As we begin a new week, the financial world is buzzing with anticipation of some economic reports. All eyes will be on the Bank of Canada Rate Statement and FOMC Meeting Minutes, alongside the eagerly awaited CPI, PPI and Retail Sales data release in the US. These reports are crucial for traders navigating the markets and making informed decisions. 

Here are key events to watch out for:

Consumer Price Index (CPI) | US (April 12)

The CPI in the US rose 0.4% month-on-month in February 2023, after rising 0.5% in January.

For March, analysts expect the reading to increase by 0.3%

Bank of Canada Rate Statement | (April 12) 

As previously signalled, the Bank of Canada kept its overnight rate target steady at 4.5% during its March 2023 meeting.

The central bank stated that it intends to maintain the current rate if the economic conditions align with the latest Monetary Policy Report’s expectations. 

FOMC Meeting Minutes | US (April 13)

The Fed raised the fed funds rate by 25bps to 4.75%-5% in March 2023, matching the February increase, and pushing borrowing costs to new highs since 2007, as inflation remains elevated.

The decision came in line with expectations from most investors, although some believed the central bank should pause the tightening cycle to shore up financial stability.

Employment Change | Australia (April 13)

Employment in Australia created an additional 64,600 jobs to reach 13.83 million in February 2023, surpassing market predictions of 48,500, following a downward revision of 10,900 jobs in the previous month.

Analysts expect employment will add 20,000 jobs in March 2023.

Gross Domestic Product (GDP) | UK (April 13)

The British economy expanded 0.3% month-on-month in January 2023, partially bouncing back from a 0.5% contraction in December when strikes halted business activities.

For February 2023, analysts expect the UK GDP to expand further by 0.2%.

Producer Price Index (PPI) | US (April 13)

Producer prices for final demand in the US fell 0.1% month-on-month in February 2023.

For March, analysts expect the US PPI to go up by 0.1%. 

Retail Sales | US (April 14)

Retail sales in the US were down 0.4% month-on-month in February 2023, following an upwardly revised 3.2% surge in January.

For March 2023, analysts expect US Retail Sales to contract by 0.4%.

Prelim University of Michigan Consumer Sentiment (April 14)

The University of Michigan revised the US consumer sentiment downwards to 62 in March 2023 from the preliminary figure of 67. This marks the first decrease in sentiment in four months, as consumers anticipate an upcoming recession.

For April 2023, analysts the data to stand at 62.7.

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As part of our commitment to provide the most reliable service to our clients, there will be system maintenance this weekend.

Maintenance Hours :
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Following the release of weaker-than-expected economic data, Wall Street experienced a renewed rush to safety, with bonds surging and equities plummeting. This has rekindled concerns that a recession may be looming, sending shockwaves across the financial markets.

The 10-year Treasury yield tumbled to its lowest point since September, now standing at around 1.5 percentage points below the three-month Treasury bill rate. This widening gap between short-term and long-term yields indicates an impending economic slowdown, which investors are now anticipating.

In response to this uncertain economic climate, investors have shifted their focus to safer investments such as the dollar and the Japanese yen. Gold prices have also soared to a 13-month high, as investors seek a safe haven asset amid the market turbulence.

Several economic indicators have fueled concerns about a potential downturn, including the recent decline in the Institute for Supply Management’s index and the ISM factory survey showing further deterioration. These reports have highlighted the tightening of credit conditions and persistently high interest rates, which could further exacerbate the economic slowdown.

The S&P500 and Nasdaq 100 have both taken a hit, with Consumer Discretionary performing the worst among all groups, dropping by 2.04%. In contrast, the Dow Jones Industrial Average edged higher, but the MSCI world index fell on Wednesday.

As we navigate through these turbulent economic times, it remains uncertain whether a recession is imminent. However, the recent market volatility and economic indicators suggest that we may be headed towards a downturn. As investors seek safe havens, it’s critical to keep a watchful eye on the markets and make informed investment decisions based on the available information.

