Sample Category Title

The Australian dollar has posted four straight winning sessions this week and is in positive territory on Friday. In the European session, AUD/USD is trading at 0.6534, up 0.24%. The Aussie has powered higher this week, climbing 1.82%.

Australia’s PPI blows past estimate

Australia’s Producer Prices index jumped 4.3% y/y in the first quarter, up from 4.1% in Q4 2023 and crushing the market estimate of 2.6%. Quarterly, PPI was unchanged at 0.6%, above the market estimate of 0.6%.

The unexpectedly strong PPI release follows the first-quarter CPI report, in which annual CPI dropped in April from 4.1% to 3.6% but was higher than the market estimate of 3.4%. Producers are likely to pass on their higher costs to consumers, which will boost consumer inflation.

The Australian dollar has posted sharp gains this week thanks to the hotter-than-expected CPI and PPI releases. The Reserve Bank of Australia could respond by prolonging its “higher for longer” stance, which would likely dampen consumer spending. We could even see talk of an RBA rate hike, as policy makers remain concerned about a rebound in inflation. The battle with inflation isn’t over, as the final stretch to the 2% target is proving to be difficult, as the Federal Reserve experience has shown.

The week wraps up with the US Core PCE Price Index, which is the Federal Reserve’s preferred inflation gauge. The index is expected to ease to 2.6% y/y in April, down from 2.8% in May. On a monthly basis, the index is expected to remain unchanged at 0.3%. Consumer inflation has been rising in the US, forcing the Fed to delay plans to cut lower rates.

AUD/USD Technical

• AUD/USD is putting pressure on resistance at 0.6555.
• Above, there is pressure at 0.6618.
• 0.6487 and 0.6424 are the next support levels

US personal income rose 0.5% mom or USD 122.0B in March, matched expectations. Personal spending rose 0.8% mom or USD 160.9B, above expectation of 0.6% mom.

Both headline and core PCE price index rose 0.3% mom, matched expectations. Prices for services increased 0.4% mom and prices for goods increased 0.1% mom. Food prices decreased less than -0.1% mom and energy prices increased 1.2% mom.

Over the 12-month period, headline PCE accelerated from 2.5% yoy to 2.7% yoy, above expectation of 2.6% yoy. Core PCE price index was unchanged at 2.8% yoy, above expectation of 2.6% yoy. Prices for services increased 4.0% yoy and prices for goods increased 0.1% yoy. Food prices increased 1.5% yoy and energy prices increased 2.6% yoy.

Full US personal income and outlays release here.

The price of a troy ounce of gold climbed to 2330.00 USD on Friday. This surge was driven by investors' ongoing evaluation of the potential direction of the US Federal Reserve's monetary policy following mixed macroeconomic data.

The US GDP for Q1 did not meet expectations, marking the slowest recovery in two years. The economy expanded by only 1.6%, significantly lower than the forecasted 2.5%. In contrast, GDP growth in Q4 2023 reached 3.4%. The Fed's consensus forecast for 2024 expects economic growth of 2.1%.

The underwhelming economic performance might prompt the Fed to consider a reduction in interest rates. However, a localised acceleration in consumer inflation suggests that monetary policy might remain restrictive for longer.

As long as interest rates remain high, gold's appeal as an investment option is somewhat diminished since it does not generate its yield as bonds do. Nonetheless, in times of rising inflation, gold increasingly becomes a valuable hedge against currency devaluation.

Today, the stock exchange will focus on the March Core PCE figures. These data are expected to provide further insights into the Federal Reserve's monetary policy outlook.

Technical analysis of XAU/USD

On the H4 chart of XAU/USD, a consolidation range has formed above 2346.00, with the ongoing development of the third wave of decline aiming for 2262.22. The local target for this wave at 2296.96 has been reached. Today, a corrective move towards 2346.00 is expected, followed by an anticipated further decline to 2262.22. This bearish scenario is supported technically by the MACD indicator, whose signal line is below zero and is trending downwards towards new lows.

On the H1 chart, the corrective movement towards 2346.00 (testing from below) is continuing. Once completed, a new downward wave towards 2277.00 is expected, potentially reaching 2262.22. This outlook is confirmed by the Stochastic oscillator, with its signal line currently above 80 but poised for a decline towards 20.

The Swiss franc is steady on Friday. In the European session, USD/CHF is almost unchanged at 0.9118.

It has been quite a ride for the Swiss franc, which hit eight-year highs against the US dollar in the last week of 2023. The US dollar has roared back in 2024, surging 8.2% against the Swiss currency. The sharp depreciation of the Swiss franc has not been an unwelcome development for the Swiss National Bank, as it makes Swiss exports more competitive on world markets. The SNB didn’t mind when the Swiss franc was at high levels late last year, as this helped keep inflation in check at a time when the central bank was concerned that inflation might breach the 0% to 2% target.

The SNB lowered interest rates in March, the first major central bank to do so. The SNB is expected to follow through with two more cuts in June and September, although SNB President Jordan sounded cautious in a speech on Thursday. Jordan noted the global environment uncertainty and said that the SNB would adjust its monetary policy again “if necessary.”

