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GOLD:Prices Hit Weekly High, Eyes on US Inflation & Fed MeetingIt appears that gold has experienced a fresh long bullish impulse in the long direction, resulting in a surge in prices for two consecutive days, with a new weekly high of around HKEX:2 ,021 on Wednesday. However, there is a possibility of a pullback, as XAU/USD retreated to the HKEX:2 ,010 region during the first half of the European session. Traders are closely monitoring the release of the US consumer inflation figures and the Federal Reserve's latest policy meeting minutes, which are expected to influence market expectations regarding the Fed's next policy move. The US Consumer Price Index (CPI) report is particularly significant in this regard. The Fed minutes will also provide valuable insight into how policymakers viewed the need for higher rates in the midst of banking sector turmoil. This information will enable investors to determine the near-term trajectory for the US Dollar (USD), which in turn will provide a fresh directional impetus for the non-yielding Gold price.
FOREXCOM:XAUUSDLong
by FOREXN1
12
GBP/USD Under Selling Pressure Due to Expected Fed TighteningThe GBP/USD currency pair experienced some selling pressure after a brief surge to the 1.2445 level during intraday trading, leading to a partial reversal of the previous day's significant upward movement. The spot prices have now fallen to a new daily low in the early part of the European trading session, with bears anticipating a sustained break below the significant round-number level of 1.2400 before making any further trades. The possibility of additional policy tightening by the Federal Reserve (Fed) has served as a floor for US Treasury bond yields and has acted as a tailwind for the US Dollar (USD), which, in turn, is placing downward pressure on the GBP/USD pair. Market participants have been pricing in a higher likelihood of another 25 bps rate hike at the upcoming FOMC meeting in May. The bets were reinforced by hawkish comments made overnight by Philadelphia Fed Bank President Patrick Harker, who indicated that the US central bank is fully committed to bringing inflation back down to the 2% target. Our approach is centered on a retest area of 1.2400, where we anticipate a pullback, allowing us to observe whether the price will continue to move in the direction of the main trend.
Long
by FOREXN1
7
USD/JPY: Japan's Confidence Rises but US Employment is STRONG !Bank of Japan Governor Ueda recently gave his first news conference since taking on his new role, and he made it clear that he has no plans to make any major changes to the current monetary policy. While some people expected Ueda to take steps towards normalization, such as removing yield curve control, he stated that the current policy is appropriate for the economy. There has been speculation that Ueda will make significant moves in the coming months, as Japan faces inflation above the Bank of Japan's 2% target. However, Ueda's message of "stay tuned for more of the same" has lowered expectations of a policy shift at the April 28th meeting, causing the yen to decline. Despite this, there was some positive news for Japan's policy makers, as consumer confidence rose to 33.9 in March, the highest level since May 2022. However, consumer confidence remains in negative territory, below the 50-level which separates contraction from expansion. In the United States, the employment report for March was solid, with 236,000 jobs added to the economy. Although this was slightly softer than February's reading, the labor market has remained resilient to rate hikes, and the odds of a 25-bp rate hike have increased to 68% according to the CME Group.
Long
by FOREXN1
7
GOLD Holds Steady Despite Market Anxiety of US Inflation DataGold prices have dipped towards HKEX:1 ,990.00 as the US Dollar Index (DXY) makes gains. Despite this, investors remain optimistic about a potential rebound in US inflation figures, buoyed by solid labor market conditions. While gold prices are declining towards an upward-sloping trendline plotted at HKEX:1 ,885.77, there is hope that Wednesday's US inflation data will provide further guidance. Although the headline Consumer Price Index (CPI) is expected to moderate due to lower gas prices in March, core inflation - which excludes oil and gas prices - may show a surprise upside as household earnings remain strong. Although S&P500 futures have extended losses on fears of further rate hikes by the Federal Reserve (Fed), there is a general feeling of positivity within the market. Fed Chair Jerome Powell is expected to push rates above 5% in order to address persistent inflation, potentially leading to higher earnings for acquiring fresh talent. Despite a drop in US Treasury yields, the outlook for gold prices remains optimistic.
