• We expected a shallow, long recession back in November
• Now we are forecasting modest, but positive growth
• There has been greater resilience in the economy than expected
• But inflation has also come in higher than expected
• However, we have good reasons to expect inflation to fall sharply in the coming months
• That should begin with the April number, to be released on 24 May
• Risks to inflation are skewed significantly to the upside
• Our commitment to 2% inflation is unwavering
• Full speech

These aren’t anything that we don’t already know. However, he is putting a good deal of emphasis on the upcoming CPI data later this month. That will be one to watch and while base effects are something to watch out for, we will see if the BOE can rely on price pressures to fall in the months ahead to head to the sidelines.

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

On the
daily chart below for USDJPY, we can see that the price found support at the trendline and the 133.77 level. The moving
averages remain crossed to the upside which keeps the uptrend intact. We can
also notice that the market is forming an ascending
triangle, which is generally followed by big moves once the price breaks out on
either side.

The
culprit for this USD/JPY rally is the rise in the Treasury yields due to the
recent better than expected data and rising long term inflation expectations in
the University
of Michigan report. Fed Chair Powell once mentioned that they are
looking at those expectations for their policy decision, so the bond market
reacted accordingly.

USDJPY
technical analysis

On the 4
hour chart below, we can see that after breaking above the 135.09 resistance, the price extended the rally
towards the 136 handle. Yesterday, US
Retail Sales beat expectations and gave the USD another boost
for a run towards the 137 level. The moving averages will act as resistance now
and we should see new higher highs unless the Jobless Claims tomorrow show a big miss to the
expectations or Fed Chair Powell on Friday sounds dovish.

On the 1
hour chart below, we can see that we have a trendline supporting this rally and
that the price bounced from a resistance-turned-support during the APAC
session. We can also see that we have a divergence with the MACD which is generally a signal for
weakening momentum and it’s often followed by pullbacks or reversals.

If we do
get a pullback, the buyers should lean to the support zone at 136.25 where they
will also find the trendline and the red long period moving average for further
confluence. The sellers, on the other hand,
will want to see the price breaking below that support zone to pile in and push
the price towards the 135 handle.

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

• The market mood remains fairly mixed so far today
• There is a barrage of 7 Federal Reserve speakers due Tuesday, NY’s Williams among them
• Central banks have lost a degree of trust, says ECB’s Makhlouf
• UK April payrolls change -135k vs 31k prior
• Germany May ZEW survey current conditions -34.8 vs -37.0 expected
• Eurozone Q1 GDP second estimate +0.1% vs +0.1% q/q prelim
• IEA warns latest oil price drop is running against backdrop of a supply crunch in 2H 2023

Markets:

• CHF leads, AUD lags on the day
• European equities little changed; S&P 500 futures down 0.1%
• US 10-year yields down 2.9 bps to 3.479%
• Gold down 0.7% to $2,005.98
• WTI crude down 0.3% to $70.92
• Bitcoin down 1.0% to $27,088

It was sideways session as markets are looking fairly tentative after the slightly optimistic start to the new week yesterday.

There wasn’t much meaningful headlines but we did get a bit of a red flag from the UK jobs data, where payrolls declined for the first time since February 2021 as unemployment claims also ticked higher. That might be a sign that the economic weariness is starting to weigh on labour market conditions.

The pound dropped initially on that with GBP/USD falling from 1.2510 to 1.2465 as the dollar also gained some ground amid a more cautious risk mood. But the pair bounced as the dollar surrendered gains, rising back up to 1.2530 currently – little changed on the day.

The greenback saw gains evaporate as equities pared early losses as well during the session. But the overall mood remains more pensive with US futures also marginally lower at the moment.

EUR/USD nudged a little higher from 1.0870 to 1.0900 briefly before settling just below that. Meanwhile, AUD/USD is staying pressured and down 0.4% to 0.6670 after a brief rebound to 0.6690 earlier in the session.

