continues to rise and has surpassed the $2,000 level, indicating the possibility of a renewed upward trend. The market is currently waiting for the release of US inflation data, causing the Bollinger bands to tighten as the price approaches the upper band. It is crucial to monitor the key support level at $2,000, as a decline below this level may signal a potential reversal. However, as long as this level is maintained, the XAU/USD uptrend will remain intact. The RSI has increased to 59, above the 50 levels, indicating that there is potential for gold to continue to rise.

Resistance levels: $2,020, $2,031

Support levels: $1,988, $2,002

Economic Data

US stock futures showed little change on Monday night as investors await the release of economic data later in the week. Dow Jones Industrial Average futures increased by 35 points, or 0.1%, while S&P 500 and Nasdaq 100 futures climbed 0.13% and 0.11%, respectively. The market is anticipating the March readings of the consumer price index on Wednesday and the producer price index on Thursday, which could provide further insight into how the Federal Reserve will proceed on its rate-hiking campaign.

In addition to the economic data releases, the US stock market is preparing for another earnings season. Several major US banks, which have not reported earnings since the bank crises in March, are scheduled to release their reports. Investors are particularly interested in the financial institutions’ perspectives on current threats and whether they will make any adjustments in an environment that seems less optimistic than three months ago. Before the market opens, the National Federation of Independent Business will also release the latest results of its small business index, and a few regional Federal Reserve presidents will be speaking on Tuesday.

On Monday, most sectors in the market saw a positive price change, with the All Sectors index increasing by 0.10%. Industrials had the highest gain of 0.90%, followed by Energy and Materials with gains of 0.65% and 0.49%, respectively. Real Estate and Consumer Discretionary also had positive gains of 0.49% and 0.43%, respectively.

On the other hand, some sectors saw a decline in prices, with Communication Services having the largest decrease of 0.69%. Information Technology and Utilities also saw a decrease in prices with declines of 0.15% and 0.20%, respectively. Health Care and Consumer Staples had the smallest price changes with a decline of only 0.04% and a decrease of 0.01%, respectively.

Major Pair Movement

The US dollar saw gains on Monday as there was a renewed expectation of a Fed hike following Friday’s solid US jobs report, leading to a flight to safety. Meanwhile, the Japanese yen saw a decline as new BoJ governor Ueda dimmed near-term normalization hopes. Treasury yields and the dollar were supported by Friday’s Fed data showing bank deposits rising for the first time in roughly a month and a New York Fed survey on Monday showing higher inflation expectations and harder credit access.

The market is closely watching the upcoming CPI data on Wednesday and retail sales on Friday as they will be important for the Fed’s May 3 policy announcements. Additionally, the quarterly Senior Loan Officer Opinion Survey, presented to the Fed at that meeting but not publicly released until the following week, will be crucial in understanding the tightening of credit conditions and the impact of monetary tightening. Sterling fell 0.3% while the EUR/USD saw a recovery from Monday’s low but remained down 0.37%. The USD/JPY surged 1.1% as haven dollar gains were augmented by widespread yen selling on dimmed BoJ normalization expectations.

Technical Analysis

EUR/USD (4 Hours)

EUR/USD fell on Monday due to a stronger US dollar following Friday’s NFP report, hitting a week low of 1.0830 before rebounding to 1.0850. Investors are now focusing on Wednesday’s US Consumer Price Index data. US yields climbed, with the 2-year yield back above 4% and the 10-year yield above 3.40%, after the upbeat March jobs report. The European bond market will reopen on Tuesday, and on the same day, the Eurozone will report Retail Sales, which are predicted to decline by 0.8% in March. Market participants are still looking for the ECB to raise interest rates at their next meeting.

From a technical standpoint, the price of EUR/USD has rebounded after reaching the support level at 1.0835 and is now targeting the middle band of the Bollinger bands. The key support level to watch is at 1.0791, as a break below this level could indicate a potential reversal. As long as this level holds, the trend for EUR/USD remains in an uptrend. The RSI has risen to 45 from a lower level, indicating the potential for further upward movement.

Resistance levels: 1.0891, 1.0935

Support levels: 1.0835, 1.0791

XAU/USD (4 Hours)

Gold prices started the week lower, falling to around $1,990 per troy ounce, amid concerns over economic growth and a potential recession in the US after the Nonfarm Payrolls report on Friday. The US dollar benefited from a sour mood and thin market conditions due to the Easter Monday holiday in Europe, while investors await the release of the US Consumer Price Index (CPI) on Wednesday, which is expected to show a YoY inflation rate of 5.2% for March.

From a technical standpoint, the price of XAU/USD has rebounded from Monday’s low of $1,988 and is currently trading at $1,992. This indicates a strong attempt to reach the middle bands of the Bollinger bands from a technical perspective. It is important to keep an eye on the key support level at $1,988, as a break below this level could signal a potential reversal. However, as long as this level holds, the uptrend for XAU/USD remains intact. The RSI has risen to 45 from a lower level, suggesting a potential for further upward movement.