FOREXCOM:XAUUSDLong
by FOREXN1
15
EUR/USD Maintains Uptrend Despite Easter Monday Holiday PressureThe EUR/USD pair has pulled back from its intraday high of 1.0900, but it's still under pressure as traders look for fresh clues to continue the uptrend that has lasted for four weeks. This is likely due to the Easter Monday holiday mood and anticipation of upcoming top-tier events and data releases this week. Traders are feeling optimistic about EUR/USD prices, and this can be attributed to concerns about the US Dollar's status as a reserve currency, as well as the more hawkish comments from the European Central Bank (ECB) compared to the Federal Reserve (Fed). While we may not see many big movements during the Easter Monday holiday, upcoming events such as the US Consumer Price Index (CPI) data and the latest Federal Open Market Committee (FOMC) Monetary Policy Meeting Minutes will be essential in providing clearer direction for the EUR/USD pair.
by FOREXN1
9
GBP/USD Showing Bullish Continuation Pattern 50% Fibo 1.2400 SUPDuring early Easter Monday morning in London, the GBP/USD currency pair is experiencing a drop for the fourth consecutive day, as it takes offers to refresh the intraday low near 1.2400. This is a result of the US Dollar rebounding due to risk aversion and hawkish bets on the US Federal Reserve (Fed), following last week's pullback from a 10-month high. Meanwhile, the Bank of England's (BoE) next move is uncertain, causing doubts about the pair's future direction. Based on our analysis, the GBP has experienced a pullback towards the 1.2400 area, which coincides with the 50% Fibonacci level. We have identified a bullish flag pattern of continuation, indicating that there is a high probability of a new bullish impulse for the Cable.
by FOREXN1
10
GOLD Price Remains Defensive Amid Recession Fears and GeopoliticDuring the early hours of Good Friday, the XAU/USD remains defensive at $2,007 after experiencing the largest drop in two weeks. The lack of liquidity driven by the holiday and caution ahead of the top-tier United States employment data for March is restricting XAU/USD movements. Furthermore, the fear of a recession is also affecting the Gold price, even though the US Dollar is struggling to recover, mainly due to the downbeat US statistics. The consecutive weakness in the United States data and downbeat US Treasury bond yields led to fears of a recession in the world’s largest economy. As a result, the Gold price recently experienced the biggest daily loss in nearly two weeks, ending a three-day uptrend. The latest US employment data showed that the US Initial Jobless Claims improved to 228K, whereas the Challenger Job Cuts for March rose to 89.703K from 77.77K prior. Furthermore, the US JOLTS Job Openings dropped to a 19-month low in February, and the ADP Employment Change for March disappointed markets with 145K figures. Additionally, the US ISM Services PMI for March also dropped to 51.2 versus 54.5 expected and 55.1 prior, amplifying pessimism. Reuters recently flagged fears of a recession by citing the Federal Reserve (Fed) Chairman Jerome Powell’s preferred bond market indicator’s latest slump. The news reported, “Research from the Fed has argued that the ‘near-term forward spread’ comparing the forward rate on Treasury bills 18 months from now with the current yield on a three-month Treasury bill was the most reliable bond market signal of an imminent economic contraction.” Wall Street is licking its wounds, and the US 10-year and two-year Treasury bond yields are also staying pressured, despite the latest consolidation around 3.30% and 3.83% in that order. Due to the looming fears of a recession, Gold traders will have to closely examine the incoming US employment data to trade better. Moreover, escalating geopolitical fears surrounding the US, China, Russia, and North Korea also seem to poke XAU/USD prices. China’s criticism of the US-Taiwan ties and dislike of the White House competition hints at worsening relations among the world’s top two economies. The same should weigh on the Gold price, considering China’s status as one of the world’s biggest Gold consumers, as well as due to the likely US Dollar’s haven demand. In addition, the Ukraine-Russia war and Moscow’s tussle with the West, as well as North Korea’s warning to use nuclear powers, also roil the geopolitical context and prod the Gold buyers. In contrast