• AUD/USD down to six-week lows after CPI data earlier
• Dollar teeters on the edge against the euro, pound again
• Advisors have lined up potential purchasers of new First Republic stock – report
• BOJ has no reason to move this week, says Japan’s former top currency diplomat
• Germany May GfK consumer sentiment -25.7 vs -27.9 expected
• France April consumer confidence 83 vs 81 expected
• UK April CBI retailing reported sales 5 vs 0 expected
• Switzerland April Credit Suisse investor sentiment -33.3 vs -41.3 prior
• US MBA mortgage applications w.e. 21 April +3.7% vs -8.8% prior

Markets:

• EUR leads, AUD lags on the day
• European equities lower; S&P 500 futures up 0.1%
• US 10-year yields up 3 bps to 3.425%
• Gold down 0.1% to $1,995.18
• WTI crude down 0.5% to $76.70
• Bitcoin up 3.5% to $28,959

There weren’t many headlines during the session but there were some decent market moves all around.

It started off with a bit of a mixed picture in equities, with European stocks looking heavy while US futures were buoyed by tech shares. Microsoft reported stronger profits than estimated while Alphabet announced a $70 billion stock buyback and that propped up Nasdaq futures before a bit of a pullback in gains.

Bond yields were also higher but gradually slumped during the session before a late jump after some potential good news for First Republic Bank. 2-year Treasury yields slowly trickled down from 3.95% to 3.89% before jumping up to 3.96% on the headline.

USD/JPY also got a jolt higher as such, erasing losses from 133.30 to around 133.70 levels at the moment.

There were other more interesting moves in FX though, with EUR/USD climbing all the way from 1.0990 in the handover from Asia all the way to 1.1060. There are plenty of large option expiries in the pair, with one layered around current levels at 1.1030-45 so just be wary of that.

The pound also capitalised on the dollar softness with GBP/USD rising from 1.2430 to a high of 1.2490 during the session.

The aussie and the kiwi failed to find much respite though, with sentiment in the former being more of a drag. AUD/USD slumped to 0.6600 and fresh six-week lows after markets are now convinced that the RBA will not raise rates in May, following softer CPI data earlier in the day.

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

It looks like the big boys in the US may be called in for one last favour to First Republic. According to sources at CNBC, the supposed proposition will go something like this:

„Purchase bonds from First Republic at above-market rates for a total loss of a few billion dollars – or face roughly $30 billion in FDIC fees when First Republic fails.“

We are seeing bond yields jump on the headline, with 2-year Treasury yields now up to 3.95%:

Mind you, this is just a potential good news for First Republic. It is not a guarantee whatsoever that things will play out in this manner. But for now, it seems to be providing a brief respite for risk sentiment.

/US Dollar

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

• Prior -8.8%
• Market index 216.9 vs 209.2 prior
• Purchase index 169.1 vs 161.6 prior
• Refinance index 457.6 vs 449.8 prior
• 30-year mortgage rate 6.55% vs 6.43% prior

Despite higher rates in the past week, US mortgage activity picked up slightly after a sharp fall in the week before that. Both purchases and refinancing were higher but overall, the levels are still very low following the massive slump last year.

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

For dollar bulls, they have survived this instance a couple of times already in the past two weeks. I have been posting about these levels previously below:

• Dollar on the brink once again (13/4)
• Dollar pushed to the limit, narrowly holds its ground (17/4)

The dollar had recovered some poise in the past week but is seen slipping again this week and we are running up against the key technical points highlighted in the above posts.

EUR/USD is once again trying to hold on to a firm break above 1.1000 with key weekly resistance still seen around 1.1033 for now. Adding to that is the recent highs around 1.1067-75 that is helping to keep the dollar from breaking apart.

Meanwhile, GBP/USD is trading up by 0.5% to 1.2470 now (the high earlier clipped 1.2485) with buyer setting their sights on the 1.2500 mark once again. The figure level remains a key challenge on both the daily and weekly charts and it will require a firm break above that to really convince of a further upside extension towards the May highs from last year around 1.2660 next.

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

On the daily chart below, we can
see that the big bullish momentum since the collapse of the Silicon Valley Bank
has ended. The market now is pulling back after such a strong rally and the
most likely support is the trendline where we will also find the 50%
and the 61.8% Fibonacci
retracement levels. The moving
averages are also on the verge of a cross to the downside as the consolidation
around the 2000 level has been going on for over a week.

XAUUSD technical analysis

On the 4 hour chart below, we can
see that the price has been diverging with the MACD trading within the rising
channel. Now that the price has broken out, we are likely to see a correction
to the base of the channel which comes exactly at the 50% Fibonacci level. At
the moment we are seeing a rangebound price action with the support at the 1982
level holding strongly.

On the 1 hour chart below, we can
see the current range between the support at 1982 and the resistance at 2022. The buyers will need to
see the price breaking above the top of the range and entering again within the
channel to pile in and target the high at 2087.

The sellers, on the other hand,
will want to see the price breaking below the support at 1982 to target the 50%
Fibonacci level. Tomorrow we will see the US Jobless Claims report, which has been a market
moving event lately. If the data miss expectations, we should see a rally in
gold while a beat should send the price lower.

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