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Markets

Domestic and global topics triggered an accelerating sell-off in both on bond and equity markets with especially the long end of the bond curves underperforming. Yields in the UK, German/EMU and Japan hit “highest levels since…”. US Treasuries which recently reacted more muted also incurred ‘more-than-modest’ losses. The UK again severed as a point in case. At 5.85% , the UK 30-y yield closed at levels not seen since May 1998. UK yields rose between 12.3 bps (2-y) and 19.2 bps (30-y). Markets a are pricing a Andy Burham ‘risk premium’ as the Manchester Major is preparing a path to challenge Keir Starmer’s position as PM via a local by-election next month. Other developed countries are not in exactly the same political situation of the UK, but the nature of challenges is similar. The war in the Middle East and disruptions in supply of oil and other commodities on Friday further raised risk premia on global markets, as headlines suggested that the US and Iran are not moving any closer to any workable agreement to end the war and reopen the Strait of Hormuz. Brent oil closed at $109.2/b. US President Trump this weekend again showed impatience with Iran not giving in to US demands. It illustrates the persistence to the (military & political) stalemate. Trump’s visit to China at least also didn’t bring any specific help for a solution to the conflict. US yields on Friday jumped between 5.2 bps (2-y) and 11.2 bps (10-y). The US 2-y yield now rose well beyond the 4% barrier. Markets are pondering a scenario were the Fed will be forced to raise its policy rate around the turn of the year. German yields added between 8.6 bps (2-y) and 12.4 bps (10-y). At 3.67%, the 30-y yield is touching highest levels since mid-2011. EMU money market are embracing a scenario where the ECB will raise its policy rate by at least 75bps by the turn of the year. For equities, the bond market rout this time wasn’t compensated for by positive earnings headlines. US indices declined up to 1.54 % (Nasdaq). The Euro Stoxx 50 lost 1.81%. The global risk sell-off this time was hefty and clear enough for the USD to reclaim its traditional safe haven role. DXY closed the week at 99.28, to be compared to sub 98 levels at the start of last week. EUR/USD dropped below intermediate support at 1.1655 to close near 1.1625. After a long period of remarkable resilience, sterling also fell prey to the risk sell-off, with EUR/GBP closing north of 0.87.

This morning, the market narrative doesn’t look much different from Friday, with most Asian equites deepening losses. The eco calendar is thin today. So, Friday’s theme’s will still set the tone. We continue to look for comments from ECB members to further clarify their reaction function. This week in the UK, we well get the monthly eco update including inflation data on Wednesday. On Thursday, PMI data will give a new ad-hoc eco and inflation update.

News & Views

The Japanese Prime Minister Takaichi instructed the finance ministry to compile an extra budget to tackle rising commodity prices. She had previously said such measures weren’t necessary but with prices of the likes of oil stubbornly high and rising and reserve funds for other relief measures (e.g. the JPY 170 gasoline price cap) running dry, Takaichi is now changing tac. An extra budget this early in the new fiscal year means it will most likely be funded through additional borrowing. Although its scale isn’t decided yet, fragile (global) bond markets already hit by inflation and fiscal fears are on tenterhooks. Japanese yields are surging this morning with the 40-yr tenor at some point up 17 bps. Gains currently amount to 7 bps at the longest segments of the curve (30-yr-40yr), still enough for the highest levels since its inception. Rising risk premia pressure the yen towards USD/JPY 159 with much of the FX interventions end-April and early-May being undone.

S&P rating agency raised Bulgaria’s credit outlook to positive from stable while keeping the rating at BBB+. It reflects “the potential for Bulgaria's income levels and growth to strengthen, supported by improved political stability, planned reforms, and EU fund disbursements.” This followed a breakthrough in Bulgaria’s five year political stalemate after former president Radev’s party secured an absolute parliamentary majority in the April 19 snap elections. Political paralysis is expected to make way for reforms which combined with Eurozone entry should support Bulgaria's gradual income convergence with that of peers. Economic growth is seen at averaging 2.6% through 2029 with the Middle East conflict only a moderate drag in the short term due to the country’s diversified energy mix. 2026 inflation could amount to 5.3%, materially up from 3.5% expected earlier due to energy prices. Budgetary performance has weakened in recent years, but S&P sees gradual consolidation from the 3.5% of GDP in 2025

Gold price extended losses below $4,650 before the bulls appeared. WTI Crude oil prices are rising and could climb further higher toward $105.