to the aforementioned catalysts, the latest moves in the market against the US Dollar’s reserve currency status seem to allow the Gold price to stay on the bull’s radar amid the downbeat greenback. Russia’s latest likes for the Chinese Yuan and the China-Brazil pact to ignore the US Dollar as an intermediate currency challenge the greenback’s imperial status. Adding strength to the Gold’s likelihood are the chatters that some of the US Congressmen have proposed a Gold Standard Restoration Act to defend the US Dollar. The bill suggests re-pegging the greenback with a fixed amount of the Gold’s weight, like it was before 1971. Looking forward, the Gold price relies on how the United States employment data arrives for March, especially amid recession woes and receding hawkish Fed bets. The market forecasts suggest a softer print of the headline Nonfarm Payrolls (NFP), to 240K from 311K prior, as well as no change in the Unemployment Rate of 3.6%. However, the mixed expectations for the Average Hourly Earnings make the outcome even more interesting for Gold
FOREXCOM:XAUUSDLong
by FOREXN1
32
EUR/USD Pauses Weekly Gains on Friday Holiday and US Jobs DATAOn Good Friday, the EUR/USD pair took a pause after a three-week uptrend, but it still posted its third consecutive weekly gain due to the European Central Bank's relatively more hawkish bias. The pair is currently hovering around 1.0920 as Euro bulls await the US Nonfarm Payrolls, which will be released on Friday. The holiday has also limited the pair's reaction to data. The latest data from Germany and the Eurozone kept the European Central Bank hawks on the table, unlike their US counterparts. Germany's Industrial Production (IP) rose by 0.6% YoY in February, beating market forecasts of -2.7% and the previous reading of -1.6%. Additionally, the monthly figures were also better than expected, with a growth of 2.0% versus 0.1% forecasted and 3.7% in the previous reading. Germany Factory Orders improved to -5.7% YoY for February, compared to -12.0% revised down prior and -10.5% market forecasts, while the MoM growth came in at 4.8% versus 0.3% expected and 0.5% previous readings. However, Eurozone S&P Global Composite PMI and Services PMI declined to 53.7 and 55.0 in March, respectively. In contrast, US economic health remains a concern as the Federal Reserve's preferred gauge cited recession woes. The recent research from the Fed argued that the "near-term forward spread" comparing the forward rate on Treasury bills 18 months from now with the current yield on a three-month Treasury bill was the most reliable bond market signal of an imminent economic contraction. The European Central Bank policymakers' hawkish tone is favorable for the Euro buyers, but the downbeat US employment clues and the IMF's Managing Director Kristalina Georgieva's prepared remarks about the global economy growing by less than 3% in 2023, down from 3.4% in 2022, put a floor under the EUR/USD prices. All eyes are on the US employment numbers, which are expected to have a softer print of the headline Nonfarm Payrolls (NFP) to 240K from 311K prior, with no change in the Unemployment Rate of 3.6%. The mixed expectations for the Average Hourly Earnings make the outcome even more interesting.
by FOREXN1
10
Is it possible for the price of SILVER to reach $26? LONG IDEAOver the last few days, the price of silver (XAG/USD) has been fluctuating around $25.00. After reaching a one-year high on Wednesday, the value has retreated and remained relatively stable during Good Friday's inactive Asian session, hovering around $24.95. Despite this, the precious metal remains in a good position for a fourth consecutive weekly gain. Market signals in the options market suggest a positive trend. For instance, the one-month risk reversal (RR) for the silver price, which measures the spread between the call and put options, registered a slight daily decline of -0.1000 at the end of Thursday's North American session. Nevertheless, it is worth noting that the weekly RR has increased for four consecutive weeks, reaching 0.2000 in the latest data. Additionally, the options market signals for April are also strong after experiencing the most significant gains in a year in March. Despite the positive signals in the options market, the Good Friday holiday could limit the XAG/USD movements ahead of the highly anticipated Nonfarm Payrolls (NFP) report.