The moves in markets are rather mixed with commodities all mostly lower, with oil moving down after a positive start to the day and precious metals lagging. WTI crude fell to $70.55 before paring some losses back to $70.90 levels now while gold is trailing down by 0.7% to near $2,006 and silver also down 1.4% to $23.77 currently.

It’s now over to US retail sales and Fedspeak to see if the mood music will change in North America trading.

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

Everything
is easy when you’re Adobe. If your earnings report is not too good, you can use
Photoshop and then say that this was not photoshopped; who can argue? Adobe
looks like one of these unique flagship companies with no competitors. But is
it good or bad? Let’s look at charts for Adobe stock and investigate what
analysts think about its future.

Adobe suffered
the fate of many tech companies that ascended to the top during the pandemic
and then faced a rapid decline. Of course, Covid-19 wasn’t an event easy to
forecast, but there’s a large number of things you can predict. The US
economic calendar is a trading tool that helps you with this as it
includes all the significant financial events and lets you utilize them to
forecast subsequent market movements.

In the
last year, there has been almost no trace of Covid consequences, but Adobe
shares haven’t demonstrated stability as well as most of the world
markets.

At the
same time, the pandemic and the world crisis didn’t make Adobe products like
Photoshop, Lightroom, or Acrobat less relevant. The advantages of all these
programs didn’t disappear. Moreover, many digital workers and companies have no
other alternatives. Especially after the announcement about the acquisition of
Figma, a top-rated and relatively cheap service that was supposed to fight
evil, not join it (disclaimer: this deal between Adobe and Figma is not
finished yet because of the regulators’ investigation). It seems Adobe doesn’t
have too many rivals, and there are now even fewer.

Another
significant moment is Adobe’s advanced cloud subscription model. Combined with
a large customer base and high subscription prices, it allows for a stable flow
of profit. The last earnings report proves it. In Q1 2023, EPS and revenue
turned out better than analysts’ expectations – 3.3% higher for EPS and 0.7%
for revenue. Additionally, Adobe’s reported revenue became record-breaking –
13% YoY in constant currency. But we should also pay attention to slowing down
revenue growth compared to previous years.

The
company hasn’t forgotten about trends like AI technologies and actively
integrates them into its products. For example, Adobe released Firefly, the
fertile AI field that allows users to edit images by typing a text.

Many
analysts believe that Adobe is a strong business that might be an excellent
long-term investment. The consensus forecast for this tech giant is +15% in the
next 12 months.

But
don’t hurry to add these stocks to your portfolio. Remember that before buying
or selling any assets, you should do your own analysis.

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

On the daily chart below for
AUDUSD, we can see that the price recently sold off again from the top of the
range and the 38.2% Fibonacci
retracement level. We’ve been stuck in this range since the
collapse of the Silicon Valley Bank as the market is still uncertain if the
events will help the Fed to bring inflation down fast to target without a major
hit to the economy, or if we will have a worse hard landing than expected.

The
sellers, nevertheless, keep leaning on the resistance and they’ve been quite successful
for now. Needless to say, that an eventual breakout on either side of the range
should lead to big moves and traders should be prepared for that.

On the 4 hour chart below, we can
see that the trendline that was supporting the rally
towards the resistance got broken last Thursday and the sellers immediately
piled in to extend the selloff targeting the support at 0.6563. Yesterday, the
price bounced, and we got a pullback to the red long period moving
average that is now acting as resistance for the bearish short term trend. Such
pullbacks are generally healthy in a trend, especially after such quick moves.

On the 1 hour chart below, we can
see that the price pulled back all the way up to the swing high level where we
have also confluence with the 38.2% Fibonacci
retracement level. Since tapping into that resistance zone,
the price fell again and it’s now pulling back to the blue short period moving
average. The market is likely to find sellers here as the moving average
crossover will be taken as a hint that the bigger pullback has ended. Today, we have the US Retail Sales
report and it’s expected to be a market moving event. Worse than expected data
is likely to be taken as bad for risk sentiment, ultimately favouring the USD,
while better than expected figures may weaken the USD again.