Important Takeaways for Gold and WTI Crude Oil Prices Analysis Today

• Gold price failed to clear $4,800 and declined steadily against the US Dollar.
• There is a key bearish trend line forming with resistance at $4,625 on the hourly chart of gold at FXOpen.
• WTI Crude oil prices are moving higher above the $100.00 pivot zone.
• There is a connecting bullish trend line forming with support at $101.80 on the hourly chart of XTI/USD at FXOpen.

Gold Price Technical Analysis

On the hourly chart of Gold at FXOpen, the price failed to settle above $4,800 and reacted to the downside, as discussed in the previous analysis. The price traded below $4,750 and $4,700 to enter a short-term bearish zone.

There was a sharp drop below $4,650. The price settled below the 50-hour simple moving average, and RSI dipped below 30. Finally, it tested the $4,480 zone. A low was formed at $4,480, and the price is now correcting some losses.

Immediate hurdle on the upside is $4,550 or the 23.6% Fib retracement level of the downward move from the $4,775 swing high to the $4,480 low. The first major barrier for the bulls could be $4,625 and the 50% Fib retracement. There is also a key bearish trend line forming with resistance at $4,625.

A close above $4,625 could initiate a recovery wave to $4,710. An upside break above $4,710 could send Gold price toward $4,780. Any more gains may perhaps set the pace for an increase toward $5,000.

If there is no fresh increase, the price could continue to move down. Initial support on the downside is near the $4,480 level. The first key area of interest might be $4,420. If there is a downside break below $4,420, the price might decline further. In the stated case, the price might drop to $4,200.

WTI Crude Oil Price Technical Analysis

On the hourly chart of WTI Crude Oil at FXOpen, the price started a fresh increase from $95.20 against the US Dollar. The price gained bullish momentum after it broke $98.00.

There was a sustained upward movement above $99.50 and $100.00. The bulls pushed the price above the 50-hour simple moving average, and the RSI climbed toward 80. A high was formed near $103.85 before there was a minor pullback. The price declined toward the 23.6% Fib retracement level of the upward move from the $95.23 swing low to the $103.85 high.

However, the bulls are active above $102.00. Immediate resistance is near $103.80. If the price climbs further, it could face hurdles near $104.25.

The next major stop for the bulls might be $105.00. Any more gain might send the price toward $106.50. Conversely, the price might correct gains and test a connecting bullish trend line with support at $101.80.

The next area of interest on the WTI crude oil chart could be $99.45 and the 50% Fib retracement. If there is a downside break, the price might decline to $97.00. Any more losses may perhaps open the doors for a move toward $95.20.

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Daily Pivots: (S1) 211.12; (P) 211.67; (R1) 212.07; More...

Intraday bias in GBP/JPY mains mildly on the downside for 210.43 support. Break there will confirm resumption of whole decline from 216.58. Next target is 100% projection of 216.58 to 210.43 from 214.40 at 208.25. For now, risk will stay on the downside as long as 214.40 resistance holds, in case of recovery.

In the bigger picture, while the fall from 216.58 is steep, there is no clear sign of trend reversal yet. The long term up trend could still extend to 61.8% projection of 148.93 (2022 low) to 208.09 (2024 high) from 184.35 at 220.90 on resumption. However, sustained break of 55 W EMA (now at 205.91) will argue that it's already in medium term down trend for 184.35 support.

Daily Pivots: (S1) 184.19; (P) 184.51; (R1) 184.86; More...

Intraday bias in EUR/JPY remains neutral at this point. As noted before, pullback from 187.93 could have completed at 182.01 already. Further rise is in favor as long as 184.02 minor support holds. Above 185.44 will target a retest on 187.93 high. Nevertheless, break of 184.02 minor support will turn bias back to the downside towards 182.01 again.

In the bigger picture, the pullback from 187.93 is steep, there is no sign of reversal yet. Uptrend from 114.42 is still expected to resume at a later stage to 78.6% projection of 124.37 (2022 low) to 175.41 (2025 high) from 154.77 at 194.88. However, sustained break of 55 W EMA (now at 178.27) will argue that it's already in a medium term down trend to 175.41 resistance turned support and below.

Daily Pivots: (S1) 0.8703; (P) 0.8716; (R1) 0.8734; More…

Intraday bias in EUR/GBP remains on the upside for 0.8740 resistance. Decisive break there should pave the way through 0.8788 to retest 0.8863 high. On the downside, below 0.8700 minor support will turn bias neutral again.