Switzerland’s inflation has been stable and the economy is in good shape, which allowed the SNB to cut rates in March. The Credit Suisse Economics Expectations index, released this week, rose to 17.6 in April, its third consecutive acceleration after more than two years in negative territory (the zero level separates optimism from pessimism).

All eyes will be on the US Core PCE Price Index, which will be released later today. The index, which is the Federal Reserve’s preferred inflation gauge, is expected to ease to 2.6% y/y in April, down from 2.8% in May. On a monthly basis, the index is expected to remain unchanged at 0.3%. Consumer inflation has been rising in the US, forcing the Fed to delay plans to cut lower rates.

USD/CHF Technical

• USD/CHF is putting pressure on resistance at 0.9137. Above, there is resistance at 0.9155
• 0.9104 and 0.9086 are providing support

USDJPY surged to new 34-year high on Friday after the Bank of Japan kept its ultra-low interest rates unchanged and lacked to provide clearer signals about the timing of next rate hike, which further deflated yen.

Fresh bullish acceleration on Friday surged through 156.00 barrier, hitting the highest since 1990 (156.82 so far), after surpassing target at 156.36 (Fibo 138.2% projection of the upleg from 140.25).

The pair is on track to extend steep rally into sixth straight week, with weekly close above former pivot at 155.00 and monthly close above broken significant Fibo barrier at 152.60 (38.2% of larger 277.65/75.55 downtrend), to confirm strong bullish signal and open way towards psychological 160 barrier.

Overbought conditions may slow bulls, with limited dips (ideally to be contained by 155.00 support, reinforced by 10DMA) to offer fresh buying opportunities.

Caution on dip below 155.00, though overall bias is expected to remain with bulls while the price stays above broken Fibo barrier at 152.60, reverted to pivotal support..

Res: 157.00; 157.73; 159.11; 160.00.
Sup: 155.74; 155.00; 154.65; 153.55.

Market picture

Market Dynamics: The cryptocurrency market stabilised, losing just 0.1% of capitalisation and dropping to $2.37 trillion over the last 24 hours. After the halving, the bulls intensified their efforts to boost prices, but by the end of the week, the bears took the initiative.

Bitcoin under pressure: Bitcoin has been losing value (0.7%) since early Friday, reaching $64.2K, despite rising 1.2% the day before. The currency continues to correct, remaining at the bottom of the range set in March. The RSI is signalling a possible further decline in price.

Mining gets harder: Bitcoin’s mining complexity increased by 1.99%, reaching a record of 88.1 T, with an average hashrate of 726.3 EH/s.

News background

Morgan Stanley and BTC-ETF: The bank is considering including spot bitcoin-ETFs in its list of recommendations for its brokers.

Wallet growth: The number of bitcoin wallets over $1,000 has doubled since last year to 10.6 million.

Morgan Creek forecasts: The company’s CEO predicts baby boomers will invest more than $300bn in cryptocurrencies in the coming year.

Ethereum ETF: According to Reuters, management companies expect the U.S. SEC to reject applications for spot Ethereum-ETFs after “disappointing” discussions. The SEC has only held a handful of meetings on Ethereum funds.

Stablecoin Act: Standard & Poor’s notes that a payment-stablecoin bill introduced in Congress has the potential to undermine Tether’s dominance. USDT is issued by a non-US company and would be banned from circulation in the US.

GBP/USD is attempting a recovery wave from 1.2300. USD/CAD is consolidating and might aim for a move above the 1.3760 resistance zone.

Important Takeaways for GBP/USD and USD/CAD Analysis Today

• The British Pound started a recovery wave above the 1.2400 resistance.
• There is a key bearish trend line forming with resistance near 1.2520 on the daily chart of GBP/USD at FXOpen.
• USD/CAD is showing positive signs above the 1.3660 support zone.
• There is a major bullish trend line forming with support at 1.3620 on the daily chart at FXOpen.

GBP/USD Technical Analysis

On the daily chart of GBP/USD at FXOpen, the pair started a fresh decline from the 1.2900 zone. The British Pound traded below the 1.2600 support to move into a bearish zone against the US Dollar.

The pair even traded below 1.2400 and the 50-day simple moving average. Finally, the bulls appeared near the 1.2300 level. A low was formed near 1.2299 and the pair is now attempting a recovery wave. There was a fresh upside above the 1.2400 level.

The pair climbed above the 23.6% Fib retracement level of the downward move from the 1.2893 swing high to the 1.22299 low. Immediate resistance on the upside is near a key bearish trend line at 1.2520.

The first major resistance on the GBP/USD chart is near the 1.2600 level or the 50-day simple moving average. A close above the 1.2600 resistance might spark a decent upward wave. The next major resistance is near the 1.2750 level. Any more gains could lead the pair toward the 1.2900 resistance in the medium term.

Initial support sits near 1.2400. The next major support sits at 1.2300, below which there is a risk of another sharp decline. In the stated case, the pair could drop toward 1.2120.

