• This comes as lagged price pressures fade out
• Rapid wage growth is keeping core inflation up and will remain high for some time
• This will take some time before easing slowly
• Outlook remains surrounded by considerable uncertainty
• Risks to the growth outlook are tilted to the downside

All things being equal, the ECB is likely to lean more towards a 25 bps rate hike next month. The narrative now is that price pressures are still holding up, in particular core inflation, and that is validating their decision to push with at least one more rate hike.

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

• OPEC oil output fell by 86k bpd to 28.8 mil bpd in March
• Sees world oil demand to rise by 2.32 mil bpd this year (unchanged from prev. forecast)
• Recent reopening of China still not sufficient to reverse declining trend in global refinery intakes
• Any economic weakness from rate hikes could weigh on US summer demand
• Demand outlook for OECD also remains challenging

As you would expect, the report fits the narrative of their decision to surprise with cutting production as they warn that demand conditions could be affected in the coming quarter. Besides that, the output decline fits with the planned cuts from before and some outages; all before incorporating the decision here.

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

• EUR/USD tries for a break above 1.1000 again
• ECB policymakers reportedly converging towards 25 bps rate hike in May
• Japan senior lawmaker says appropriate for BOJ to not change YCC for now
• UK February monthly GDP 0.0% vs +0.1% m/m expected
• Germany March final CPI +7.4% vs +7.4% y/y prelim
• Eurozone February industrial production +1.5% vs +1.0% m/m expected

Markets:

• CHF leads, JPY lags on the day
• European equities a little higher; S&P 500 futures up 0.1%
• US 10-year yields up 0.3 bps to 3.424%
• Gold up 0.6% to $2,026.23
• WTI crude down 0.4% to $82.75
• Bitcoin up 0.9% to $30,230

Markets are continuing to digest the US inflation data from yesterday but it seems like the verdict is that the dollar might be set for another round of weakness before the weekend.

EUR/USD is pushing above 1.1000 with the high hitting 1.1030, though there are some large option expiries that could be holding back price action for now. Meanwhile, GBP/USD also jumps up to its highest in ten months above 1.2500 as buyers are angling for a technical break higher as well.

USD/CHF is also sinking to its lowest levels since February 2021, testing waters around 0.8900 now after the drop below 0.9000 in trading yesterday.

Alongside the dollar, the yen is the laggard as bond yields remain little changed on the day. That is seeing the likes of EUR/JPY and CHF/JPY also race to fresh highs for the year at 146.75 and 149.60 respectively.

European equities are holding higher mostly with French stocks leading the charge, as the CAC 40 looks for a breakout upon hitting fresh record highs. That is keeping the commodity currencies slightly higher on the day as well.

If you’re wondering why if markets are convinced of a 25 bps rate hike by the Fed in May, that the dollar is still weakening, it’s all about what comes next as outlined here.

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

Finance Magnates
Africa Summit (FMAS:23) is almost here, taking place in just a few short weeks
on May 8-10, 2023. Held at the luxurious Sandton Convention Centre in
Johannesburg, South Africa, the event will bring together the best forex and
crypto traders in Africa.

Africa has been rapidly
developing its forex and crypto markets in recent years. Since the pandemic,
the continent has seen a proliferation of activity in the online trading
industry, attracting brokers, service providers, and more.

Fast forwarding to
the present, FMAS:23 will capture the hype, potential, and excitement of this
trend. The event of the year in Africa will be attracting top industry talent,
leading traders and specialists, and thousands of like-minded attendees.

It is expected
to draw upwards of 3000+ attendees, 70+ exhibitors, 100+ brokers, 50+ speakers.
All will be available to discuss, engage, and network with during the duration
of FMAS:23.

The landmark summit
cannot afford to be missed. As
a reminder, there is still time to register for free and sign up today for the biggest
event of the year!

Why Forex and Crypto
Traders Should Attend FMAS:23

• Prestigious opening party for
  networking
• Opportunity to meet top-level
  traders, experts, and speakers
• Chance to learn, engage with
  peers, traders, specialists
• Overall luxurious experience in
  Sandton, South Africa
• World-class closing party

FMAS:23 offers
several benefits for attendees as well as multiple reasons for attending. The
summit will be of particular interest for traders and the B2C scene as a whole,
namely the forex and crypto trading sphere.

This is due in part
to unique opportunities for networking, engaging, and learning from some of the
leading figures and specialists in the forex, crypto, and CFDs space. That the
event is taking place in Africa is also special, given the potential for such a
large user base of new and established traders to mingle and congregate in one
location.

Africa itself
continues to see a surge of investment, interest, and development in the retail
trading scene. This means more traders than ever before are signing up with
brokers, engaging in trading services, and more.

In terms of content,
FMAS:23 will be comprised of 2.5 days of unique panels, sessions, workshops,
discussions, and more, touching on every corner of the retail trading industry.

The biggest brands
and traders will all be in attendance – whether you are a new entrant to the
trading scene or are a veteran, FMAS:23 has something for everyone. The agenda for the event is already live and can be accessed by the following link.
With so much content at your disposal, the time to set your agenda to maximize
your time during FMAS:23 is now.

Get ready to rub shoulders
with some of the biggest names in the finance industry. The Finance Magnates
Africa Summit will attract top-level leaders from across the globe, providing
an unparalleled opportunity to network with and learn from the best. Whether
you’re looking to make new connections or seek out potential partners, this is
the place to be.

See you in Johannesburg
this May!

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

On the daily chart below for
XTIUSD, we can see that the price is now threatening a major breakout of the
range. The market has been stuck in this range since December 2022. We got a
breakdown in mid-March as the market feared an immediate recession due to the
little banking crisis after the Silicon Valley Bank collapse.

As the Fed backstopped the crisis
with emergency lending tools and the fear faded, the price rebounded and came
back into the range. Then we got a surprise OPEC+
production cut the last week that made the market to gap up and
open $6 higher than the previous close. That gap hasn’t been filled yet and the
market kept on bidding with the price now at the top of the range.

XTIUSD technical analysis

On the 4 hour chart below, we can
see more closely the price action and the gap created by the OPEC+ news. It’s
also worth noting that the latest push to the upside is diverging with the MACD. This may be a sign that the
momentum isn’t really there, and it may turn into a fakeout.

Today we have the US Jobless Claims report and the market may go
into risk-off if the data miss again expectations signalling that the labour
market may be finally weakening. This should be bearish for oil as the market
will look at lower demand ahead. If the data beats expectations, then we may
see a real breakout and oil may reach the $90 handle.

On the 1 hour chart below, we can
see how the price is about to break yesterday’s high. The buyers may want to
wait for the economic data to confirm the breakout and pile in aggressively.
The sellers, on the other hand, will want to see worse economic data and a
further confirmation from the technicals, where a break below the trendline would end the strong bullish
momentum and bring the price down to fill the gap.

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

He says that new BOJ governor, Kazuo Ueda, is right to have judged that there is no need to change the yield curve control (YCC) settings for now. This is consistent with what he said last month already, in which he mentioned that „it is my understanding that Mr. Ueda will continue with the BOJ’s current stance“.

Do be reminded that if we are to see the BOJ change up its view on monetary policy, it would need a sort of unspoken validation from the government. And it doesn’t seem like we are at that point yet.

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

• 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.