Morgan Stanley says that the dollar’s dominant status as the world’s reserve currency is set to persist. That is in part due to its credible challengers, such as the Chinese yuan, being rather lacking at the moment.

While there have been some concerns about the dollar’s reign at the top recently, Morgan Stanley argues that the greenback can still hold its own. That despite worries about US debt levels and some signs of reserve managers diversifying away from the dollar.

„We expect USD’s dominant reserve currency status to endure despite ongoing challenges from an increasingly multipolar world. This supports our current preference for USD and should provide long-term support, though periods of weakness are to be expected on cyclical conditions and valuations.“

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

• Unexpected boost from industry and construction likely led to expansion in Q1
• But there is still no evidence of sustained improvement for the German economy
• Demand for industrial products domestically and abroad remains weak, continues to decline
• Higher rates and economic uncertainty are holding back investment
• Households are also still hesitant to spend
• It is unclear that the increase in economic output will continue in Q2

Germany continues to be the sick man of Europe at the moment and that perception has not changed to start the second quarter this year. Weak demand conditions and poor consumption activity are the two main problems. And that in general is a contributive factor for the ECB to look towards loosening policy sooner rather than later.

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

Yesterday, the Dow Jones extended the drop into new
lows despite a lack of bearish catalysts. In fact, we had pretty much a down
day for most markets with selloffs in the US Dollar, Treasury yields and some
commodities. On the geopolitical front, not much has changed as the Israeli
retaliation continues to be delayed and it’s not even sure if they will strike
at all now.

On the macro side, the market has priced out almost all the rate
cuts in 2024 as it expects just one cut later in the year. On the data front,
we don’t have much to work on in the next couple of weeks except the PCE, which
the Fed has already indicated to be slightly higher but mostly unchanged.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones has
been trading inside a rising channel and continued to diverge with the
MACD for a
long time. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. Recently, we got a breakout which opened the door for a
bigger correction into the 37128 level. The sellers managed to break the second
key support level
and will now target a drop into the third and last one at 37128. The buyers, on
the other hand, will need to break the current downward trend to start
targeting new highs.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that
the price has been getting rejected by the downward trendline and
the blue 8 moving average as the
sellers kept leaning on them with a defined risk above the trendline to
position for new lows. If we get another pullback, we can expect the sellers to
step in around the trendline again to position for a drop into the third key
support. The buyers, on the other hand, will want to see the price breaking
higher to invalidate the bearish setup and position for a rally into a new
all-time high.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that all
the rallies have been faded as the sellers kept on piling in around the
trendline as they continue to target the 37128 support. We can notice that we
are starting to see a divergence with the MACD which is signalling a weakening
bearish momentum. The price action might also form a descending
triangle so a break on either side will likely trigger a
sustained move.

Upcoming Events

Today we get the latest US Jobless Claims figures.

This article was written by FL Contributors at www.forexlive.com.

Headlines:

• Sterling climbs on slightly stronger UK inflation data
• US futures pare losses as risk mood holds up for now
• Japan chief Cabinet secretary says closely watching FX moves, prepared for full measures
• UK March CPI +3.2% vs +3.1% y/y expected
• Eurozone March final CPI +2.4% vs +2.4% y/y prelim
• US MBA mortgage applications w.e. 12 April +3.3% vs +0.1% prior
• NZ statistics office owns up to inflation data release error
• Japan monthly visitors hit a record high in March, crosses 3 million for first time ever

Markets:

• NZD leads, USD lags on the day
• European equities higher; S&P 500 futures up 0.3%
• US 10-year yields flat at 4.655%
• Gold up 0.3% to $2,388.80
• WTI crude down 0.7% to $84.77
• Bitcoin flat at $63,053

The dollar is taking a bit of a breather today as it slacks against the rest of the major currencies bloc. That said, it is still in a solid position as traders are still digesting the events so far in April.

The pound was a decent mover, helped by a slightly stronger UK inflation report. GBP/USD nudged up from 1.2420 to 1.2480 but failed to clear the 100-hour moving average. The key technical hurdle is where sellers are holding, with price now back down slightly to 1.2455 on the day.

Besides that, EUR/USD is up 0.2% to 1.0640 with USD/CHF down 0.2% to 0.9107 currently. The moves are relatively light, not really suggesting much of a turnaround in the recent dollar momentum.

AUD/USD is seen up 0.4% to 0.6425 with NZD/USD up 0.5% to 0.5908 after the NZ inflation data earlier in the day. A better risk mood is also helping as US futures pared early losses to sit a little higher now. European indices are also looking to bounce back from yesterday’s fall, with French stocks leading the way. The CAC 40 is up a little over 1% with the DAX up 0.5%.

Other than that, there’s not much else to really scrutinise in markets so far today. It’s a pause in the dollar momentum and that’s the main takeaway.