OANDA:XAGUSDLong
by FOREXN1
3
BoE survey: lower inflation, but GBP/CHF downside risk.The most recent survey from the Bank of England's Monthly Decision Maker Panel (DMP) was published on Thursday. The survey showed that DMP members anticipate that the Consumer Price Index (CPI) inflation will be 5.8% one year from now, which is a slight decrease from the 5.9% forecasted in February. The DMP is a group of decision-makers from various businesses that provides insights into economic conditions and helps inform the Bank of England's policy decisions. The survey results reflect the expectations of these influential individuals, who anticipate a small reduction in inflation over the next twelve months. The Bank of England closely monitors inflation as it is a key indicator of economic stability. Inflation can impact the value of money, interest rates, and consumer spending. The central bank's monetary policy decisions are heavily influenced by inflation expectations. In summary, the latest Bank of England DMP survey indicates a slight reduction in CPI inflation expectations for the upcoming year. This information will be considered by the Bank of England as it makes monetary policy decisions in the coming months. However, in the GBP/CHF currency pair, there is evidence of a Double Top pattern forming, and if the Neckline of the pattern is breached, the price may decrease. This development suggests that caution is still warranted, despite the positive inflation news for the GBP.
by FOREXN1
5
GOLD Price Stable Despite US Data Impact on YieldsThe price of gold has remained relatively stable following its recent multi-month high, showing only mild fluctuations. This has been attributed to the continued impact of United States data, which has been weighing heavily on US Treasury bond yields and allowing the price of gold to remain relatively stable. This has also been due to threats to the US dollar's reserve currency status, as well as downbeat yields which have prompted investors to favor gold over other options. Despite a recent rise to the highest levels seen since March 2022, the precious metal's previous increase may be linked to the weakening of the US dollar amid downbeat US data and a decrease in hawkish bets on the Federal Reserve's next move. The continued recession has also contributed to the recent recovery in the price of gold, which has been buoyed by mixed signals and clues from the market. Overall, the price of gold has risen due to softer US Treasury yields and a rebound in the US dollar, which has prompted investors to favor gold over other options. Key negative factors for bond coupons and the greenback, which have led to an increase in the price of gold, include the employment numbers and the latest activity data. These factors, along with the potential for the US central bank to pause its rate hike trajectory in May, have led to a nearly 57% chance that the US dollar will weaken further, making gold an attractive option for investors. Despite some mild losses and fluctuations in recent days, multiple catalysts suggest that the price of gold may continue to rise in the future.
FOREXCOM:XAUUSDLong
by FOREXN1
11
GOLD Price Surges as XAU/USD Breaks $2,000 ResistanceInvestors who believe in the value of gold are celebrating as the price of XAU/USD slowly rises to $2,025, hitting a 13-month high due to a general weakening of the US Dollar. This positive trend is driven by the market's uncertainty over the US central bank's aggressive rate hike policy and its response to hawkish Fed talks. Additionally, concerns over the reserve currency status of the US Dollar and low Treasury bond yields are contributing to the strengthening of the XAU/USD price. Furthermore, the recent successful break of the $2,000 key resistance level, which now serves as immediate support, has encouraged gold buyers. However, despite this positive outlook, the market remains cautious ahead of the release of top-tier US data concerning jobs and activities, which may impact the price of gold. Geopolitical tensions surrounding Russia and China could also pose a challenge for gold buyers. Despite these challenges, the XAU/USD bulls remain optimistic due to gold's traditional status as a safe haven and the broad weakness of the US Dollar.
