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Gold Bears Take Back The Baton

gold Bears Take Back The Baton

Gold Bears Take Back The Baton Post FOMC and Powell’s Bullishness

Gold dropped following the FOMC presser from which Powell rescued the dollar with an upbeat assessment of the US economy delivered to reporters who scrutinised the U.S. recovery. 

Gold has tested the familiar lows of 1273 again on the rise in the greenback and bears are set a technical break to the downside. 

The FOMC stole the limelight today and the poor data from the US has been forgotten as Powell brushed it off when reports questioned his outlook considering the negative implications it (US manufacturing PMI) could have for the economy on a forward time scale. Instead, much like the FOMC statement, the governor of the Federal Reserve stuck to his mantra that, “Our baseline view remains that with a strong job market and continued growth, inflation will return to 2% over time.

FOMC Statement 

Here is the new statement which remains basically consistent with the Fed’s script:

“Information received since the Federal Open Market Committee met in March indicates that the labor market remains strong and that economic activity rose at a solid rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Growth of household spending and business fixed investment slowed in the first quarter. On a 12-month basis, overall inflation and inflation for items other than food and energy have declined and are running below 2 percent. On balance, market-based measures of inflation compensation have remained low in recent months, and survey-based measures of longer-term inflation expectations are little

changed.”

As for Gold, the precious metal is back testing a key support area having dropped out of the rising interim channel and the case is building up for a continuation of a southerly trajectory within the descending wedge. Below the 38.2% Fibo, 1275 and 1266, prospects switch back to the 200-D EMA and confluence area of the 50% retracement target of 1250/1253 respectively.

Article by FXStreet

USD/JPY Falls Back To 200-Day MA

UsD/JPY Falls Back To 200-Day MA, Further Losses Likely

USD/JPY is struggling to capitalize on Monday’s bullish candlestick pattern. A break below the 200-day MA, currently at 111.55, looks likely, as the pair has dived out of a rising trend line.

Technical Overview

USD/JPY created an inverted bullish hammer at the 200-day moving average (MA) line on Monday. So far, however, the follow-through has been anything but bullish, which takes the shine off the hammer candle.

As of writing, the spot is trading at the 200-day MA line of 111.55, having faced rejection at 111.69 earlier today.

A failure to capitalize on the inverted bullish hammer and the violation of the ascending trend line, as seen in the 8-hour chart below, indicates scope for a deeper drop below the 200-day MA of 111.55.

Fundamental Overview

The USD/JPY pair edged higher at the beginning of the week, although it faltered near the 112.00 figure, ending the day at 111.70. The advance was backed by US Treasury yields, which recovered from Friday’s lows amid resurgent spending in the US. According to March data, Personal Spending posted its largest one-month growth since 2009, up by 0.9% when compared to February, spooking fears of an economic slowdown. The benchmark yield for the 10-year Treasury note was up to 2.53%. Additionally,  US equities managed to post a modest intraday advance, trimming pre-opening losses.

Japan started the week with a holiday that will extend during the upcoming days, as the country established an unprecedented 10-day holiday amid the Emperor´s abdication in favor of his son. The macroeconomic calendar will be quite light throughout the week, with nothing scheduled in the country.

Article by FXStreet

Goldman Sachs EUR/USD Prediction

Goldman Sachs EUR/USD Prediction

EUR/USD To Drop To 1.10 In The Next Three Months – Goldman Sachs

Goldman Sachs strategists expect little downside in the American Dollar in the near-term and see the EUR/USD pair falling to the psychological support of 1.10 in the next three months.

The shared currency is currently trading at 1.1150 with the German 10-year bond yield below zero.

The investment bank favors pro risk USD neutral trades, emerging market (EM) currencies with funding from the EUR or low-yielding EM currencies.

Article by FXStreet

AUD/USD Breaks 100-Day SMA

AUD/UsD: Sellers Aim For 0.7095 Support Line After Breaking 100-Day SMA

Investors turn to the greenback in search of risk aversion ahead of major global markets come into play.

Doubts over Chinese stimulus and break of 100-day SMA also weigh on Aussie.

Having breached 100-day SMA, AUD/USD drops to the lowest levels in nearly a fortnight as traders preferred the US Dollar (USD) in search of risk safety ahead of global markets appear in full form today. 

Even if Japan and China were active throughout the recent holiday season, absence of other major market players dimmed the trading sentiment since Friday.

Above all, prospects of China cutting down on its monetary policy measures have been negatively affecting the antipodeans off-late.

Global barometer of risk sentiment, the US 10-year treasury yield trims more than one basis point as it seesaws around 2.579%.

Investors await Wednesday’s headline consumer price index (CPI) and Friday’s gross domestic product (GDP) figures from the US in order to determine near-term trade direction.

Aussie inflation numbers might portray soft price pressure whereas the US economic growth is expected to weaken.

For the purpose of immediate catalysts, the US new home sales, house price index and Richmond Fed Manufacturing Index will be given higher importance coupled with news developments surrounding the US-China trade talks.

AUD/USD Technical Analysis

Even if 50-day simple moving average (SMA) level of 0.7110 is likely immediate support for the pair, major attention could be given to the seven-week-old ascending trend-line near 0.7095 as a break of which can fetch the quote 0.7050 and 0.7030 rest-points.

Meanwhile, an upside closing beyond 100-day SMA level of 0.7135 can propel prices to 0.7170 and 200-day SMA level of 0.7190.

Article by FXStreet

USD/JPY Fades After 2019 High

USD/JPY Fades After 2019 High

USD/JPY Fades After Fresh 2019 High, Back Below 112.00

USD/JPY hit a fresh year-to-date high of 112.17 earlier today. So far, however, the follow-through has been weal.

The pair has fallen back below 112.00, despite an above-forecast China macro data. The futures on the S&P 500 and treasury yields are also struggling to cheer China data.

USD/JPY is currently trading at 111.95, having hit a 2019 high of 112.17 earlier today.

The lack of strong follow-through has weakened the bullish case put forward by Friday’s convincing move above 111.82 (April 5 high).

Also, the pair’s inability to hold above 112.00 is somewhat surprising as China’s first quarter GDP data and March industrial production and retail sales figure released earlier today was risk-supportive.

That said, the futures on the S&P 500 have also failed to pick up a strong bid in response to China data. At press time, the futures are trading at 2,913, representing just 0.08 percent gain on the day. Further, the 10-year treasury yield is also flat-lined on the day near 2.6 percent.

 

Article by FXStreet