Technical Analysis

XAUUSD (4-Hour Chart)

Gold prices surged to a new multi-month high of $2,032.03 per ounce on Wednesday before experiencing a downward correction. Despite some profit-taking among traders ahead of the long Easter holiday, the XAU/USD remains steady at around $2,020 and holding onto most of its weekly gains. The weak performance of the US Dollar persists due to lackluster economic data. Though disappointing figures typically prompt risk aversion and boost the Greenback, the focus now is on the US Federal Reserve’s plan to pause rate hikes, which makes the USD less appealing in the long run.

The US recently released the ISM Services PMI, which unexpectedly fell to 51.2 in March from 55.1 in February. The ADP survey on private job creation also revealed a modest gain of 145K in March, missing expectations of 200K and lower than the previous 261K. At the time of typing, price trading at 2020.73 and RSI sits at 67.31.

Examining the 4-hour chart, XAU/USD has lost its bullish momentum, but there are no clear indications of bearishness. Although technical indicators have rotated lower, their downward strength is limited as they are still in overbought territory. Lastly, Gold prices remain well above the bullish moving averages, with the 20 SMA serving as dynamic support at approximately $1,991.20 in the short term.

Resistance: 2,024.90 2,037.85 2,050.00

Support: 2,009.70 1,991.20 1,982.10

The stock market’s four-day rally came to a halt as banks experienced a selloff, which pulled down the Dow Jones Industrial Average by 0.6% and the S&P500 by 0.58% on Tuesday. This sudden dip in the market was mainly caused by a drop in major financial institutions such as Wells Fargo & Co. and Citigroup Inc., whose gauge fell by 2%. Even regional lenders like First Republic Bank and Zions Bancorporation didn’t fare well, declining by at least 4.8%.

In contrast to the banks, Treasury prices climbed higher as softer data on job openings led to increased bets that the Federal Reserve may soon conclude its tightening campaign. According to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), vacancies at US employers decreased to the lowest level since May 2021. This news caused yields on two-year Treasury notes to fall by 14 basis points to approximately 3.8%. Swap contracts referencing Fed meeting dates lowered the odds of a quarter-point rate hike in May to just under 50%, down from about 60%.

In his annual letter to shareholders, JPMorgan Chase & Co.’s CEO Jamie Dimon warned that the effects of the recent US banking crisis, which caused market turbulence last month, will be felt for years. This gloomy forecast could be one of the reasons why investors chose to sell off bank shares. However, this doesn’t necessarily mean that the overall market will continue to decline in the long run.

Seven out of eleven sectors in S&P500 stayed in the negative territory, as four sectors dropped more than 1% on Tuesday, and Industrials tumbled with 2.25% for the day. This could be due to the news of the banking crisis, as well as other economic uncertainties. Meanwhile, the Nasdaq 100 fell 0.4%, and MSCI world index edged lower with a 0.2% loss on Tuesday.

Main Pairs Movement

On Tuesday, the value of the U.S. dollar dropped to its lowest point in two months due to disappointing economic data. This has led to speculation that the Federal Reserve may be close to the end of its efforts to tighten the economy. Meanwhile, other central banks are expected to raise interest rates to address inflationary pressures.

The DXY index fell below 101.5 after the release of weak JOLTs (Job Openings and Labor Turnover Survey) and Factory Orders data for February. As a result, the EURUSD pair rose by 0.50% and reached a daily high of 1.0973. The GBPUSD pair also climbed to its highest level since June, closing with a 0.70% gain for the day.

Gold prices saw a significant increase, rising by 1.80% on Tuesday due to the weakness of the U.S. dollar. The XAU/USD pair continued to rise following the release of poor U.S. macroeconomic data and eased concerns about central banks resuming aggressive monetary tightening. The pair increased by almost 1.9% during the first half of the American trading session and closed at $2020 on Tuesday.