In the bigger picture, focus is back on 38.2% retracement of 0.8821 to 0.8863 at 0.8618. Strong rebound from there will retain medium term bullishness. Rise from 0.8221 should resume through 0.8863 at a later stage. Nevertheless, sustained break of 0.8618 will confirm that whole rise from 0.8221 has completed at 0.8863. Deeper decline should then be seen to 61.8% retracement at 0.8466 at least.

Daily Pivots: (S1) 1.6174; (P) 1.6226; (R1) 1.6311; More...

Intraday bias in EUR/AUD stays neutral first. On the upside, firm break of 1.6293 resistance will suggest that a short term bottom was already formed at 1.6108. Bias will be turned tot he upside for 55 D EMA (now at 1.6464) and possibly above. On the downside, below 1.6108 will extend larger fall from 1.8554 to 1.5913 fibonacci level.

In the bigger picture, fall from 1.8554 (2025 high) is in progress and deeper decline should be seen to 61.8% retracement of 1.4281 to 1.8554 at 1.5913, which is slightly below 1.5963 structural support. Decisive break there will pave the way back to 1.4281 (2022 low). For now, risk will stay on the downside as long as 55 W EMA (now at 1.7012) holds, even in case of strong rebound.

Daily Pivots: (S1) 0.9135; (P) 0.9143; (R1) 0.9154; More....

Intraday bias in EUR/CHF is mildly on the downside with breach of 0.9136 temporary low. Sustained trading blow 0.9155 cluster support (38.2% retracement of 0.8979 to 0.9264 at 0.9155) will argue that rise from 0.8979 has completed. Deeper fall should be seen to 61.8% retracement at 0.9088 and possibly below. On the upside, break of 0.9177 resistance will bring stronger rally back to retest 0.9264.

In the bigger picture, considering bullish convergence condition in W MACD, a medium term bottom should be in place at 0.8979. Sustained trading above 55 W EMA (now at 0.9241) will add more credence to this case. Further break of 0.9394 resistance will pave the way to 0.9660 resistance next. However rejection by the 55 W EMA will set up another fall through 0.8979 low at a later stage.

Daily Pivots: (S1) 1.3718; (P) 1.3742; (R1) 1.3771; More...

USD/CAD's rebound from 1.3549 is still in progress and intraday bias remains on the upside. This rise is seen as the third leg of the corrective pattern from 1.3480. Further rise would be seen towards 1.3965 resistance. On the downside, below 1.3682 minor support will turn intraday bias neutral first.

In the bigger picture, price actions from 1.4791 are seen as a corrective pattern to the whole up trend from 1.2005 (2021 low). Deeper fall could be seen, as the pattern extends, to 61.8% retracement of 1.2005 to 1.4791 at 1.3069. However, decisive break of 38.2% retracement of 1.4791 to 1.3480 at 1.3981 will argue that the correction has completed with three waves down to 1.3480 already.

Daily Pivots: (S1) 0.7115; (P) 0.7168; (R1) 0.7198; More...

Range trading continues in AUD/USD and intraday bias stays neutral at this point. With 0.7101 support intact, further rise remains in favor. On the upside, firm break of 0.7277 will resume larger up trend. However, decisive break of 0.7101 will bring deeper decline back towards 0.6832 support.

In the bigger picture, rise from 0.5913 (2024 low) is still in progress. Decisive break of 61.8% retracement of 0.8006 to 0.5913 at 0.7206 will solidify the case that it's already reversing the down trend from 0.8006 (2021 high). Further rally should then be seen to retest 0.8006. For now, outlook will remain bullish as long as 0.6832 support holds, in case of pullback.

Daily Pivots: (S1) 158.35; (P) 158.59; (R1) 158.99; More...

USD/JPY's rise from 155.01 is in progress and intraday bias remains on the upside. As this rebound is seen as the second leg of the corrective pattern from 160.71, strong resistance should emerge from there to limit upside. On the downside, break of 157.30 minor support will argue that the third leg could have started, and target 155.01 support instead.

In the bigger picture, for now, corrective pattern from 161.94 (2024 high) is still seen as completed at 139.87. Rise from there is seen as resuming the long term up trend. So, break of 161.94 is expected at a later stage to resume the long term up trend. However, sustained break of 55 W EMA (now at 154.36) will dampen this view and bring deeper fall back towards 139.87 to extend the pattern from 161.94.