Sample Category Title

At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 4.35 per cent.

Inflation picked up materially in the second half of 2025, and information since the beginning of this year confirms that some of this increase reflected greater capacity pressures. In addition, the conflict in the Middle East has resulted in sharply higher fuel and related commodity prices, which are already adding to inflation. There are early signs that many firms experiencing cost pressures are looking to increase prices of their goods and services. Short-term measures of inflation expectations have also risen.

The Bank has updated its forecasts to incorporate recent data and developments in the Middle East. The baseline forecast, which assumes that the conflict is resolved soon and fuel prices decline, sees underlying inflation peaking higher than was expected in February. It then declines as demand growth slows and capacity pressures ease in response to higher interest rates.

Financial conditions have tightened this year. Money market interest rates and government bond yields have risen, and the exchange rate has appreciated. But credit is readily available to both households and businesses.

There are materially heightened uncertainties about the outlook for domestic economic activity and inflation. With the conflict in the Middle East continuing, there are plausible scenarios where inflation is higher and activity lower than envisaged under the baseline forecast. A longer or more severe conflict could put further upward pressure on global energy prices; this would push up near-term inflation and could also increase inflation further out as these costs are passed through and if price rises get built into longer term inflation expectations. But higher prices and prolonged uncertainty may cause growth to be lower in Australia’s major trading partners and also in Australia.

Decision

As expected, developments in the Middle East are having an impact on inflation. Higher fuel prices are adding to inflation and there are indications that this is likely to have second-round effects on prices for goods and services more broadly. This inflation impulse is in addition to the high inflation recorded around the start of 2026, reflecting capacity pressures in the economy.

In light of these considerations, the Board assessed that inflation is likely to remain above target for some time and that the risks remain tilted to the upside, including to inflation expectations. It was therefore judged appropriate to increase the cash rate target.

The Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions. In doing so, it will pay close attention to developments in the global economy and financial markets, trends in domestic demand and the outlook for inflation and the labour market. Having raised the cash rate three times, monetary policy is well placed to respond to developments and the Board is focused on its mandate to deliver price stability and full employment. It will do what it considers necessary to achieve that outcome.

Today’s policy decision was made by majority: eight members voted to increase the cash rate target by 25 basis points to 4.35 per cent; one member voted to leave the cash rate target unchanged at 4.10 per cent.

Key takeaways

• Macro risks and policy divergence in focus: Markets are bracing for the Reserve Bank of Australia rate decision, while strong US data reinforces a “higher-for-longer” Fed stance. Meanwhile, escalating US–Iran tensions have pushed oil prices higher, keeping geopolitical risk elevated.
• Cross-asset pressure from rising yields: Elevated real yields are weighing on growth stocks and gold, while the US dollar holds firm within its range. Oil remains supported above $100, maintaining a bullish structure amid supply disruption concerns.
• Key market drivers ahead: The spotlight is on the RBA decision, US ISM Services PMI, and Fed commentary, with FX (especially AUD and JPY), equities, and commodities poised for volatility depending on policy signals and macro data.
• Chart of the day: WTI crude minor bullish structure remains intact above $100.20 key support. Next intermediate resistances at 112.84 and $116.56/119.54

Top macro headlines

• RBA rate decision in focus: Markets are fully priced for the Reserve Bank of Australia to hike rates today by 25 bps to 4.35% on the cash policy rate (third consecutive time), the accompanying statement and press conference are crucial for hints on whether the RBA will remain on a longer hawkish path.
• US manufacturing resilience: Recent factory orders data for March outperformed expectations (actual: 1.5% m/m, consensus: 0.5%, Feb: 0.3% revised from 0%), reinforcing the "higher-for-longer" narrative for the Federal Reserve and keeping US Treasury yields elevated.
• Middle East peace talks stagnate: The month-long US-Iran ceasefire agreement, since 8 April, is now in jeopardy as the US and Iran exchanged fire in the Persian Gulf over the US Navy’s facilitation of the passage of two US-flagged ships through the Strait of Hormuz. Iran also attacked the UAE with ballistic missiles, cruise missiles, and drones. Brent crude rallied by 4.5% to close Monday’s US session at $114.07/bbl.
• Yen intervention watch: Following last week's dramatic moves where the USD/JPY plunged 2.4% on Thursday, 30 April, from a high of 160.73, the pair has stabilized near 156.50, but traders remain cautious of potential secondary intervention from Tokyo during the London/NY overlap.

