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Equity markets a slightly under pressure on Tuesday following a wide array of earnings releases and as investors eye further US data later in the week.

Interest rate expectations have become more hawkish in recent weeks but investors don't appear convinced it's going to unfold that way. We're still looking for weaknesses in the labour market and signs of inflationary pressures softening, something we could see over the next couple of months at which point expectations could be pared back once more.

Ueda indicates BoJ tweaks unlikely this week

Earlier today, new Bank of Japan Governor Kazuo Ueda appeared to push back against the prospect of any changes to monetary policy ahead of the meeting on Friday. While the central bank was not expected to make any changes, there remained the possibility of a tweak to yield curve control given the higher inflation we've seen, possibly signaling a slight change in direction under the new leadership.

But Ueda appeared to indicate that isn't something that will be considered at the current time, warning that if inflation or wages rise more than expected - despite the former still being driven by cost-push factors - a response such as rate hikes could be considered. But he insisted that tightening now could cause a grave situation in the future, which appears to have closed the door to such a consideration this week.

Calls for $100 Oil premature

Oil prices are slipping again on Tuesday after paring losses over the last couple of sessions. It would appear crude prices have now settled back into their pre-OPEC+ intervention trading ranges, with Brent between $78-$88 and WTI ​ $73-$83.

The move lower today could even be another push to close the OPEC+ gap from a few weeks ago after falling just short late last week. Calls for $100 in the aftermath of the OPEC+ decision may have been premature, although, amid such an uncertain outlook, it is still possible if a soft landing is achieved. The second half of the year is poised to be more challenging for the global economy though as conditions tighten further and prior tightening takes hold.

Consolidation in Gold ahead of US economic data

Gold is relatively unchanged today, continuing the consolidation we've been seeing over the last week or so. Higher rate expectations have pushed it back from near-record highs but traders appear unconvinced by those expectations and reluctant to give up on all-time highs.

The yellow metal has remained choppy around $2,000, a big psychological level, albeit one that on this occasion hasn't been the catalyst for a significant shift in either direction. Instead, traders appear willing to wait for further US data - of which there's plenty to come this week - before making their mind up. In the interim, consolidation may continue.

Could we soon see sharp declines in Bitcoin?

Bitcoin has pulled back into an interesting zone after briefly breaching $30,000 in recent weeks. It fell towards $27,000 earlier in the week, around $500 above the lows in the second half of March during the ascent. A break of $26,500 now could signal a much sharper decline, although some consolidation between here at $29,000 may be more likely for now.

Daily Pivots: (S1) 0.8828; (P) 0.8844; (R1) 0.8862; More...

EUR/GBP's break of 0.8864 resistance indicates resumption of the rebound from 0.8717. The development also argue that choppy decline from 0.8977 has completed. Intraday bias is back on the upside for 0.8924 resistance first. Firm break there will target 0.8977 high next. On the downside, below 0.8840 minor support will turn intraday bias neutral first. But further rally will remain in favor as long as 0.8790 support holds.

In the bigger picture, outlook remains rather mixed for now, except that price actions from 0.9267 (2022 high) are part of the long term range pattern from 0.9499 (2020 high). With 0.8720 support intact, rise from 0.8545 is in favor to continue through 0.8977. However, firm break of 0.8720 will argue that such rebound has completed, and open up deeper fall through this support level.

Daily Pivots: (S1) 133.86; (P) 134.29; (R1) 134.70; More...

Intraday bias in USD/JPY remains neutral as consolidation from 135.13 continues. Further rally is expected as long as 132.03 support holds. On the upside, break of 135.13 will resume the choppy rebound from 129.62 towards 137.90 resistance next. However, break of 132.03 will argue that the rebound has completed already and turn bias back to the downside for 129.62 and below.

In the bigger picture, corrective pattern from 127.20 might be extending. But after all, down trend from 151.93 is expected to resume at a later stage. Break of 127.20 will resume this down trend and target 61.8% projection of 151.93 to 127.20 from 137.90 at 122.61. This will now be the favored case as long as 137.90 resistance holds.

Daily Pivots: (S1) 0.8858; (P) 0.8894; (R1) 0.8912; More...

USD/CHF recovered ahead of 0.8858 support and intraday bias is turned neutral first. Overall, further decline is expected as long as 0.9001 resistance holds. On the downside, below 0.8858 will resume the down trend from 1.0146 to 61.8% projection of 1.0146 to 0.9058 from 0.9439 at 0.8767, which is close to 0.8756 long term support. Strong support is expected there to bring rebound, at least on first attempt. On the upside, break of 0.9001 resistance will confirm short term bottoming and turn bias back to the upside.