USD/CAD Technical Analysis

On the daily chart of USD/CAD at FXOpen, the pair formed a strong support base above the 1.3180 level. The US Dollar started a fresh increase above the 1.3370 resistance against the Canadian Dollar.

The pair cleared the 50-day simple moving average and climbed above 1.3600. Finally, it tested the 1.3850 zone before there was a downside correction. The pair traded below the 1.3760 support zone. The pair dipped below the 23.6% Fib retracement level of the upward move from the 1.3477 swing low to the 1.3845 high.

However, the pair is now stable above 1.3660, and the 50% Fib retracement level of the upward move from the 1.3477 swing low to the 1.3845 high.

There is also a major bullish trend line forming with support at 1.3620. Initial resistance sits near the 1.3760 level. A clear upside break above 1.3760 could start another steady increase. The next major resistance is the 1.3845 level.

A close above the 1.3845 level might send the pair toward the 1.3950 level. Any more gains could open the doors for a test of the 1.4000 region.

Conversely, the pair could start another decline. Initial support is near the 1.3660 level on the same USD/CAD chart. The next major support is near 1.3620. A downside break below the 1.3620 level could push the pair further lower. The next major support is near the 50-day simple moving average, below which the pair might visit 1.3370.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

The Japanese yen is swinging sharply on Friday. In the European session, USD/JPY is trading at 156.46, up 0.52%.

It has been a busy Friday in Japan. Japanese inflation data, which was released just before the end of the Bank of Japan meeting, was much lower than expected. Tokyo Core CPI, which was overshadowed by the Bank of Japan’s meeting today, eased to 1.6% y/y in April, well below the market consensus of 2.2% and the March reading of 2.4%. This was the lowest level since March 2022.

Tokyo core-core CPI, which excludes fresh food and fuel, slipped to 1.6% y/y in April, down from 2.4% in March and well below the market consensus of 2.7%. This was the lowest pace of inflation since September 2022.

Core inflation is still running above the BoJ’s 2% target, but the Tokyo inflation data raises the question of whether domestic demand and wage growth will increase sufficiently to keep inflation sustainable at the 2% level. Governor Ueda has stated that the service inflation will be a key factor in determining the next rate hike.

At today’s BoJ policy meeting, policy makers maintained the benchmark rate at 0%-0.1% and said they would maintain an accommodative policy “for the time being”. The rate statement did not address the yen, but Governor Ueda issued a warning at his press conference, saying, if yen moves have an effect on the economy and prices that is hard to ignore, it could be a reason to adjust policy”.

The BoJ also raised its outlook for inflation in fiscal 2024 to between 2.5% and 3%, up from 2.2% to 2.5% in the January forecast. At the same time, it downgraded growth projections for fiscal 2024 to between 0.7% to 1%, down from 1% to 1.2% in January.

USD/JPY Technical

• USD/JPY tested resistance at 155.96 earlier. Above, there is resistance at 157.13
• There is support at 154.13 and 153.47

Speaking at SNB's annual shareholder meeting, President Thomas Jordan highlighted the achievement in lowering inflation to below 2%, a milestone that enabled the bank to implement a rate cut last month.

Despite this progress, Jordan emphasized the continuing high levels of uncertainty in the global economic environment, acknowledging the potential for new shocks at any time.

"In the current environment, uncertainty remains elevated, and new shocks can occur at any time," he noted. "We will therefore monitor the ongoing development of inflation closely and adjust our monetary policy again if necessary."

• GBPJPY is in the green again today, a tad below its 9-year high
• The BoJ meeting failed to stop the yen’s underperformance; intervention threat lingers
• Momentum indicators are clearly on the GBPJPY bulls’ side

GBPJPY is trading higher again today, recording its fourth consecutive green candle and preparing to test the June 24, 2015 high at 195.87. The market is digesting the BoJ meeting’s outcome, with the lack of hawkish rhetoric maintaining the underperformance of the ailing yen and increasing the pressure on the Japanese finance ministry to intervene.

Momentum indicators have taken notice of the recent upside sentiment in GBPJPY. More specifically, the Average Directional Movement Index (ADX) edged above its 25-threshold, pointing to a tentatively bullish trend. Similarly, the RSI has climbed to a 2-month high, confirming the ongoing bullish pressure in GBPJPY. More importantly, the stochastic oscillator has returned inside its overbought territory (OB) but maintains a good gap from its moving average. It can stay in the OB area for a while before signalling the possibility of a correction.

Should the bulls remain hungry, they could try to overcome the June 24, 2015 high at 195.87 and record a new 9-year high. They could then set their eyes on a much bigger prize - the February 6, 2003 high at 198.59.

On the other hand, the bears are desperate to regain market control and gradually push GBPJPY towards the July 21, 2005 low at 192.57. They could then test the support set by the January 2, 2024 trendline and the busy 189.61-191.07 range, which is defined by the 50-day simple moving average (SMA).

To sum up, GBPJPY continues its journey north as the dovish BoJ meeting increases the pressure on the Japanese authorities to react in order to control the ongoing yen devaluation.