Investors are eyeing key inflation data and the start of the first-quarter earnings season as U.S. equity futures edge up slightly on Sunday evening. Let’s take a closer look at the latest market developments and economic data reports to determine their potential impact on the market.

Futures tied to the S&P 500 rose 0.2%, and Dow Jones Industrial Average futures edged up 62 points or 0.2%, while Nasdaq 100 futures remained flat. The market’s performance last week was volatile, with the Dow being the only index to post a weekly gain of 0.6%. On the other hand, the S&P 500 and Nasdaq Composite ended lower by 0.1% and 1.1%, respectively.

The March jobs report released on Friday showed that the nonfarm payrolls grew by 236,000 for the month, slightly lower than the Dow Jones estimate of 238,000. The unemployment rate also fell to 3.5%, as expected. However, the data revealed a weakening labor market and the potential of a slow-moving recession unfolding in the U.S. The latest economic data has not resolved the inflation concerns. As such, the odds of another quarter-point rate hike in May should increase as the data does not appear to justify a Fed pause.

Investors can expect a busy week ahead with a flurry of economic data and the start of the first-quarter earnings season. The latest consumer price index and producer price index data will be key in determining if or when the Fed will pause or put an end to its rate-hiking campaign. The first batch of companies reporting their first-quarter financial results will also be released, with Tilray Brands kicking things off on Monday, followed by the major banks – JPMorgan Chase, Wells Fargo, and Citigroup – reporting on Friday.

Today’s Early Market Pair Movement

• The US dollar index remained stable at 102.06 on Monday morning.
• The EUR/USD currency pair was unchanged at 1.0917.
• The GBP/USD currency pair stabilized at 1.2439 after experiencing a three-session fall.
• USD/JPY remained at elevated levels above 132.00.
• AUD/USD continued to lack upward momentum, trading at 0.6672.
• USD/CHF remained subdued at 0.9043.
• USD/CAD continued its recent rebound and traded at 1.3505 after Canada’s jobless rate remained steady at 5.0% in March, versus the expected 5.2%.
• Bitcoin rebounded and traded above $28,300.

Technical Analysis

EUR/USD (4 Hours)

The EUR/USD pair retreats from its intraday high to 1.0900, although the bulls remain defensive as they look for fresh clues to continue the four-week uptrend in early Monday trading. The pair is reflecting the holiday mood of Easter Monday, as well as anxiety ahead of the top-tier data/events this week. The optimism in the options market for the EUR/USD prices is due to fears surrounding the reserve currency status of the US dollar and relatively more hawkish comments from the European Central Bank (ECB) compared to the Federal Reserve (Fed).

Although the Easter Monday holiday may limit the movements of EUR/USD, the US Consumer Price Index (CPI) data, and the latest Federal Open Market Committee (FOMC) Monetary Policy Meeting Minutes will be crucial in providing clear directions for the pair.

From a technical perspective, the current movement of EUR/USD is at 1.0901, which is below the middle band in the Bollinger Band. This suggests there is still a possibility of the EUR/USD moving lower. Additionally, the RSI indicator is at 49, just below the mid-level, which also supports the potential for a lower movement. However, since there is a bank holiday in the EU today, we can expect that there won’t be much movement in the EUR/USD.

XAU/USD (4 Hours)

The price of gold (XAU/USD) initially saw a sharp decline at the opening but managed to recover due to responsive buyers at lower levels. It fell below the psychological support level of $2,000.00 as the chances for another 25-basis point rate hike increased significantly. However, it managed to climb back above the $2,000.00 resistance level. The CME Fedwatch tool shows a sudden increase in the likelihood of a 25-basis point rate hike by more than 65%.

The rock-bottom unemployment rate in the US economy has raised expectations of a consecutive 25 basis point rate hike by the Federal Reserve (Fed). The jobless rate was reported at 3.5% on Friday, which was lower than expected than the previous release of 3.6%. The US Nonfarm Payrolls (NFP) data remained subdued, with the US economy adding slightly fewer jobs in March at 236k than the consensus of 240k.

From a technical perspective, Gold experienced a decline after a strong US jobs report on Friday, which is a typical reaction. Currently, Gold is trading at $1,998, breaking below the $2,000 barrier. Today, some bank holidays may affect the movement of Gold. However, it is expected that Gold will rise today as investors may turn to Gold while waiting for tomorrow’s US inflation data.

Economic Data

Dear Client,

New contracts will automatically be rolled over as follows:

Please note:

• The rollover will be automatic, and any existing open positions will remain open.

• Positions that are open on the expiration date will be adjusted via a rollover charge or credit to reflect the price difference between the expiring and new contracts.

• To avoid CFD rollovers, clients can choose to close any open CFD positions prior to the expiration date.

• Please ensure that all take-profit and stop-loss settings are adjusted before the rollover occurs.

• All internal transfers for accounts under the same name will be prohibited during the first and last 30 minutes of the trading hours on the rollover dates.

If you’d like more information, please don’t hesitate to contact [email protected].