FOREXCOM:XAUUSD
by FOREXN1
29
EUR/USD:Market Risks Weigh on Exchange Rate, says INGAccording to economists at ING, the Euro to US Dollar exchange rate (EUR/USD) is likely to be primarily driven by the US Dollar in the near future. The pair may see a surge above the 1.1000 level, but the economists believe that it will be challenging to sustain any further gains. The economists note that if the ISM services reading comes in below consensus, it could trigger a break above the 1.1000 level. However, they caution that the sustainability of rallies beyond that point would need to be tested against the market's confidence to consistently unwind defensive dollar positions. This is particularly important given the ongoing risks of fresh financial turmoil and tighter liquidity. Looking to the European Central Bank (ECB), several key members of the ECB Governing Council, including Boris Vujcic, Bostjan Vasle, and Chief Economist Philip Lane, are scheduled to speak. While there is always a risk of surprise remarks by ECB officials, the economists believe that these risks have moderated recently, as most key speakers have aligned themselves with a pledge to keep raising rates, in line with their position on the dovish/hawkish spectrum. In conclusion, while the EUR/USD pair may see a temporary surge above 1.1000, it is unlikely to sustain further gains without the market's confidence in consistently unwinding defensive dollar positions. Furthermore, ongoing risks of financial turmoil and tighter liquidity add to the uncertainty surrounding the pair's future movements.
by FOREXN1
9
GBP/JPY:Vulnerable Below 164.0 Amid Positive UK Economic OutlookThe GBP/JPY pair is poised to experience further weakness below 164.00, despite a promising UK economic outlook. The sentiment among UK businesses has improved as political instability and inflationary pressures appear to be easing. However, any positive impact on Japan's inflation caused by external factors could cause problems for BoJ policymakers. The GBP/JPY cross is struggling to stay above the immediate support level of 164.00 during the Tokyo session, despite the Bank of England's (BoE) efforts to curb inflation through quantitative restrictions. BoE policymakers believe that the surge in February's inflation was a one-time occurrence, and that inflation will fall below 4% by the end of the year as energy costs decline. However, the robust economic outlook suggests otherwise. According to a report by Reuters on Tuesday, the British Chambers of Commerce (BCC) said that most UK businesses expect sales to increase in the coming year, a positive development from late 2022, despite experiencing no sales growth in the past three months. The BCC also noted that "business sentiment improved as political turmoil and inflationary pressures showed some signs of easing" after a slump in business confidence in the latter half of 2022. Meanwhile, BoE Chief Economist Huw Pill cautioned on Tuesday that inflation prospects still require careful consideration due to the potential persistence of domestically generated inflation. He also stated that "wage developments, particularly higher frequency indicators of current momentum, appear to be easing." On the Tokyo front, the Japanese Yen remains subdued despite rising oil prices. While this could increase Japan's inflation, any contribution to inflation through external forces would create problems for Bank of Japan (BoJ) policymakers.
by FOREXN1
7
GOLD Price Shows Upside Potential Amid Pennant FormationBased on current analysis, it appears that the price of gold is showing some uncertainty as it moves within a pattern known as a "pennant". Despite this, there is still potential for the price to increase, as there are risks that could push it up. In order for this to happen, the price would need to break above a downward trendline at the price of $2,000, confirming the breakout from the pennant pattern. If this occurs, the price could potentially rise towards the important $2,000 level, with further resistance levels at $2,010 and $2,060. On the other hand, if the price falls below a support level at $1,950, it could lead to increased selling pressure and potentially challenge the low price of $1,950 seen on Monday.
FOREXCOM:XAUUSD
by FOREXN1
29
EUR/USD Expected to Break 1.10 Before US Nonfarm PayrollsBased on the analysis of economists, it is expected that the EUR/USD currency pair will reach the 1.10 level before the release of the US Nonfarm Payrolls data. However, some experts suggest that there may be a pause before this anticipated jump, and the pair may find some support around 1.0870/1.0880 due to a potential recovery of the US Dollar and the need for further tightening by the European Central Bank to address core inflation. Nevertheless, the overall outlook for the EUR/USD remains bullish, and the 1.10 level may be breached next week, unless there is unexpectedly strong data from the US ISM and a generally quiet data calendar until the Nonfarm Payrolls release on Friday.