Key macro themes

• Monetary policy divergence: A clear divide is emerging between the Fed's wait-and-see approach and the potential for selective tightening in APAC (Australia/Japan) to combat imported inflation.
• The return of real yields: As inflation expectations stabilize but nominal yields remain high, rising real yields are starting to pressure speculative growth stocks and non-yielding assets like gold. The recent rebound (Wed to Fri) seen in gold (XAU/USD) has fizzled out at US$4,645, right below its 20-day moving average (US$4,700), acting as a key near-term resistance.
• Supply chain realignment: Weekend discussions on trade tariffs continue to drive institutional rotation into domestic-centric industrial plays and away from globalized consumer staples.

Global market impact (last 24 hours)

• Equities: S&P 500 futures are flat in early trade in today’s early Asian session after the cash index slipped 0.4% on Monday. Technology stocks' outperformance is cooling as semiconductor stocks digest recent gains.
• Fixed Income: The US 10-year yield is hovering near 4.15%. Curve inversion remains a primary concern for credit markets.
• FX: The DXY rose for the second consecutive session, holding above its 97.95 key near-term support, but remains capped below its 99.16 near-term range resistance since 8 April. EUR and GBP trimmed last Thursday’s gains on rising geopolitical tensions in the Middle East. AUD shed -0.5% to 0.7167 ahead of the RBA decision but still holding above its 20-day moving average at 0.7145.
• Commodities: Brent and WTI crude are steady at around $113/bbl and $107/bbl. Gold (XAU/USD) remains soft after Monday’s 1.9% decline. It is now trading at $4,521, testing last Wednesday, 29 April low of $4,510.

Asia Pacific impact

• Stock markets: The ASX 200 is trading cautiously ahead of the RBA. The Hang Seng Index and China A50 may find support above 25,675 and 15,375, respectively, despite a firm yuan, given elevated oil prices. Japan is closed for a holiday today.
• Currencies: The AUD/USD is the most volatile pair in the region, currently testing 0.6620. The JPY is largely rangebound but remains the primary source of volatility in regional carry trades.
• Regional Outlook: The resilient China manufacturing PMI data (staying above 50) released last week is providing a temporary buffer for Southeast Asian exporters, despite the high global sovereign bond yields environment.

Top 4 Events to watch today

1. RBA Interest Rate Decision (AU) - 12:30 pm SGT: Market is expecting a third 25 bps hike to 4.35% on the cash policy rate, reinforced by renewed inflation pressures. Impact: AUD pairs, ASX 200.
2. RBA Press Conference (AU) - 1:30 pm SGT: Looking for clues whether the current interest rate hike cycle will extend further. Impact: AUD pairs, ASX 200.
3. ISM Services PMI (US) - 10:00 pm SGT: A critical gauge of the dominant sector of the US economy (consensus: 53.7, Mar: 54.0) Impact: USD, US stock indices, Treasuries.
4. Fed Bowman Speaks (US) - 10:00 pm SGT: Seeking clues on the Fed's monetary policy stance on elevated oil prices. Impact: Short-end Treasuries, USD.

Chart of the day - WTI crude remains bullish above $100.20

Fig. 1: West Texas oil CFD minor trend as of 5 May 2026 (Source: TradingView)

The price actions of West Texas oil CFD (a proxy of WTI crude futures) remain in a short-term bullish structure as it continues to oscillate within a minor ascending channel in place since 17 April 2026 low.

In addition, the hourly RSI momentum indicator remains supported by an ascending trendline above the 50 level, which suggests short-term bullish momentum remains intact.

Watch the $100.20 short-term pivotal support to maintain a bullish bias. A clearance above $112.84 near-term resistance sees the next intermediate resistances coming in at $116.56/119.54 ( the range top of 9 March/7 April 2026).

However, a break and an hourly close below $100.20 jeopardizes the bullish tone for a minor corrective slide to retest the intermediate supports at $95.10 and $90.50 (also close to the 50-day moving average).

Key Highlights

• Gold started a fresh decline below the $4,650 support.
• A connecting bearish trend line is forming with resistance at $4,610 on the 4-hour chart.
• WTI Crude Oil regained traction and climbed above $105.
• EUR/USD failed to stay above 1.1775 and corrected gains.

Gold Price Technical Analysis

Gold failed to surpass $4,900 and trimmed gains against the US Dollar. The price dipped below $4,750 and $4,650 to enter a bearish zone.

The 4-hour chart of XAU/USD indicates that the price even declined below $4,600, the 100 Simple Moving Average (red, 4 hours), and the 200 Simple Moving Average (green, 4 hours). A low was formed at $4,500, and the price is now consolidating losses.

On the upside, immediate resistance is $4,550. The next major resistance sits near $4,600. There is also a connecting bearish trend line forming with resistance at $4,610.

The main resistance could be near the trend line at $4,650. A clear move above $4,650 could open the doors for more upside. In the stated case, the bulls could aim for a move toward $4,740 or even $4,780.