In the bigger picture, fall from 1.1046 (2022 high) is in progress for 0.8756 support (2021 low). But overall, this fall is still seen as a leg in the long term range pattern from 1.0342 (2016 high). So, downside should be contained by 0.8756 to bring reversal. Sustained break of 0.9058 support turned resistance will be the first sign of medium term bottoming. However, decisive break of 0.8756 will carry larger bearish implications.

Daily Pivots: (S1) 1.2436; (P) 1.2461; (R1) 1.2511; More...

Sideway trading continues in GBP/USD and intraday bias remains neutral first. Outlook stays bullish with 1.2343 support intact. On the upside, above 1.2545 will target 1.2759 fibonacci level first. Firm break there will target 61.8% projection of 1.0351 to 1.2445 from 1.1801 at 1.3095. However, considering bearish divergence condition in 4H MACD, firm break of 1.2343 will confirm short term topping, and turn bias back to the downside for deeper pullback.

In the bigger picture, the rise from 1.0351 medium term term bottom (2022 low) is in progress for 61.8% retracement of 1.4248 (2021 high) to 1.0351 at 1.2759. Sustained break there will add to the case of long term bullish trend reversal. Further break of 61.8% projection of 1.0351 to 1.2445 from 1.1801 at 1.3095 could prompt upside acceleration to 100% projection at 1.3895. For now, this will remain the favored case as long as 1.1801 support holds, even in case of deep pull back.

Daily Pivots: (S1) 1.0992; (P) 1.1021; (R1) 1.1076; More...

Intraday bias in EUR/USD remains neutral for the moment. Rejection by 1.1075 resistance indicates that consolidation from there is extending. But overall outlook will remain bullish as long as 1.0908 support holds. Break of 1.1075 will resume larger up trend from 0.9534 to 1.1273 fibonacci level. Break there will target 61.8% projection of 0.9534 to 1.1032 from 1.0515 at 1.1441.

In the bigger picture, rise from 0.9534 (2022 low) is in progress for 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273. Sustained break there will solidify the case of bullish trend reversal and target 1.2348 resistance next (2021 high). This will now remain the favored case as long as 1.0515 support holds, even in case of deeper pull back.

Selloff in Australian and to a lesser extent Canadian Dollar is the main theme in the markets today, but market directions are not clear elsewhere. Euro's rally attempt against Dollar and Yen faltered following deep retreat in European benchmark yields. But the common currency is making progress in upside breakout against Sterling. Meanwhile, Yen and Swiss Franc are gaining ground as US and European yields fall. Dollar's performance is mixed for now, and further guidance from overall risk sentiment may be needed. However, the greenback could face deeper declines against Yen if treasury yield weakness persists.

Technically, 10-year yield's gap down and break of 3.460 support now suggests that recovery from 3.253 has completed after rejection by 55 D EMA. If TNX fails to close above 3.460, deeper decline would then be likely back to 3.253 support below below, to extend the whole correction from 4.333. If this scenario unfolds, USD/JPY may also fall below the 132.03 support level.

In Europe, at the time of writing, FTSE is down -0.20%. DAX is down -0.05%. CAC is down -0.60%. Germany 10-year yield is down -0.069 at 2.440. Earlier in Asia, Nikkei rose 0.09%. Hong Kong HSI dropped -1.71%. China Shanghai SSE dropped -0.32%. Singapore Strait Times dropped -0.84%. Japan 10-year JGB yield rose 0.0075 to 0.480.

Aussie down broadly following free fall in Copper

Australian Dollar is trading broadly lower today, even against New Zealand Dollar. Risk sentiment isn't much of a factor contributing to selloff considering that major European indexes are just in slight decline. Instead, the free fall in copper price might be a larger factor. But for sure, some traders could have jumped out of Aussie ahead of tomorrow's CPI release too, which is crucial to RBA rate decision on May 2, i.e., next Tuesday.

As for Copper, the fall from 4.1743 is accelerating notably today. Deeper decline is expected as long as 3.3974 resistance holds, to 3.8229 support and below. Price structures from 4.3556 (Jan high) are so far corrective looking. Hence, strong support should emerge ahead of 100% projection of 4.3556 to 3.8229 from 4.1743 at 3.6416 to complete the correction, and bring sustainable rebound. However, sustained break of 3.6416 could risk more downside acceleration back towards 3.1314 (2022 low).

AUD/NZD's steep fall from 1.0928 and firm break of 55 4H EMA indicates short term topping. It also raises the chance that whole rebound from 1.0585 has completed. Deeper decline is now in favor to 1.0732 support. Firm break there will pave the way back to 1.0585. Also, it's a bit early to determine, but fall from 1.0928 could also be the third leg of the pattern from 1.1085. Hence, any downside acceleration would push AUD/NZD back to 1.0469 low easily.