by FOREXN1
11
EUR/USD: Delayed Move to 1.10 Due to OPEC+ Production CutThe EUR/USD pair was expected to surge past the 1.10 mark this week, as per economists' predictions. However, the recently announced production cut by OPEC+ has given the dollar a much-needed boost, causing a delay in the anticipated move to 1.10. While breaking above 1.10 is still a possibility, the OPEC+ cut has had a positive effect on the USD, making it necessary for some disappointing US data to come out before the EUR/USD can make the predicted move. This lack of Euro-specific drivers this week makes it unlikely to happen, though the bulls would still prefer the pair to finish the week around 1.0850/1.0900. If the US data does turn out to be strong and the Fed makes hawkish comments, the pair may test the supports at 1.0700 and 1.0600.
by FOREXN1
39
USD/JPY Rises Near Two-Week High Ahead of NFP ReportThe USD/JPY pair has surged to an intraday high near 133.50, close to the highest level in two weeks. The recent rise can be attributed to higher US Treasury bond yields and a stronger US dollar as the market anticipates the release of the crucial Nonfarm Payrolls (NFP) report on Friday. The recent challenges to market sentiment, mainly from the OPEC+ group's inflation worries, have also boosted the pair's rally. However, mixed domestic data and pre-NFP jitters have challenged the recent buyer sentiment. The Bank of Japan's closely watched Tankan Large Manufacturing Index for Q1 2023 declined to 1.0 from the previous reading of 7.0 and an expected 3.0. Meanwhile, Japan's Jibun Bank Manufacturing PMI for March improved to 49.2 from 48.6, indicating a contraction in private manufacturing activities. On the other hand, the US Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred inflation gauge, fell to 4.6% YoY in February, below the market expectation of 4.7%. Core PCE inflation rose 0.3% on a monthly basis, lower than the market expectation of 0.4%. The receding hawkish calls surrounding the Bank of Japan (BoJ) have also supported USD/JPY buyers. However, the market seems to have given little attention to the recent easing fears of a banking crisis and the Fed's hawkish moves. Currently, Japan's Nikkei 225 is up 1.0% intraday to 28,041, while the S&P 500 Futures snapped a three-day uptrend. The US 10-year and two-year Treasury bond yields are trading with mild gains near 3.52% and 4.11%, respectively, after paring the latest losses. Looking forward, USD/JPY is expected to continue its rebound amid firmer yields and a light calendar. However, any disappointment in the incoming PMIs and NFP may weigh on the US dollar prices, considering the receding hawkish bets on the Fed.
by FOREXN1
15
EUR/CAD: Possible Reversal MovementThere may be a potential reversal in the movements of EUR/CAD following the breaking of its dynamic trendline and testing the top at 1.4940. The negative correlation between EUR/CAD and EUR/USD suggests that an increase in EUR/USD and a decrease in EUR/CAD may occur. We are currently waiting for this to happen. Our indicator has already signaled a sell entry, which we have acted upon. There is a strong possibility of this trend continuing further.
by FOREXN1
10
GBP/JPY Rallies to One-Month High on Upbeat Sentiment and BrexitGBP/JPY continues its winning streak, with bulls pushing the pair to a new one-month high around 165.50. The positive sentiment driving the rally could be attributed to upbeat news on Brexit, with UK Prime Minister Rishi Sunak announcing a £1.8billion boost as Britain signed up to the Trans-Pacific Partnership. However, the latest Japan inflation data released on Friday was lower than previous levels, with the Tokyo CPI at 3.3% in March, compared to the expected 2.7%. Despite this, the GBP/JPY remained strong, with yields reflecting the market's cautious mood ahead of top-tier inflation numbers from the US and UK. Other economic data from Japan showed growth in industrial production and retail trade, but a surprise jump in unemployment rate led to weakness in the Japanese Yen (JPY). Meanwhile, Bank of Japan policymakers defended their easy money status, which contrasts with the hawkish rhetoric among Bank of England officials, supporting the GBP/JPY prices. Additionally, recent easing of market fears from banking turmoil and hopes of less severe rate hikes from key central banks have boosted the pair's momentum. The US 10-year Treasury bond yields remain pressured, while Wall Street closed positively for the third consecutive day, with S&P 500 Futures also printing mild gains. Looking ahead, the final reading of the UK's Q4 GDP will be crucial to watch for the intraday move. However, the headlines surrounding inflation data from Eurozone and the US, as well as central bankers' reactions, will attract major attention.
