• Since cut-off date for March projections, incoming data have been mixed
• But if baseline persists, it will be appropriate to raise rates further
• By bringing rates to a sufficiently restrictive level and fostering a period of below-trend growth through dampening demand, we will counteract above-target medium-term inflation pressures

That’s a very big roundabout way of justifying their motive for raising rates further in the next meeting. Whether or not that involves a 25 bps or a 50 bps rate hike is still up for question.

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

• Stocks in a better mood so far today
• UK March payrolls change 31k vs 98k prior
• Germany April ZEW survey current conditions -32.5 vs -40.0 expected
• BOJ’s Ueda: Positive signs are emerging in prices, wage growth
• JP Morgan, Citi upgrade China 2023 full-year GDP growth forecast

Markets:

• NZD leads, USD lags on the day
• European equities higher; S&P 500 futures up 0.4%
• US 10-year yields down 2.3 bps to 3.567%
• Gold up 0.5% to $2,004.21
• WTI crude down 0.2% to $80.70
• Bitcoin up 2.8% to $30,287

It was a relatively quiet session but markets were active, with the dollar slumping as it gets dragged back into the mud after the gains on Friday and Monday. This comes as equities are seen more upbeat, perhaps cheering on the more robust China Q1 GDP data earlier in the day.

The pound also caught a bit of a lift as UK wage pressures continue to run hot, beating on estimates. Put together the above factors and GBP/USD is running up by 0.5% to 1.2430 levels now, up from around 1.2385 earlier today.

As the dollar softened, EUR/USD is seen moving up from 1.0930 to 1.0980 while USD/JPY also dropped from 134.50 to 133.90 with Treasury yields also reversing to fall lower during the session.

The antipodeans are also enjoying life today with AUD/USD up 0.6% to 0.6740 and NZD/USD up 0.6% to 0.6220 at the moment, hanging at the highs for the day.

In other markets, gold is also quietly climbing back above the $2,000 mark as it capitalises on the dollar’s weakness while we are seeing Bitcoin also shoot higher in the last 15 minutes in a burst back above $30,000.

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

After the drop back below the $30,000 mark in trading yesterday, Bitcoin is coming back up today and buyers are catching a second breath on a push above the key figure level at the moment. It’s a quick jump straight to $30,200 and the high last week of around $31,050 will be one in buyers‘ crosshairs.

The key resistance region to be mindful about though, sits closer to $32,000 and that is from highs seen last May. A firm break above that leaves little in between that and a push towards $40,000 in terms of price action.

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

• EPS $8.79 (vs $8.21 estimate)
• Revenue $12.22 billion (vs $12.88 billion estimate)
• Investment banking revenue $1.58 billion (vs $1.54 billion estimate)
• Net interest income $1.78 billion (vs $2.18 billion estimate)

Looking at the initial reaction, Goldman Sachs‘ shares are down 2% in pre-market at the moment.

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

On the daily chart below for
AUDUSD, we can see that the price action remains choppy as the uncertainty
prevails in the market. The US economic data keeps giving recessionary vibes
with the US
retail sales missing expectations across the board and giving
the USD a boost the last Friday.

This move higher in the US Dollar
though is fading today. It’s a push and pull between buyers and sellers and
none of them has a high conviction in what’s next. The resistance at 0.6781 coupled with the 38.2%
Fibonacci
retracement level is a tough nut to crack for the buyers as
the sellers keep defending the level strongly.

AUDUSD
technical analysis

On the 4 hour chart below, we can
see the current range between the support at 0.6620 and the resistance at
0.6793. At the moment the only strategy here is to “play the range” buying at
support and selling at resistance. The recent rejection at the resistance
should give the sellers enough conviction to target the support. There’s no top
tier US economic data until Thursday and Friday, so
the technicals and the sentiment will guide the price action.

On the 1 hour chart below, we can
see that today’s pullback switched the bearish momentum to a bullish one with
the moving
averages crossing to the upside. The little trendline should be the place where buyers
and sellers are likely to lean on. The buyers will want to see the price
bouncing from the trendline with the red long period moving average acting as
resistance. The sellers, on the other hand, will want to see the price to break
below the trendline to jump onboard and push the price towards the bottom of
the range.

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

With little on the agenda, markets are seeing a more optimistic tone so far today and that is also weighing on the dollar. It might be a bit of a late acceptance to China’s strong Q1 GDP data earlier but stocks won’t be complaining. Here’s a snapshot of things at the moment:

• S&P 500 futures +0.4%
• Nasdaq futures +0.6%
• Dow futures +0.3%
• Eurostoxx +0.6%
• Germany DAX +0.5%
• France CAC 40 +0.5%
• UK FTSE 0.2%

In Europe, the optimism continues to flow and the DAX is in the hunt for its fourth weekly gain in five weeks, trading up to its highest levels so far this year. Eyes will be on the November 2021 high at 16,290 next.

