• All eyes on the US CPI data later today
• Dollar steady with major currencies mostly little changed on the day
• French stocks at record high as European equities maintain the optimism
• BOJ’s Uchida: Will continue monetary easing to achieve price stability target
• US MBA mortgage applications w.e. 7 April +5.3% vs -4.1% prior

Markets:

• AUD leads, GBP lags on the day
• European equities slightly higher; S&P 500 futures up 0.1%
• US 10-year yields up 1.7 bps to 3.450%
• Gold up 0.2% to $2,007.88
• WTI crude flat at $81.45
• Bitcoin down 0.6% to $30,009

It was a largely quiet session and understandably so, as markets are sitting on edge awaiting the US CPI data release later today.

There isn’t much to really comment as it was a sideways session with little appetite for any market moves while there were no major economic data releases in Europe as well.

Major currencies are little changed with the dollar keeping more mixed and relatively steady, after a bit of a retreat yesterday. Meanwhile, the bond market also isn’t hinting at much with Treasury yields not much changed. 2-year yields are seen around 4.05% while 10-year yields in the US are still holding just above the key threshold of 3.30% – now at 3.45% on the day.

In the equities space, there is some mild optimism as European stocks are inching higher. The CAC 40 index is at fresh record highs while the DAX itself is also trading to its highest levels for the year. The gains are modest at best though, as there is still some caution in the air for now.

All eyes are fixated on the US consumer price inflation report (and Fed minutes) to follow and that will set the tone for the remainder of the week.

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

• Prior -4.1%
• Market index 229.5 vs 217.9 prior
• Purchase index 179.6 vs 166.6 prior
• Refinance index 477.5 vs 477.2 prior
• 30-year mortgage rate 6.30% vs 6.40% prior

The climb down in the average interest rate for the most popular US home loan (as seen below) is continuing to benefit mortgage activity in general over the past two months or so. This time around, purchase activity is seen picking up substantially and that is helping to give a bit of a lift to the market after a rather awful last one year.

/US Dollar

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

On the daily chart below for USDCAD, we can
see that after breaking the strong support at 1.3664, the pair just melted
for hundreds of pips. We got a bounce recently as bad US data started to give
the market recession vibes and the US Dollar is the go-to currency in case a
recession unfolds.

The NFP report last Friday surprised again though showing
strong labour market data. We’ve got some choppy price action afterwards due to
Easter Holidays. Today is the US
CPI Day, and
the market is unlikely to move much ahead of it.

USDCAD technical analysis

On the 4 hour chart below, we can
see that the recent bounce stalled right at the previous swing level at 1.3553
where we also had the confluence with the 38.2% Fibonacci
retracement level. The moving
averages have crossed to the downside again after the price rejected the
resistance, so the sellers are in control for now.

The first natural target should
be the low at 1.3406 with more to come in case the sellers manage to break
below it. Today’s data is likely to decide the next big move. A miss to the
expectations should favour the sellers, while a beat should give the buyers
some control.

On the 1
hour chart below, we can see a nice setup for the sellers in case the price
pulls back to the 1.3480 level where we have the trendline, the swing level resistance and
the 50% Fibonacci retracement level.

All this
confluence in the same spot makes that zone a strong resistance and gives the
sellers a nice barrier where they can lean onto and have a defined risk just
above it. The buyers, on the other hand, will want to see the price to break
above this strong area to start piling in and target the resistance at 1.3553.

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

On the daily chart below for
AUDUSD, we can see that the buyers couldn’t break above the 0.6781 resistance and the 38.2% Fibonacci
retracement level. That’s where bad US economic data started
to come in and the market began to have recessionary vibes. In such instances,
the US Dollar is the go-to currency, especially against the commodity
currencies like the Australian Dollar.

The moving
averages have crossed to the downside, although not much yet, but this may be a
bad omen for the buyers. The market today will be focused on the US
CPI report
and surprises are likely to cause big movements.

AUDUSD technical analysis

On the 4 hour chart below, we can
see that the price was trading in a channel rallying into the 0.6781
resistance. As the breakout failed, the price fell strongly, and it even broke
below the lower bound of the channel. The moving averages are crossed to the
downside and the red long period moving average will act as resistance now.

The natural target for the
sellers is the previous low at 0.6563. We should see the sellers piling in
aggressively in case the CPI beats expectations, while the buyers are likely to
regain control in case the CPI misses.

On the 1 hour chart below, we can
see that at the moment there’s a bit of consolidation ahead of the CPI report.
The market is erring on the cautious side as surprises can cause aggressive
movements. This little range can be a good starting point for both buyers and
sellers.

A break above would be bullish
and give the buyers the conviction to target the resistance at 0.6781. On the
other hand, a break below would give the sellers control and the target would
be the support at 0.6563.

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

Gold is catching a second wind in the past month or so, after having seen the January seasonal rally wane in February trading. The banking turmoil saw gold benefit from being a traditional safe haven asset and as the Fed outlook was dented, gold also benefited from markets no longer seeing an aggressive tightening path this year.

That culminated in a push back above the $2,000 mark last week and prices are still holding on to that for the most part. There is a slight state of flux so far this week but if you look at the near-term chart, buyers are definitely showing up where it matters most.

The 200-hour moving average (blue line) is where buyers leaned on before running into familiar resistance from the 100-hour moving average (red line) yesterday. The latter was broken through earlier today though, as gold buyers establish a more bullish near-term momentum just above the $2,000 mark for now.

As such, those will be key lines in the sand in determining the near-term momentum bias ahead and in the aftermath of the US CPI data later.

In the bigger picture though (going back to the weekly chart), gold is trying to stay poised in scaling to the 2020 and 2022 highs around $2,070-75. That will be the biggest and most important resistance region for gold in trying to establish a stronger upside break.

It seems almost likely that markets are becoming increasingly convinced that such a break is more of a question of when than if, considering that major central banks are slowly heading to the sidelines.

If the economic downturn can be managed gracefully and inflation becomes less of a problem in the year to come, the idea of rate cuts might start coming into the picture and that will be yet another major boost for gold down the road.

But for now, it’s baby steps. The first immediate hurdle will come from the US CPI data later today. If we do see a softer set of inflation numbers, that will certainly validate the recent upside push in gold with buyers potentially poised to test the key resistance region above.

However, on the flipside, a stronger set of inflation numbers will more than likely weigh on gold back under $2,000 as buyers head back to the drawing board – awaiting for the next key event to validate their long-term view.

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