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

Copper continues to be
supported by favourable fundamentals although the latest rally is starting to
look a bit exhausted. The supporting factors include the recent beat in the Chinese PMIs and the US ISM Manufacturing PMI, with the latter jumping into
expansion for the first time since 2022. Moreover, we have the PBoC expected to
deliver more policy support this year while the other central banks continue to
foresee rate cuts at some point although they are willing to keep rates higher
for longer if needed. The current environment should be good for growth, so the
things to watch will be signs of marked deceleration in growth indicators or
increased risks of rate hikes.

Copper Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Copper has been
struggling to break the key 4.35 level. From a risk management perspective, the
buyers will have a much better risk to reward setup around the 4.18 level where
we can also find the confluence of the 50%
Fibonacci retracement level,
the red 21 moving average and the trendline. The
sellers, on the other hand, will likely step in around these levels to position
for a drop into the trendline and eventually target a break below it.

Copper Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price has
been diverging with the
MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, the target for the pullback would come right around
the base of the divergent formation near the 4.18 support,
although the price will need first to break below the black minor trendline to
confirm it.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price rejected the 4.35 level and it’s now falling back to the minor trendline.
The buyers will have another opportunity to step in around the trendline to
position for a break above the 4.35 resistance. If the price were to break lower
though, the sellers will gain control and take the price into the 4.18 support.

Upcoming Events

Tomorrow we get the latest US Jobless Claims figures.

This article was written by FL Contributors at www.forexlive.com.

• Prior +0.1%
• Market index 202.1 vs 195.7 prior
• Purchase index 145.6 vs 138.7 prior
• Refinance index 500.7 vs 498.3 prior
• 30-year mortgage rate 7.13% vs 7.01% prior

Despite a jump in the rates, mortgage applications in the past week rebounded a fair bit. Both purchases and refinancing activities also climbed with the latter index at its highest since May last year.

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

Iran-Israel tensions are casting a dark shadow over the market, providing what can be argued as a timely retracement in equities and risk trades. But whenever geopolitics tend to get involved, the first thing that always comes to mind for me is the saying buy value, sell hysteria.

It’s a tale as old as time and it works for almost anything as long as there is fear in the picture. If a meteor is said to be headed to earth and the market crashes, it’s the best time to buy the dip. If there’s a comet projected to hit earth and wipe out humanity, you should buy the dip anyway. At worst, we all die together. But by any chance the comet misses and we all survive, guess what? The world will carry on as it did before.

As much as tensions are staying heated when it comes to Iran and Israel currently, there’s every likelihood that at least one side does not want a war. I mean, we’ve gone through the whole Russia-Ukraine debacle two years ago and I preached the exact same thing here.

But putting that into today’s market, things might be a little different. We’ve seen stocks rally in rather one-sided fashion since the end of October. And this is perhaps as good an excuse as any to come off the boil a little. I mean, it is also coinciding with more stubborn inflation pressures.

Over time, the market is always quick to forget and move on. And in this day and age, it happens more quickly than ever given the information echo chamber. So, yes the tensions are high when it comes to Iran and Israel now. But this is an episode that the market will not care about in a few months‘ time, let alone a year.

And that’s what you should be looking at. That is to buy value, sell hysteria.

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

The recent price action in
Crude Oil indicates that the market needs some rest as we haven’t seen a
sustained rally despite the big geopolitical risk in the Middle East between
Israel and Iran. Overall, the fundamentals remain supportive for the market as
we’ve been seeing a pickup in economic activity, although the expectations for
rate cuts continue to dwindle. The technicals will be important to monitor as a
drop below the key $83 support zone could start to signal a turnaround in the
bullish trend.

WTI Crude Oil Technical
Analysis – Daily Timeframe

On the daily chart, we can see that Crude Oil got
stuck in a consolidation lately with a slight bearish tilt as the price
continues to pull back into the key $83 support zone.
That’s where we can expect the buyers to step in as they will also find the confluence of the trendline, the red
21 moving average and the
38.2% Fibonacci retracement level.
The sellers, on the other hand, will want to see the price breaking lower to
invalidate the bullish setup and position for a drop back into the lows.

WTI Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price is
breaking below another minor trendline which should see some sellers piling in
to target a drop into the major trendline for a pullback. There’s not much else
we can glean from this chart, so we need to zoom in to see some more details.

WTI Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
clearly the consolidation that’s been going on since last Monday. We can also
see that we have a downward counter-trendline where the sellers piled in for a
better entry to target a drop into the major trendline.

Upcoming Events

Tomorrow we get the latest US Jobless Claims figures.

This article was written by FL Contributors at www.forexlive.com.

Headlines:

• Dollar continues to stay in prime position
• Treasury yields nudge higher on the session
• ECB’s Rehn reaffirms June rate cut if there are no inflation setbacks
• UK February ILO unemployment rate 4.2% vs 4.0% expected
• Germany March wholesale price index +0.2% vs -0.1% m/m prior
• Germany April ZEW survey current conditions -79.2 vs -76.0 expected
• Eurozone February trade balance €23.6 billion vs €11.4 billion prior
• US trade chief says ‚taking a serious look‘ at tools to deal with China
• Xi says China and Germany have huge potential for win-win cooperation

Markets:

• EUR leads, AUD lags on the day
• European equities lower; S&P 500 futures up 0.1%
• US 10-year yields up 2.3 bps to 4.650%
• Gold down 0.4% to $2,371.94
• WTI crude down 0.2% to $85.19
• Bitcoin down 0.9% to $62,610

The dollar isn’t flexing its muscles too much in European trading today. However, it remains in pole position on the grid following the moves since last week. There is no major extension of gains but the dollar is still poised when you analyse things by the charts.

