• Dollar retraces yesterday’s gains so far today
• Fed rate hike in the balance as we gear towards the key risk events this week
• Eurozone April Sentix investor confidence -8.7 vs -9.9 expected
• Eurozone February retail sales -0.8% vs -0.8% m/m expected
• US March NFIB small business optimism index 90.1 vs 90.9 prior
• SNB total sight deposits w.e. 7 April CHF 532.2 bn vs CHF 563.6 bn prior
• China March M2 money supply +12.7% vs +12.7% y/y expected

Markets:

• CHF leads, NZD lags on the day
• European equities slightly higher; S&P 500 futures flat
• US 10-year yields down 0.4 bps to 3.411%
• Gold up 0.5% to $2,000.28
• WTI crude down 0.3% to $79.51
• Bitcoin up 3.2% to $30,090

It was a largely quiet session as European traders returned from the Easter break, only to gain a sense of trepidation ahead of key US data to come later in the week.

Equities opened with some decent optimism but has seen gains slowly pared back, with US futures also little changed now. Meanwhile, European bond yields are holding higher in trying to play catch up to Treasury yields – which jumped after the US jobs report on Friday. The latter is not really doing much today after having held lower earlier in the session.

In FX, the dollar retraced its post-NFP gains with EUR/USD climbing back above 1.0900 and GBP/USD also pushing back above 1.2400 during the session. USD/JPY is down slightly by 0.3% to 133.25 but off the lows close to 133.00 from earlier in the day.

Meanwhile, commodity currencies were more mixed with USD/CAD flattish around 1.3500 and NZD/USD down slightly by 0.1% to 0.6210 as the kiwi continues to struggle somewhat since the drop last Thursday.

Elsewhere, gold is hugging the $2,000 mark again as traders continue to contemplate the rates and dollar outlook. Then, we have Bitcoin rising back above the $30,000 mark for the first time since June last year.

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

On the daily chart below for the Nasdaq
Composite, we can see that after bouncing on the 61.8% Fibonacci
retracement level, the market started a strong rally towards
the key 12274 resistance.

The break of the trendline of the bullish flag is also another confirmation
that the buyers are in control and want to extend the rally possibly above the
key resistance. The moving
averages have crossed to the upside on the flag breakout and the trend now is
firmly upwards. As the market now returns to the regular trading regime after
the Easter Holidays, we may see the buyers trying a breakout again.

Nasdaq Technical Analysis

On the 4 hour chart below, we can
see that after the rally stalled near the 12274 resistance and pulled back, it
found support at the red long period moving average. The buyers piled in there
and looks like the rally is restarting.

The NFP
report is also being interpreted as goldilocks since the jobs market remains
strong but the wage inflation keeps on moderating. The next big event is the US CPI report tomorrow where we may see
another big rally if the data misses expectations.

On the 1 hour chart below, we can
see that there’s a mini range between the 12100 resistance and the 50%
Fibonacci retracement level at 11915. For the buyers a break above the resistance
should give the conviction to target the 12274 level. On the other hand, the
sellers are likely to jump onboard in case the price falls below the 11915
support and then target the previous swing low at 11650.

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

• Prior 90.9

This is the 15th straight month that the index has come in below its 49-year average of 98, as business sentiment continues to dawdle to start the new year. NFIB notes that:

„While prospects for the economy continue to dim, the widely expected
recession has not yet appeared. Fourth quarter growth was shaded
down to 2.6%, inventory accumulation accounted for 60% of the total
growth. Weakness in residential construction took 1.2 percentage
points off of the growth rate and will continue to be a negative in the
first quarter numbers. Hiring plans fell to their lowest level since May
2020.

„There are major uncertainties ahead, most immediate is concern that
a banking crisis could develop. This usually results from too many risky
loans going bad, including auto and consumer credit. However, the
current issue resulted from poor risk management. The Fed kept rates
too low for too long, encouraging the growth of risky assets. Lots of
investments looked good with a 2% cost of funds and bank savings
paid virtually nothing.“

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

Let’s take a look at how the odds for the May decision have changed since two weeks back:

• 27 March: No change (85%), +25 bps (15%)
• 29 March: No change (59%), +25 bps (41%)
• 31 March: No change (42%), +25 bps (58%)
• 5 April: No change (58%), +25 bps (42%)
• 7 April*: No change (29%), +25 bps (71%)
• 11 April: No change (33%), +25 bps (67%)

*after the US non-farm payrolls

And as mentioned countless times since then, the shift in pricing is definitely no coincidence to the story in the bond market – where we are seeing 10-year Treasury yields continuing to hold above the key threshold around 3.30% for now.

In turn, we have also seen the dollar be brought towards the edge before finding a bid again after the jobs report on Friday last week.

As such, it’s all about the Fed outlook right now and expect the volatility to continue as we gear towards the key risk events lined up for this week here.

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

On the daily chart below for the
Dow Jones, we can see that after the major breakout of the trendline and the 32684 resistance, the market rallied strongly and
managed to break above the key 33538 resistance consolidating just above it.
The trend is now bullish as we can see from the moving
averages.

The market seems to be trading
again on the goldilocks scenario where inflation comes down on its own without
major losses in the labour market. In fact, the latest NFP
report showed moderating wage inflation with a tight jobs market. The next big
event is US CPI tomorrow.

Dow Jones technical analysis

On the 4 hour chart below, we can
see more closely the consolidation just above the 33538 resistance. This may be
due to both negative and positive news we got the last week coupled with the
Easter Holidays that led to lower liquidity and a more cautious price action.
Today European traders come back from the holidays and the market should come
back to its normal trading regime. The key releases to watch this week are the
US CPI tomorrow and the US Jobless Claims on Thursday.

In the 1 hour chart below, we can
see the mini range highlighted by the blue rectangle. The buyers will want to
see a break above the upper bound of the range to start piling in and extend
the move to higher highs with 34477 as the ultimate target. The sellers, on the
other hand, will want to see a break below the lower bound of the range to jump
in and target lower lows with 32684 as the major target.

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