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

• I think we have lost a degree of trust
• That affects what we should be doing with our decision making
• We should be explaining it to more people, do more in terms of thinking about the audience we’re talking to
• We need to be explaining what we’re seeing and why we’re making the judgements we are and talk to the people and communities in a language they can understand

Just that little bit of trust, eh? That’s a bit modest. Pfft. He’s speaking in the context of explaining the decision making by major central banks to a wider audience, and not just financial markets.

This comes of course after having previously brushed aside inflation pressures back in 2021, with the ECB profusely calling it „transitory“. Remember that? And then all of a sudden now needing to pile on aggressively rate hikes in the past year.

Props to him for admitting it but even with knowing what they should do better, let’s face the facts. Central bankers are pretty much just like politicians at this point and they will not have played things out differently given another chance anyway.

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

Here’s a snapshot of the equities space:

• S&P 500 futures -0.2%
• Nasdaq futures flat
• Dow futures -0.3%
• Eurostoxx +0.1%
• Germany DAX +0.1%
• France CAC 40 flat
• UK FTSE flat

It’s not pretty but it’s not bad either, to put things nicely. And the lack of any real direction so far in the session is making it tough to get a grip on things happening elsewhere as well.

In the major currencies space, the dollar is still just slightly on the softer side while bond yields are continuing to stay heavier on the session.

At this point, it looks like traders are just hoping for a notable surprise miss/beat on the next big data in order to start jumping around. Let’s see whether or not the US retail sales data will offer that opportunity.

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

• There is some risk of a recession
• But if we fall into one, it will not be long or deep
• There could be some increase in unemployment from here but economy will still be strong

Pretty much just echoing what we already know since the FOMC meeting two weeks ago, as the Fed looks to be aiming to move to the sidelines for the time being.

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

• EU bumps up 2023, 2024 growth and inflation forecasts
• ECB reaffirms lagging impact of rate hikes in latest bulletin
• China’s central bank reaffirms to keep liquidity reasonably ample
• Germany April wholesale price index -0.4% vs +0.2% m/m prior
• Eurozone March industrial production -4.1% vs -2.5% m/m expected
• Switzerland April producer and import prices +0.2% vs +0.2% m/m prior
• SNB total sight deposits w.e. 12 May CHF 520.1 billion vs CHF 525.6 billion prior

Markets:

• AUD leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.4%
• US 10-year yields up 2.2 bps to 3.485%
• Gold up 0.2% to $2,015.03
• WTI crude up 0.6% to $70.45
• Bitcoin up 3.7% to $27,423

It was a relatively slow session but there were some decent moves in markets to start the new week.

The dollar is seeing a bit of a light pullback as risk sentiment recovers, with equities pushing higher in European morning trade. That weighed on the greenback as well as the yen, with a slight rise across the board for other major currencies.

EUR/USD moved up from 1.0860 to 1.0880 while GBP/USD moved up from 1.2460 to 1.2500 during the session. The antipodeans were the lead gainers, with AUD/USD improving from 0.6670 in Asia to 0.6690 and holding at the highs for the day now. NZD/USD is also up 0.4% to 0.6215 but off its earlier high of 0.6230 earlier in the day.

USD/JPY also pushed higher as yields moved up amid the better risk sentiment, with the pair holding just above 136.00 for now – up 0.3% on the day.

Elsewhere, commodities also traded higher across the board as it is a case of a dollar pullback mostly amid a slight bounce in the risk mood to kick start the week.

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

• Does not see inflation coming down quickly
• There is still a long way to go in battle against inflation
• We may have to go up further on rates
• Thinks the math (on inflation, economy) will work in Fed’s favour in months ahead

He adds that if there is a bias to take action, it might just be a little bit more as he says „we are where my dot has been“.

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