EUR/USD is only up 0.1% to 1.0632, stuck within a narrower range today. But the pair has the makings of a drop towards 1.0500 next in the bigger picture. Meanwhile, higher Treasury yields is underpinning USD/JPY with the pair seen up 0.2% to 154.65.

The UK labour market report today was rather mixed, leaning slightly on the softer side. The jobs data was weak but wages are staying high. It barely produced much of a reaction in the pound though, with cable looking flat at 1.2450 on the day.

Elsewhere, the aussie and kiwi are laggards amid a softer risk mood and some selling in the Chinese yuan during Asia trading.

In the equities space, European indices are all down over 1% in catching up to the losses in Wall Street yesterday. But we are seeing a slight turnaround in the mood as US futures are now positive, with S&P 500 futures up 0.2%.

As for commodities, gold is down slightly amid a choppier start to the week for precious metals. Bitcoin is also down and contesting support in and around the $61,000 mark on the day.

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

The Finance
Magnates Africa Summit (FMAS:24) right around the corner, offering a wide range
of networking and engagement opportunities for participants. Held on May 20-22 in
Sandton City, South Africa, the premium event will aim to expand attendees’
networks and gain valuable insights into the industry’s latest trends and
developments.

Held for the
second straight year at the Sandton Convention Centre, the event will look to
bridge both the B2C and B2C space. This includes connecting world-leading
brokers, brands, and more with regional and local providers, as well as a
sizable pool of new and existing retail traders.

FMAS:24 will be here
before you know it – if you have not already done so, head on over to the
registration page for the event and sign-up
today! Registering online ensures you can skip the wait and queue on-site.

Attendees at
this premium event can take advantage of a wide range of networking
opportunities, featuring face-to-face engagement and more. With over 3,000
attendees, 120 exhibitors, 150 speakers, and more, expect anything to happen on
the exhibition floor at FMAS:24.

All
participants will have countless chances to network, connect, and meet the
following participants:

• Forex/CFD
  Brokers
• Institutional
  Brokers
• Affiliates
  & IBs
• Traders
  & Investors
• Educators
  & Market Experts
• Fintech
  & Payments Brands
• Crypto &
  Digital Assets Businesses
• Technology
  & Liquidity Providers
• Press/Media
• Regulators
• Start-ups
• Investors/VCs

How to
Prepare for FMAS:24

Preparing
adequately for networking at events such as FMAS:24 can significantly enhance
one’s experience and yield fruitful connections. This includes some practical
tips to help attendees make the most out of their networking endeavors at the
Finance Magnates Africa Summit.

It’s
essential to enter the summit with a clear understanding of one’s objectives.
Whether it’s seeking potential business collaborations, exploring investment
opportunities, or simply expanding professional networks, having a defined
purpose can guide interactions and ensure meaningful engagements.

Engaging in
conversations with fellow attendees is key to building connections. Initiating
discussions in a friendly and approachable manner can open doors to valuable
opportunities. Remember to introduce oneself succinctly, highlighting relevant
background information and areas of interest.

Active
listening is a crucial aspect of effective networking. Showing genuine interest
in others‘ perspectives by asking open-ended questions and attentively
listening to their responses can foster deeper connections. Demonstrating
empathy and understanding can go a long way in building rapport with fellow
professionals.

Register
Today for the Biggest Event of the Year in Africa!

Exchanging
contact information with individuals of interest is vital for maintaining
connections beyond the summit. Whether it’s through traditional means like
exchanging business cards or connecting on professional networking platforms,
staying in touch can facilitate future collaborations and partnerships.

Following up
with newfound connections post-summit is essential for nurturing relationships.
Sending personalized follow-up emails or messages expressing gratitude for the
interaction and interest in further collaboration can solidify connections made
during the event.

Additional
Benefits to Attending FMAS:24

Attending
networking events and receptions held in conjunction with the summit provides
additional opportunities for mingling with industry peers in a more relaxed
setting. These informal gatherings offer a conducive environment for building
relationships outside the confines of the expo hall.

Remaining
authentic and genuine in interactions is paramount to successful networking.
Authenticity fosters trust and credibility, laying the groundwork for
long-lasting professional relationships. Being oneself and showcasing genuine
enthusiasm for the finance sector can resonate positively with fellow
attendees.

In
conclusion, attendees of the FMAS:24 stand to benefit greatly from effective
networking strategies. By approaching interactions with purpose, engaging in
meaningful conversations, and nurturing connections beyond the event,
professionals can leverage the summit as a platform for professional growth and
collaboration. With the right mindset and proactive approach, the possibilities
for forging valuable relationships are endless.

This article was written by Jeff Patterson at www.forexlive.com.