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

• Higher yields provide some comfort to the dollar for now
• How has Fed pricing changed after the events on Friday?
• ECB’s Kazaks: May option is 25 bps or 50 bps move
• SNB total sight deposits w.e. 14 April CHF 544.1 bn vs CHF 532.2 bn prior

Markets:

• USD leads, EUR lags on the day
• European equities mixed; S&P 500 futures up 0.1%
• US 10-year yields up 2.1 bps to 3.543%
• Gold up 0.2% to $2,007.91
• WTI crude down 0.5% to $82.12
• Bitcoin down 2.2% to $29,802

There aren’t any major headlines to start the new week, with there being a lack of any key economic releases in Europe today as well.

As such, markets are left to their own devices with the dollar holding steadier for the most part after the Friday rebound. There was a slight bid at the start of the session but overall, the greenback is sitting lightly changed at the moment.

EUR/USD is keeping below the 1.1000 mark around 1.0970-80 levels while GBP/USD fell back below 1.2400 to 1.2375 before holding around 1.2410 at the moment.

USD/JPY gradually nudged higher back towards 134.00 as bond yields held higher, with Fed funds futures seeing a less dovish path to the rates curve as compared to before the events on Friday.

Elsewhere, European equities opened with some cautious optimism but are now sitting more mixed with some marginal losses on the board. That’s not indicative of any firm narrative as we get the week underway.

With the data set this week not being as crucial as last week, Fed speakers may be what markets will look to for clues on how to proceed next – all before the FOMC blackout period that will begin on 22 April.

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

On the daily chart below for the Nasdaq, we can
see that the price action is tentative trading into the key resistance at 12274. The sellers are likely
waiting there, ready to defend the level with little risk above and big reward
in case the market resumes the main bearish trend.

The moving
averages are acting as support for the buyers at the moment and keep the bullish
trend intact. The breakout of the bullish
flag might ultimately lead to an extension to the 13186 resistance but the
buyers need to break with conviction above the 12274 level first.

Nasdaq technical analysis

On the 4 hour chart below, we can
see that the moving averages have converged as the price action has become
rangebound. Last Friday the buyers haven’t got any help from the economic data
as retail
sales missed across the board, Fed’s
Waller delivered hawkish comments and the 1
year inflation expectations in the University of Michigan survey showed a big
jump to the upside.

On the 1 hour chart below, we can
see more closely the current range created just below the key resistance. In
such instances, it’s best to just stay out and wait for the price to break on
either side supported by a fundamental catalyst and go with the flow. But one
can also “play the range” selling at resistance and buying at support. The next
economic data to watch are the US Jobless
Claims on Thursday and US PMIs on Friday.

1

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

That seems to be on the cards, with Deutsche seeing headline annual inflation slowing to 9.73% in March while core annual inflation is estimated to slip to 5.85%. For some context, the economist estimates for both are seen at 9.8% and 6.0% respectively.

That said, the firm says that the risks to their forecasts this week are tilted to the upside. They mention that there is still a big question mark on the persistence of services inflation and that is likely to remain resilient in the months ahead.

However, they do expect the price momentum for core goods to soften with supply chains normalising further and food inflation also likely to slow from the summer onwards. The latter though is still anticipated to remain more robust than normal for much of the year.

Some commentary on the big picture outlook:

„Overall, we remain optimistic that prices will slow this year with CPI getting back
to target around Q3-24. Risks to our forecast remain to the downside, particularly
on headline inflation. But we do see some upside risks to core inflation. Corporate
pricing power remains strong. Inflation expectations remain unanchored, relative
to the BoE’s target. And wage gains remain inconsistent with the Bank’s 2%
mandate. This is a key reason why we see the Bank of England’s terminal rate
landing zone as 4.25% to 4.75% — explicitly pointing to upside risks to our Bank
Rate projections. We will be looking more closely at corporate pricing power in
forthcoming pieces, which will be key in assessing the monetary policy outlook.“

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

On the daily chart below for the S&P 500, we can
see that the price is again struggling hard at the key 4175 resistance. This level has been holding
since September 2022 and as soon as the price gets there, it gets rejected. The
sellers are likely to lean on this level again with a low risk in case the
price breaks above and a huge reward in case the market turns, and we get
another big bearish move.

Last Friday the buyers haven’t
even got any help from the economic data as retail
sales missed across the board and the 1
year inflation expectations in the University of Michigan survey showed a big
jump to the upside.

S&P 500 Technical Analysis

In the 4
hour chart below, we can see that the price has been diverging with the MACD rallying into the key
resistance. This should be a sign of a weakening momentum and it generally
leads to a pullback or reversal. The market may correct towards the trendline where the buyers are likely to
lean onto. This is also where they should find support from the daily red long
period moving
average.

In the 1
hour chart below, we can see how the spike above the key resistance was
immediately followed by a big reversal. There are strong sellers here that keep
defending this level. The first target for the sellers should be the support
zone at 4100.

The
buyers may need a bullish fundamental catalyst to gather enough momentum to
break above the resistance and start a rally towards the next resistance at
4300. Unfortunately, there’s no tier one economic data release until Thursday and
Friday when we will get the US Jobless Claims and the US PMIs.

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