If there is another decline, Gold might find bids near the $4,500 level. The first major support sits at $4,320. The next support could be $4,200, below which the price might slide to $4,150. The main support sits at $4,000. Any more losses might call for a test of $3,800 or even $3,650 in the coming days.

Looking at WTI Crude Oil, the price regained bullish momentum above $100 and might continue to rise in the short term.

Economic Releases to Watch Today

• US ISM Services Index for April 2026 – Forecast 53.7, versus 54.0 previous.
• US New Home Sales for Feb 2026 (MoM) – Forecast -0.4% versus -17.6% previous.

Gold resumed its near-term slide as tensions in the Strait of Hormuz escalated sharply, after Iran struck multiple vessels and set a UAE oil port ablaze. The developments triggered a fresh surge in oil prices and lifted the Dollar on safe-haven demand, reinforcing downside pressure on precious metals. Focus now shifts to the 4,400 Fibonacci support level, with a decisive break likely to open the path toward the 4,000 psychological handle.

The escalation followed the launch of the U.S. naval operation “Project Freedom,” aimed at escorting merchant ships through the Strait. Rather than easing tensions, the move appears to have provoked a direct response from Iran, intensifying maritime confrontation. With expectations growing that shipping disruptions could persist until August or beyond, markets are increasingly pricing in a prolonged supply shock.

Technically, the near term decline in Gold has resumed after a brief recovery, with rejection at 55 4H EMA (now at 4634.82) reinforcing bearish bias. Deeper fall is expected to 61.8% retracement of 4,098.45 to 4,889.24 at 4,400.53. Decisive break below this level would likely trigger an acceleration of the decline, opening the path toward a retest of 4,098.45 low and potentially extending toward 4,000 psychological level.

On the upside, a break above 4,660.21 would be needed to signal that a temporary bottom is in place. Until then, the bias remains to the downside, particularly if oil prices stay elevated and geopolitical tensions continue to drive inflation expectations higher.

IMF Managing Director Kristalina Georgieva warned at a conference that the Fund’s baseline outlook is no longer applicable as the Middle East conflict continues. The IMF’s “reference scenario,” which assumed a short-lived war and projected global growth of 3.1% with inflation at 4.4%, is now “further and further behind in the rear-view mirror,” she said.

According to Georgieva, the global economy has effectively shifted into the IMF’s “adverse scenario,” driven by prolonged conflict, oil prices around or above $100 per barrel, and rising inflationary pressures. Under this scenario, global growth slows to 2.5% in 2026, while headline inflation rises to 5.4%, reflecting a more challenging macro environment.

She also warned of significantly worse outcomes if the conflict persists into 2027, particularly if oil prices approach $125. In such a case, inflation would rise further, with a growing risk that inflation expectations become de-anchored—posing a more persistent threat to economic stability.

The IMF had outlined last month three possible paths for the global economy—reference, adverse, and severe scenarios—but current developments suggest a clear shift away from the baseline. With downside risks intensifying, the global outlook is increasingly defined by slower growth and higher inflation.

New York Fed President John Williams said in a speech monetary policy is “well positioned” to navigate the current environment, signaling no urgency for further tightening even as uncertainty rises due to the Middle East conflict.

Williams emphasized that the Fed is not in a position to offer strong forward guidance, noting that “the future is difficult to see” and risks to both inflation and growth have increased. He added that he does not see any data at present that would justify a rate hike in the near term.

At the same time, Williams maintained that rates will likely need to be lowered eventually as inflation moves back toward the 2% target. He expects inflation to remain around 3% this year, pressured by tariffs and energy costs, before easing, while warning that oil price risks could still surprise to the upside.

On the broader outlook, Williams expects growth of 2.0%–2.25% this year with a stable labor market. While acknowledging recent dissent within the Fed, he downplayed divisions. “I would say there was far more agreement about where policy is today”, he added.

• Silver and Gold can't sustain their previous momentum, seeing renewed bearish flows amid tensions resurfacing
• Their inverted correlation to Oil and the US Dollar remains strong, with the two bouncing back to start the week
• Intraday timeframe analysis for XAG/USD (Silver) and XAU/USD (Gold)

Today, the Middle East conflict has entered yet another dangerous stage.

Although this is the third week of the ceasefire, many now doubt it will hold. In the last 24 hours, Iran reportedly attacked several merchant ships and tankers in the Strait of Hormuz; The conflict has also widened, with direct attacks on the United Arab Emirates and major incidents in Abu Dhabi and Dubai.

With these new tensions, the strong inverse relationship between precious metals, crude oil, and the US Dollar picks up again. Both the US Dollar and Oil prices have jumped at the start of the week, putting extra pressure on the metals market.