Technical Analysis

EURUSD (4-Hour Chart)

Recent data from the United States has raised concerns about the labor market, as job openings reported in the JOLTs report dropped by 32,000 in February. This, along with the second consecutive month of declining Factory Orders, may indicate a cooling labor market. More data will be revealed later in the week with ADP Employment figures, Initial Jobless Claims, and the US Nonfarm Payrolls report. Investors are now expecting a possible pause in the tightening cycle of the US Fed at its May 2-3 meeting, with a 57% probability of a Fed pause.

The EUR/USD pair has risen above 1.0900 for the second consecutive day, reaching a daily high of 1.0973, supported by broad US Dollar weakness. The pair shows a triple bottom pattern on the daily chart, indicating a potential upward trend with a target of 1.1000. The next resistance levels to watch are 1.0973, 1.1000, and the year-to-date high at 1.1033. On the downside, support levels are at 1.0900 and the 20-day EMA at 1.0788. The EUR/USD pair remains bullish with further upside potential.

Resistance levels: 1.1000, 1.1034

Support levels: 1.0900, 1.0788

XAUUSD (4-Hour Chart)

As of Tuesday’s European session, the price of gold is experiencing slight losses at around $1,980, consolidating the losses from the beginning of the week. The precious metal has been negatively affected by the recent strengthening of the US Dollar and a pessimistic geopolitical headline during a sluggish Asian session. However, the price rallied earlier in the day and touched its highest level in over a year above $2,025 after the release of disappointing US Factory Orders and US JOLTS Job Openings in February. The US Dollar Index is experiencing slight gains around 102.20 after a significant fall on Monday, the largest since March 22. Looking ahead, Gold traders may be interested in the US Factory Orders for February, which are expected to be -0.5% compared to -1.6% previously.

The recent drop in Gold prices from a descending resistance line, hovering around $1,990, could result in further decline towards the $1,968 level. If the price falls below this level, it could reach $1,930 and $1,900. However, a rise above $1,990 is necessary to confirm the buyers’ control. Although the $2,000 level and an upward-sloping resistance line at $2,027 could be a significant challenge for the Gold bulls. Nonetheless, Gold prices are expected to stay stable in the long run, but a short-term pullback cannot be dismissed. The RSI sits at 67.

Resistance: 1996, 2027, 2050

Support: 1960, 1950, 1937

Economic Data

Sydney, Australia, April 3, 2023 – VT Markets, a global multi-asset broker, has announced its partnership with TradingView, the world’s leading provider of charting and analytical tools with over 50 million users.

The combination of VT Markets’ expertise in the financial industry along with TradingView‘s cutting-edge technological tools ensures that traders have access to the best resources available when making crucial trading decisions. Through this partnership, VT Markets’ clients will be able to benefit from TradingView’s comprehensive market research data and advanced financial visualisation tools. Additionally, TradingView provides a multitude of expert tools for traders, such as multiple chart types, customisable technical indicators, drawing tools, and live market updates.

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Treasury prices climbed higher on Monday as a US factory activity gauge contracted more than expected. This news tempered concerns about inflation that were fueled by OPEC+’s surprise decision to cut oil production. Let’s take a closer look at what happened.

In March, the Institute for Supply Management’s gauge of manufacturing activity dropped to 46.3. This was below the median estimate of 47.5 in a Bloomberg survey of economists. Any readings below 50 indicate a contraction, and both measures of new orders and employment decreased. As a result, two-year yields, which are sensitive to policy changes, reversed course after earlier climbing by as much as 11 basis points.

On Friday, the government will release its monthly employment report. This report will provide a more complete picture of the job market. It will be interesting to see how this report affects Treasury prices in the coming days.

Swaps linked to expectations of interest rates from the Federal Reserve indicated that a quarter-point hike in May was more likely than not. This news could also impact Treasury prices in the future.

In the benchmark, energy shares led gains in the S&P 500, with US crude hitting $80 a barrel. Seven out of eleven sectors in the S&P 500 stayed in the positive territory, as energy surged with 4.91% daily gain on Monday.

The Nasdaq 100 underperformed major benchmarks as Tesla Inc. sank on data showing its price cuts barely boosted deliveries. This news is noteworthy, as Tesla is often seen as a bellwether for the tech industry.