ECB Lane: Inappropriate to leave deposit rate at current 3%

ECB Chief Economist Philip Lane revealed in an interview with French newspaper Le Monde that the central bank will likely raise interest rates again at their May 4 meeting, stating, "This is still not the right time to stop." While Lane did not specify the rate hike's magnitude, he said that "it would be inappropriate to leave our deposit rate at the current level of 3%."

Lane acknowledged the decline in Eurozone inflation from 10.6% last October to 6.9% in March as a positive development, easing pressure on living costs. He expects inflation to continue falling due to supply chain bottleneck improvements and the reversal of the energy situation. However, Lane stressed that the most crucial aspect for central banks is "making sure that we get close to our target of 2% within a reasonable time period."

Lane does not believe the current situation resembles the 1970s-style persistent inflation, but he cautioned against the risk of ending up in such a scenario. Lane underlined the importance of ECB raising interest rates to ensure a "timely" return to the 2% inflation target. Regarding the European economy, he noted that while it is not stagnant, it follows a more modest path than expected prior to the pandemic and the Russian war against Ukraine.

BoJ Governor Ueda stresses need for continued monetary easing

BoJ Governor Kazuo Ueda addressed parliament today, emphasizing, "In light of current economic, price and financial developments, it's appropriate to maintain monetary easing, now conducted through yield curve control."

Ueda reiterated the importance of keeping Japan's monetary policy loose to achieve the 2% inflation target in a sustainable and stable manner, along with wage hikes. He added that if wage growth and inflation accelerate faster than expected and require tightening monetary policy, BoJ is prepared to respond by raising interest rates.

Despite this, Ueda warned of the risk of inflation falling further below expectations, calling it "very worrying." He noted that "the risk of inflation undershooting forecasts is bigger than the risk of overshooting," emphasizing the need to maintain the BoJ massive stimulus for the time being.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0992; (P) 1.1021; (R1) 1.1076; More...

Intraday bias in EUR/USD remains neutral for the moment. Rejection by 1.1075 resistance indicates that consolidation from there is extending. But overall outlook will remain bullish as long as 1.0908 support holds. Break of 1.1075 will resume larger up trend from 0.9534 to 1.1273 fibonacci level. Break there will target 61.8% projection of 0.9534 to 1.1032 from 1.0515 at 1.1441.

In the bigger picture, rise from 0.9534 (2022 low) is in progress for 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273. Sustained break there will solidify the case of bullish trend reversal and target 1.2348 resistance next (2021 high). This will now remain the favored case as long as 1.0515 support holds, even in case of deeper pull back.

Economic Indicators Update

Australian Dollar is trading broadly lower today, even against New Zealand Dollar. Risk sentiment isn't much of a factor contributing to selloff considering that major European indexes are just in slight decline. Instead, the free fall in copper price might be a larger factor. But for sure, some traders could have jumped out of Aussie ahead of tomorrow's CPI release too, which is crucial to RBA rate decision on May 2, i.e., next Tuesday.

As for Copper, the fall from 4.1743 is accelerating notably today. Deeper decline is expected as long as 3.3974 resistance holds, to 3.8229 support and below. Price structures from 4.3556 (Jan high) are so far corrective looking. Hence, strong support should emerge ahead of 100% projection of 4.3556 to 3.8229 from 4.1743 at 3.6416 to complete the correction, and bring sustainable rebound. However, sustained break of 3.6416 could risk more downside acceleration back towards 3.1314 (2022 low).

AUD/NZD's steep fall from 1.0928 and firm break of 55 4H EMA indicates short term topping. It also raises the chance that whole rebound from 1.0585 has completed. Deeper decline is now in favor to 1.0732 support. Firm break there will pave the way back to 1.0585. Also, it's a bit early to determine, but fall from 1.0928 could also be the third leg of the pattern from 1.1085. Hence, any downside acceleration would push AUD/NZD back to 1.0469 low easily.

• EURCAD under bullish pressure
• Likely to rise to resistance level 1.5090

EURCAD currency pair under the bullish pressure after the price broke the resistance level 1.4923 (which stopped the previous impulse wave 1 in the middle of March).

The breakout of the resistance level 1.4923 accelerated the active impulse wave 3 which belongs to the intermediate impulse wave (5) from February.

Given the clear daily uptrend, EURCAD can be expected to rise further toward the next resistance level 1.5090 (target for the completion of the active impulse wave 3).

• EURJPY reversed from strong resistance level 148.50
• Likely to fall to support level 146.60

EURJPY currency pair recently reversed down from the multi-month resistance level 148.50 (which stopped the previous impulse wave (A) in October).

The resistance level 148.50 was further strengthened by the upper daily Bollinger Band.

Given the strength of the resistance level 148.50 and the overbought daily Stochastic, EURJPY currency pair can be expected to fall further toward the next support level 146.60 (low of the previous correction (ii)).