Market Analysis
XAUUSD
Outlook: Bullish
Fundamental Analysis:
According to recent data released by the U.S. Bureau of Labor Statistics (BLS), April saw a slight dip in the inflation rate from 3.5% to 3.4%. However, concerns linger among traders regarding the potential for inflationary pressures to escalate. The response to this data was a downturn in the US dollar and Treasury yields, providing a boost to the gold market. Consequently, XAU/USD prices have surged, surpassing the $2390 mark. The core CPI for April saw an anticipated uptick, albeit slightly lower than expected. This initial inflation report is likely to offer some reassurance to the Federal Reserve, allowing them to maintain their stance that inflationary trends in the U.S. are on a downward trajectory.
Technical Analysis:
With XAU/USD breaching the May 10 high of $2378, a new trading range has been established between $2380 and $2400. The immediate resistance level for gold stands at $2400. Should prices ascend beyond this threshold, the subsequent short-term resistance levels are projected at the April 19 high of $2417, followed by the all-time peak of $2431. Conversely, a downturn below $2359 could lead to a descent toward the May 9 low of $2306, with a potential floor at $2300. Further declines may target the 50-day SMA at $2249.
USDJPY
Predicted Movement: Decline
Fundamental Analysis:
The notable contrast between borrowing rates in Japan and the United States has been exerting downward pressure on the Japanese yen. Following the release of the U.S. April Consumer Price Index (CPI) report on Wednesday, the U.S. dollar weakened, leading to a decrease in U.S. Treasury yields and an appreciation of the yen.
Post-data release, traders have amplified their expectations of a potential interest rate cut by the Federal Reserve. Presently, the market sentiment indicates a likelihood of over 80% for a 0.25% rate reduction at the Fed's September meeting.
Technical Analysis:
Following the release of U.S. inflation data, the USD/JPY pair experienced a downward trajectory. This trend is expected to persist, possibly targeting levels around $151.80 and $150.00. However, a conclusive sell signal is pending as there hasn't been a formation of a new lower low. Should the pair continue its descent and establish a lower point, the decline could extend below the daily 200-day EMA positioned at $148.44. The immediate technical support is envisaged around the 50-day EMA level at $153.28.
EURUSD
Forecast: Rise
Fundamental Analysis:
Analysis indicates that the EUR/USD is poised for an increase. This trend was spurred by the U.S. Consumer Price Index (CPI) meeting market expectations. April saw a 3.4% rise compared to March's 3.5%, with the core annual reading decreasing slightly to 3.6% from 3.8%. Despite a monthly CPI increase of 0.3%, slightly below the projected 0.4% by the U.S. Bureau of Labor Statistics (BLS), these figures weren't alarming, suggesting the Federal Reserve might maintain its current monetary policy stance.
Technical Analysis:
From a technical perspective, EUR/USD may encounter resistance around $1.0981 and the weekly high of $1.0998 before reaching the pivotal level of $1.1000. Conversely, if it dips below May's low of $1.0649, it could approach the 2024 low of $1.0601. The 4-hour chart illustrates a consistent upward trajectory, with immediate resistance at $1.0942 and initial support at $1.0766, followed by $1.0723. Additionally, the Relative Strength Index (RSI) has surpassed 81, indicating upward momentum.
BTCUSD
Prediction: Increase
Fundamental Analysis:
Bitcoin surged past $66,000 following the release of the U.S. April Consumer Price Index (CPI), which showed a slight slowdown in inflation from 3.5% in March to 3.4%. This unexpected rise in Bitcoin's value is largely attributed to speculative trading and overall market sentiment. Traders and investors interpreted the lower inflation figures as a potential indication that the central bank may maintain its current monetary policies, which could favor high-risk assets like Bitcoin.
Technical Analysis:
Bitcoin's price witnessed a significant spike in a single day, indicating robust upward momentum driven by substantial buying activity. This notable uptick came after a series of lower highs, hinting at a potential shift in market dynamics favoring further upward movement. There exists a possibility for the price to extend its rally towards the recent peak of $67,240. However, a retracement towards the $65,500 support level might occur, potentially leading to a downturn. A breach below $60,630 could instigate panic selling, potentially pushing the price down to $58,000, or in more severe scenarios, revisiting the May 1 low of $56,552.
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