The Kremlin itself has responded by saying that „we consider it an attempt on Putin’s life“ and that „we reserve the right to respond when and however we see fit“. Adding that there were two drones used in the attempted attack and that Putin had not been injured.

There are vides circulating around social media showing smoke from the Kremlin at night. But make what you will of it and we shall see how Ukraine responds to this later today.

JUST IN – Russia says Ukraine tried to hit Kremlin with drones overnight in an assassination attempt on Putin.pic.twitter.com/xAS0BtTDzs

— Disclose.tv (@disclosetv) May 3, 2023

This article was written by Justin Low at www.forexlive.com.

• Prior +3.7%
• Market index 214.4 vs 216.9 prior
• Purchase index 165.8 vs 169.1 prior
• Refinance index 461.2 vs 457.6 prior
• 30-year mortgage rate 6.50% vs 6.55% prior

Despite a drop in rates in the past week, mortgage activity declined mainly due to a slump in purchases – which were offset slightly by a rise in refinancing activity. Overall, it still points to weaker conditions in the mortgage market as it has been over the past year already since the Fed began aggressively hiking rates.

This article was written by Justin Low at www.forexlive.com.

It feels like a bit of déjà vu for the Fed as US regional banks come under pressure once again before they announce their next policy decision.

It will be a case once again where markets will look to the Fed decision and see if Powell will offer up any relief after the jitters from yesterday. The first thing traders and investors will be watching is the interest rate decision and whether the Fed will hike by 25 bps or not.

If the Fed does hike by 25 bps, the initial kneejerk reaction could see another heavy selloff in regional banks. At this point, markets can argue that policymakers will have to draw a line somewhere after yet another bank (First Republic) failed and there are increasing worries involving other banks like PacWest and Western Alliance.

Adding to that argument is the fact that the Fed tends to pacify markets and go with „what is expected“, so as to not upset the balance and order of things. This has been the mantra ever since Yellen took over and Powell has continued with that all through his tenure so far. That should be no different this time.

And if you take a peek through the looking glass, perhaps the decision to hike by 25 bps is the lesser of two evils.

Let’s say that the Fed chooses not to hike at all today. Firstly, that creates a serious credibility issue as it means that their resolve to combat inflation has wavered. That is not something markets would like to see at any point, I would say.

Then, what happens if regional banks still end up getting clobbered once we get to the Wall Street close? There is no fallback for the Fed in this instance. They will end up losing both credibility on the inflation front and also failing to appease markets as regional bank fears linger.

Whereas if they do hike by 25 bps, there is still that and Powell can then try his best to soothe markets by implicitly hinting at a pause in the tightening cycle.

It’s sort of a damned if you do, damned if you don’t kind of situation. I shared some other thoughts on the Fed decision here. What do you think the Fed should do and would do later today?

This article was written by Justin Low at www.forexlive.com.

On the daily chart below, we can
see that the price bounced near the key support at 0.6563 and eventually spiked
up as the RBA surprised with an interest rate hike. The price action remains
choppy as central banks are near the end of their tightening cycles and the
market is uncertain on what’s next.

The economic data keeps sending
conflicting messages and the volatility is high around the regional banking
woes in the US. AUD is sensitive to risk sentiment, so traders will need to
ride the ups and downs in the market’s mood.

AUDUSD
technical analysis

On the 4 hour chart below, we can
see more closely the ugly choppiness in the pair in the last 2 months. This may
be a big double
top pattern
within a correction which could be a stronger signal of a continuation to the
downside, but the risk sentiment should turn sour to make the price to break
below the support and increase the bearish momentum. Today we have the ISM Services PMI and
the FOMC policy announcement, so watch out.

On the 1 hour chart below, we can
see that the price is now consolidating in a little box testing the trendline and the 61.8% Fibonacci
retracement level. This is where the buyers should step in to
try another push to the upside. The sellers, on the other hand, will want to
see the price to break below the trendline to start piling in and target the
support at 0.6563 or even a new lower low.

This article was written by ForexLive at www.forexlive.com.