Gold vs WTI Crude Inverse Correlation – Source: TradingView. May 4, 2026

Metals are once again trading more like risk-on assets. Unlike in the past, gold is not acting as a safe haven. Instead, as the conflict continues, the yellow metal along with its precious mates, have seen a steady decline throughout the war.

The asset class is falling sharply amid today's worsening sentiment: Silver is down 5% on the session session, Platinum is now trading well below $2,000, and Copper prices have fallen far from their recent $6 highs.

Daily Metals Performance. Courtesy of Finviz – May 4, 2026

Are precious metals no longer seen as safe havens?

This ongoing war is serving as a crucial test of that historic Market assumption. However, to console aficionados of the alternative asset class, the ultimate flight-to-quality assets—government bonds (US Treasuries particularly)—are also getting heavily battered by these flows.

At the heart of these moves are worries about inflation.

High oil prices and supply chain problems are pushing interest rates higher for longer. While metals are falling faster than stocks right now, this sharp drop could trigger more trouble ahead for all financial markets.

Let's explore the recent shifts in an intraday timeframe analysis of Gold (XAU/USD) and Silver (XAG/USD) to identify where are the key levels to watch ahead.

Gold (XAU/USD) 4H Chart and levels

Gold (XAU/USD) 4H Chart, May 4, 2026 – Source: TradingView

The ongoing rejection in Gold has been severe, with a clear downward channel forming throughout the past week.

Currently testing its $4,500 support, similar as last week lows after rejecting its 4H 50-period MA, bulls will have to show up to avoid an important support break.

• Breaking below the level opens the door to $4,400
  • The 200-day MA comes next at $4,280
  • Any continuation will retest the $4,100 War lows
• To regain a bullish momentum, the metal will need to rebound in the current support to break above the bear channel and 4H 50-period MA ($4,640)

Intraday Timeframe Levels to watch for Gold (XAU/USD):

Resistance Levels:

• $4,640 - 4,670 4H 50 & 200 MA & Bear Channel (Short-Term) bullish above
• $4,850 to $4,900 Major Resistance (bullish above)
• $5,100 Pivotal Resistance
• $5,400 mini-resistance

Support Levels:

• December 2025 Support $4,500 to $4,550 (bearish below)
• Pivotal Support $4,325 – $4,400
• Main Channel Lows Support $4,100 (Long-term bearish below)
• Next Support $3,880 to $4,000

Silver (XAG/USD) 4H Chart and levels

Silver (XAG/USD) 4H Chart, May 4, 2026 – Source: TradingView

Silver is also forming a clear downtrend since reaching its top on April 16, officially breaking its $74-$75 pivot Zone and key Moving averages.

The momentum is decisively bearish for now, hence short-term traders will want to either enter on a retest of the $74 Moving average bands or through a sell stop below $72.

The next stop for the metal is at $70, with this level being a final test before at ~10% drop to $63-$64.

• The war lows would come next at $61
• To inverse the bearish momentum, bulls will want to see a daily close above $76
  • A short-term bullish breakout confirms above $80

Higher Timeframe Levels to watch for Silver (XAG/USD):

Resistance Levels:

• Pivot lows $74.50 - $75 (bullish above)
• Pivot highs $79 - $79.50 (4H 200-period MA – bullish above)
• $84 Major level
• Key Range Resistance $90 to $92
• $96.47 March highs (higher odds of All-time highs if break above)
• Current Record $121.67

Support Levels:

• $70 - $72 Minor Support (recent bounce – Bearish below)
• December FOMC Minor Support $64 to $66
• $61.10 Past Session lows
• $50 to $55 October Resistance now Major Support
• Silver's 2011 All-time highs $49.81

Safe Trades and May the 4th be with you!

EURGBP: ⬆️ Buy

• EURGBP reversed from support zone
• Likely to rise to resistance level 0.8685

EURGBP currency pair recently reversed from the support zone between the strong long-term support level 0.8620 (which has been repeatedly reversing the price from the start of 2025), lower daily Bollinger Band and the 50% Fibonacci correction of the upward impulse from May.

The upward reversal from this support zone stopped impulse wave 3 of the active intermediate impulse wave (C).

Given the strength of the support level 0.8620 and the oversold daily Stochastic, EURGBP currency pair can be expected to rise to the next resistance level 0.8685.

EURCHF: ⬆️ Buy

• EURCHF reversed from support zone
• Likely to rise to resistance level 0.9250

EURCHF currency pair recently reversed from the support zone between the support level 0.9150 (which has been reversing the price from the end of March), lower daily Bollinger Band and the 38.2% Fibonacci correction of the upward impulse from March.

The upward reversal from this support zone stopped the c-wave of the previous ABC correction b from March.

EURCHF currency pair can be expected to rise to the next resistance level 0.9250 (which stopped previous waves a and b).