Market Analysis
XAUUSD
Forecast: Bearish
Fundamental Analysis:
Recent data released on Tuesday revealed a higher-than-anticipated increase in US labor costs during Q1, intensifying concerns surrounding inflationary pressures. This development could potentially postpone any expectations of a rate cut until later in the year. The prevailing sentiment among traders now suggests a scaling back from the previously projected three rate cuts to just one for the year.
However, the Federal Reserve has sounded a cautious note, highlighting disappointing inflation figures and hinting at a possible slowdown in efforts to rebalance the economy. The central bank has also announced intentions to decelerate the pace of its balance sheet reduction, a departure from its earlier stance.
The Fed's stance appears to be less hawkish than anticipated, contributing to market sentiment.
Technical Analysis:
Examining the 4-hour chart, there has been a notable decline in the price of gold. A bearish flag pattern has emerged, indicating a sharp consolidation phase following a rapid adjustment, typically aligning with the prevailing trend. In the short term, the outlook remains bearish as gold continues to trade below the 20-period Exponential Moving Average (EMA) positioned at $2,312.
In terms of potential downward movement, the $2,223 peak observed on March 23 is expected to serve as a significant support level for the gold price. Additionally, the 14-period Relative Strength Index (RSI) is currently fluctuating within the bearish zone, oscillating between 20.00 and 40.00, signaling a continuation of bearish momentum.
USDJPY
Prediction: Bearish
Fundamental Analysis:
USD/JPY is anticipated to take a bearish stance, driven by a blend of fundamental and technical factors.
Fundamentally, investors will be closely eyeing the Bank of Japan's Monetary Policy Meeting Minutes, which are expected to influence market sentiment early in the trading session. Additionally, Japanese consumer confidence figures for April will be under scrutiny. Later in the session, attention will shift to the US labor market, particularly unit labor costs, nonfarm productivity, and jobless claims.
Technical Analysis:
From a technical perspective, while there are indications of an upward movement and positive signals on hourly charts, there's a level of caution. Traders eyeing an upward trajectory may prefer to wait until the USD/JPY pair surpasses the $158.00 mark. Current prices might encounter resistance around the $158.40-$158.45 range, potentially hindering further upward movement. However, if breached, the pair could aim to retest the $159.00 mark.
EURUSD
Prediction: Bearish
Market Analysis:
US economic indicators continue to signal a rapid increase in inflation, prompting investors to closely monitor statements from Federal Reserve officials and the upcoming monetary policy announcement.
Despite robust economic data from the eurozone, particularly the Q1 Gross Domestic Product (GDP) growth of 0.3% and steady year-over-year growth in the Harmonised Index of Consumer Prices (HICP), the euro struggled to sustain its gains. Although the core HICP softened slightly, it still exceeded expectations.
Persistent wage pressures in the US are exacerbating inflation concerns. Additionally, hawkish remarks from Fed officials, suggesting no immediate need for interest rate cuts, have contributed to downward pressure on EUR/USD.
Technical Analysis:
EUR/USD is currently trading below today's pivot point of $1.0683, signaling a short-term bearish sentiment. Resistance levels are identified at $1.0735, $1.0766, and $1.0793, potentially limiting upward movements. Support levels are positioned at $1.0631, $1.0603, and $1.0575.
The 50-day and 200-day moving averages stand at $1.0694 and $1.0746 respectively, underscoring a critical trading range. A breach of the pivot point at $1.0683 could shift the balance towards a bullish outlook.
BTCUSD
Prediction: Bearish
Fundamental Analysis:
Bitcoin (BTC) and Ethereum (ETH) experience declines following lackluster demand for Hong Kong ETFs. Six ETFs introduced in Hong Kong recently saw disappointing first-day trading volumes, totaling only $11 million, significantly below the anticipated $100 million. These ETFs include the CSOP Bitcoin Futures ETF, CSOP Ether Futures ETF, and Samsung Bitcoin Futures Active ETF.
CSOP Bitcoin Futures ETF
CSOP Ether Futures ETF
Samsung Bitcoin Futures Active ETF
According to an analysis by Bloomberg's Wang, China has imposed a comprehensive ban on any involvement in cryptocurrency for its citizens, including the prohibition of investments in crypto ETFs.
Additionally, Binance, a major cryptocurrency exchange, faced its own set of challenges. Its CEO, Zhao, has been found guilty of charges related to anti-money laundering and has been sentenced to four months in prison.
Technical Analysis:
In terms of technical analysis, examining Bitcoin's 4-hour chart reveals a prevalent downward trend. Despite occasional minor upticks, significant drops persist due to ongoing selling pressure. Attempts to surpass the $65,286 mark have been consistently thwarted by strong resistance, highlighting the resilience of the current downward trajectory. The support level at $56,500 holds considerable significance; a breach below this level may present opportunities for entering bearish positions, while a sustained rebound could offer brief windows for short-term bullish strategies.
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