by FOREXN1
6
NZD/USD Climbs to Highest Level Since February 16The NZD/USD pair has climbed for two consecutive days and reached its highest level since February 16. The Kiwi, being sensitive to market risk, has benefited from the current risk-on environment, as the USD remains subdued. However, the bulls are wary and are looking for fresh impetus from the crucial US Core PCE Price Index. The NZD/USD pair has gained positive momentum for two successive days and touched a peak not seen since February 16. However, the pair has encountered resistance near the 0.6300 mark, and the spot prices are currently trading within the range of 0.6270-0.6275 during the early European session. The prevailing positive tone around equity markets has provided a significant boost to the risk-sensitive Kiwi, as investors' confidence is on the rise with the fears of a full-blown banking crisis diminishing. The hope for a robust economic recovery in China has added to the investors' optimism, and the official Chinese PMI data for March has shown the fastest growth in the services sector in 12 years. Though the growth in the manufacturing sector has slowed down, it is still higher than expected. The uncertainty surrounding the Federal Reserve's rate-hike path has made it difficult for the USD to gain any traction. This has further increased the appeal of the NZD/USD pair. The Fed had recently signaled that it might pause the rate-hiking cycle due to the banking sector's turmoil. However, with the possibility of a widespread banking crisis averted, there are speculations that the US central bank might return to its inflation-fighting rate hikes. Moreover, three Fed officials have backed the case for more rate increases to lower high levels of inflation. Despite the bullish sentiments for the NZD/USD pair, traders are hesitant to take aggressive bearish bets on the USD. They are waiting on the sidelines, anticipating the release of the US Core PCE Price Index, which is the Fed's preferred inflation gauge. This data is expected to play a crucial role in influencing market expectations about the next policy move, and it could drive demand for the USD in the near term. This, in turn, will determine the direction of the next move for the major.
by FOREXN1
3
GBP/USD: US Inflation Gauge Signals Tightening Continues.According to the latest economic data, the US Federal Reserve's preferred inflation gauge suggests that the cumulative tightening measures are still curbing inflation. The University of Michigan's Consumer Sentiment was worse than anticipated, but inflation expectations cooled. The GBP/USD Price Analysis shows that the Pound Sterling is trading with decent losses, with pressure from a resurgent US Dollar trimming its Thursday's losses. While inflation data could lead to a pivot in the Fed's policy stance, market participants are still buying the US Dollar as the week, month, and quarter-end approaches. As of writing, the GBP/USD is trading at 1.2331, and it would remain sideways around 1.2300-1.2400, or it could challenge the YTD high if it goes above 1.2400. Despite the lower US inflation, Fed officials remain resolute in their efforts to fight inflation. The US Department of Commerce's economic data revealed that the Fed's favorite inflation gauge, the core PCE, increased by 4.6% YoY, below forecasts and last month's reading of 4.7%. The headline inflation was 5%, indicating that the Fed's cumulative tightening measures continue to keep inflation in check. The Fed Boston President Susan Collins welcomed the news but reiterated that there is still work to be done. The New York Fed President, John Williams, is expected to release newswires later. Meanwhile, the University of Michigan's final March reading showed that the Consumer Sentiment was worse than expected at 62, but inflation expectations decreased. For the one-year horizon, the estimated inflation rate is 3.6%, while consumers estimate inflation to be 2.9% for the 5-year horizon. After the release of US inflation data, the GBP/USD initially traded around 1.2400 before dropping below the central pivot point at 1.2357 and extending its losses towards the 1.2340 area. However, the upward correction was capped at the former, and the GBP/USD resumed its downward trajectory, aiming for a test of the S1 pivot at 1.2320. On the UK front, the economy expanded by 0.1% in Q4 2022 and by 0.6% YoY, according to the Office for National Statistics (ONS) data.
by FOREXN1
21