Main Pairs Movement

On Monday, the US Dollar experienced a 0.44% decline as investors anticipated a less aggressive stance from the Federal Reserve. The DXY index saw significant selling activity throughout the day, dropping below 102 during the start of the American trading session.

In contrast, the EURUSD pair saw a 0.55% increase in value, with the market mood improving during London’s trading session. The pair continued to rise and surpassed the 1.0900 level during the New York trading session. Similarly, the GBPUSD pair also gained strength following the start of the UK trading hour.

Gold prices rose by 0.78% as the Greenback weakened further after the release of disappointing US economic data. XAUUSD reached a daily high of $1990 before entering a consolidation phase and hovering in a narrow range between $1980 and $1986.

Technical Analysis

EURUSD (4-Hour Chart)

Last Friday, the EUR/USD closed at 1.0836, falling by 0.57% on the daily price range. However, demand for the US Dollar decreased after the opening of London’s trading session on Monday, leading to a recovery of the EUR/USD pair above the 1.07800 threshold, which is the lowest in a week. The pair is currently trading near a daily high of 1.09100 at 1.08891.

US Treasury yields increased ahead of Wall Street’s open, with the 10-year note currently yielding 3.50% and the 2-year note yielding 4.08%. S&P Global released the final estimates of the March Manufacturing PMIs for the Eurozone, with the German figure upwardly revised to 44.7 and the EU figure improving from the preliminary estimate from 47.1 to 47.3. The US official ISM Manufacturing PMIs is 46.3 lower than the forecasted 47.5, leading the Cable up to the daily high of 1.09166.

The 4-hour chart shows that buyers are struggling to regain control. Technical indicators changed course after nearing oversold readings and currently head north above their midlines, but with limited strength. The 100 SMA maintains its bullish slope below the aforementioned daily low, while the EUR/USD pair struggles to overcome a directionless 20 SMA. If the pair breaks through the immediate resistance level of 1.0910, buyers could have better chances. The RSI sits at 63.34.

Resistance levels: 1.0910 1.0950 1.1000

Support levels: 1.0830 1.0790 1.0750

XAUUSD (4-Hour Chart)

On Monday, the price of gold initially fell to around $1,955, but later rebounded and climbed above $1,980. This was due in part to the benchmark 10-year US Treasury bond yield dropping below 3.5% following the release of a negative US ISM Manufacturing PMI report, which helped XAU/USD gather bullish momentum. However, the metal’s gains were limited by concerns that China and Brazil may drop the US Dollar for cross-border trade. At the time of writing, the price of gold was trading at $1985.30.

On the technical side, the bears for gold are hopeful due to the bearish MACD signals and the clear downside break of a two-week-old ascending trend line. The sustained trading below the 200-HMA and 100-HMA confluence also favors the bears. However, the latest recovery remains uncertain unless the quote crosses the $1,960 support-turned-resistance line. Even if it does cross this line, the HMA convergence near $1,970 poses a challenge for the XAU/USD bulls. Furthermore, a downward-sloping resistance line from March 20, currently near $1,987, restricts the short-term upside of the Gold price. RSI sits at 58.12.

Resistance: 1990, 2000

Support: 1957, 1950, 1937

Economic Data

Dear Client,

To provide a favorable trading environment to our clients, VT Markets will modify the trading setting of US Shares on April 10, 2023:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

Friendly reminders:

All specifications of US Shares stay the same except leverage

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

Dear Client,

Please note that the following instruments’ trading hours will be affected by the upcoming holidays.

Note: The dash sign (-) indicates normal trading hours.

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

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US technology shares have continued to rally this week as concerns over inflation have eased following a modest increase in the Fed’s preferred measure of inflation in February. The rise in tech shares coincided with a rise in Treasury prices, which saw the two-year yield fall to around 4.05% while the 10-year maturity dipped to 3.48%. In addition, the US dollar gained strength against major currencies.

The personal consumption expenditures price index, which excludes food and energy, rose by 0.3% in February, slightly below the median estimate. However, the overall PCE price index rose by 5% from a year earlier, which is still above the Fed’s 2% target but down from January’s figures.

In the benchmark, the S&P 500 surged by 1.4% on the day, resulting in a weekly gain of 3.5%, the largest since November. The tech-heavy Nasdaq 100 also increased by 1.7%, enabling it to achieve its highest quarterly gain since June 2020.

All sectors in the S&P 500 stayed in positive territory, with Communication Services, Real Estate, and Consumer Discretionary getting the best performance among all groups, rallying by more than 2% on Friday.

Main Pairs Movement

On Friday, the US dollar strengthened due to slower growth in US consumer spending, leading to hopes that the Federal Reserve will not aggressively increase interest rates. The DXY index gained momentum after positive inflation data and closed at a daily high of 102.59.

Meanwhile, the EURUSD pair weakened and dropped below 1.0900 due to weaker Eurozone inflation numbers, while the US Core PCE Price Index was upbeat, putting pressure on the euro. The GBPUSD also slid by 0.4% on Friday, closing at 1.2329.

Despite the positive US PCE price index report, gold prices fell by 0.56% on Friday. The XAUUSD pair dropped sharply during the American trading session and closed at $1969 by the end of the day.

Technical Analysis

EURUSD (4-Hour Chart)

On Friday, the EUR/USD pair initially dropped to the 1.0870 area following the release of upbeat US Core Consumer inflation data, but later regained some traction and is currently trading at 1.0895 with a 0.08% daily loss. The pair remains in negative territory due to the overall strength of the US Dollar but has rebounded slightly as the greenback trimmed its intraday gains ahead of the US session.

In terms of economic data, the US Personal Consumption Expenditures (PCE) Price Index declined to 5% every year in February, and the annual Core PCE Price Index, which is the Federal Reserve’s preferred inflation gauge, also edged lower to 4.6%. This has fueled speculation that the Fed may pause its rate-hiking cycle in response to the recent turmoil in the banking sector, which has further boosted the US Dollar. Meanwhile, the Eurozone’s Harmonized Index of Consumer Prices (HICP) declined to 6.9% every year in March, but this data was largely ignored by investors.

From a technical perspective, the RSI indicator currently sits at 38, suggesting a loss of bullish momentum as it drops below the mid-line. The Bollinger Bands also indicate downside momentum, with the price falling toward the moving average, indicating that the downside trend may persist. In conclusion, as long as the 1.0874 resistance line holds, the market is likely to remain bearish. A four-hour close below 1.0800 could attract more sellers and push the pair lower to 1.0749.

Resistance: 1.0824, 1.0874

Support: 1.0780, 1.0748

XAUUSD (4-Hour Chart)

On Friday, the XAU/USD pair initially rose to a daily high of around 1,987 level after the release of lower-than-expected Core Personal Consumption Expenditure – Price Index (PCE) data from the US. However, during the US trading session, the pair retreated slightly and is currently trading at 1,976, indicating a 0.19% loss daily. The preliminary PCE price index data showed a slight decline to 4.6% YoY in February, indicating a slow fall in US consumer inflation and raising the possibility that the Fed will not take any action at its May meeting. However, the Fed officials’ statement that more work needs to be done to bring down inflation could act as a headwind for the precious metal Gold. The Fed Funds Future Curve, a market gauge of future Fed policy moves, is currently showing a 58% probability of a 0.25% hike in May versus a 42% probability of no change.

In terms of technical analysis, the RSI indicator is currently at 41, suggesting a bearish bias in the short-term outlook as the RSI is declining towards the mid-line. As for the Bollinger Bands, the price remained under selling pressure and moved lower, indicating the possibility of further downside movements. Overall, the market is expected to be slightly bearish as long as the resistance line at 1,999 holds. If the price move above this resistance level in the four-hour timeframe, it could pave the way for additional gains.

Resistance: 1975, 1988

Support: 1956, 1937

Economic Data