EURUSD
- The dollar began the week stronger ahead of central bank policy meetings.
- U.S. and euro zone business activity improved in April, easing concerns about a potential recession.
- The European Central Bank (ECB) is expected to raise rates by 25bp, with a possibility of a 50bp hike, during its upcoming meeting.
- ECB President Christine Lagarde believes that inflation in the euro zone is still high, and monetary policy needs more work to achieve the 2% target.
- EUR/USD is currently trading around 1.0890, and traders will be watching the central bank meetings closely for any indication of future policy decisions.
| SMA (1D) | Rising |
|
|
| RSI (1D) | Slightly Rising |
|
|
| MACD (1D) | Neutral |
Closing statement: Overall, the EUR/USD market is currently being influenced by the anticipation of central bank policy meetings and economic data releases. While the dollar has been strengthening, business activity data has been positive for both the US and euro zone, reducing concerns of a recession. The upcoming ECB meeting is expected to result in a quarter point rate hike, with a possibility of a 50bp hike, as the ECB aims to combat high inflation.
GBPUSD
- GBP/USD slipped 0.05% to $1.2436, testing support at around 1.2425 in a ranging motion.
- This week is quieter for economic reports with house prices being featured.
- Traders are debating the scale of rate cuts expected as early as July through the end of the year due to recent economic data pointing to slowing U.S. growth, but with parts of the economy showing resilience and inflation remaining sticky.
- The DXY traded mostly flat at 101.75 but was on course for a monthly loss of more than 0.7%, having fallen over 2% in March.
| SMA (1D) | Slightly Rising |
| ||
| RSI (1D) | Neutral | |||
| MACD (1D) | Slightly Falling |
|
Closing statement: The GBP/USD pair continues to trade in a ranging motion, with support at around 1.2425. The week ahead is expected to be quieter for economic reports, with house prices being the focus. Traders remain uncertain about the scale of rate cuts expected in the U.S. as some parts of the economy show resilience while inflation remains high. The DXY traded mostly flat this morning but is on course for a monthly loss of more than 0.7% after falling over 2% in March.
GOLD
- Gold prices remained flat after recent losses on Monday, as fears of an interest rate hike and a recent spike in Treasury yields continued to weigh on the precious metal's demand.
- The US Federal Reserve is widely expected to raise rates by another 25 basis points at next week's Federal Open Market Committee (FOMC) meeting, but the focus will be on the guidance for the future rate path.
- Markets are pricing in a small but growing possibility of another 25 basis points hike in June, despite the expected pause in June.
- Gold's recent decline comes after the price surged to near record highs, fuelled by increased safe haven demand amid concerns of a potential banking crisis and recession.
Closing statement:Gold's recent decline highlights the ongoing concerns about the impact of rising interest rates and yields on the precious metal's demand. While the Federal Reserve is expected to signal a pause in June, the possibility of another rate hike and uncertainty about the economic outlook could continue to affect gold prices in the coming months.
CRUDE OIL
- Crude oil traded 0.74% lower at $77.36 a barrel, testing the 100-day moving average.
- U.S. rate hike and recession fears have cut into the OPEC+-hyped rally in crude, handing oil bulls their first week of losses after a four-week winning streak.
- The dollar’s rebound earlier this week from the one-year lows hit last week was the catalyst to the change in the fortunes of those long oil.
- News of job layoffs by major corporations operating in the United States reinforced fears of business slowdowns and an impending recession.
| SMA (1D) | Rising |
|
| |
| RSI (1D) | Neutral | |||
| MACD (1D) | Slightly Falling |
|
Closing statement: The crude oil market has been facing downward pressure due to a combination of factors, including U.S. rate hike and recession fears, a rebounding dollar, and news of job layoffs. With prices once again close to falling below the $80 a barrel level, the market is watching closely to see how these factors will continue to impact the price of crude oil.
DAX
- The DAX index in Germany traded 0.35% lower, the CAC 40 in France dropped 0.27%, and the FTSE 100 in the U.K. fell 0.19%.
- Profit-taking was seen in the DAX 40 due to severely overbought conditions, but no apparent sell signal yet.
- European stock markets edged lower on Monday as investors were cautious at the start of a week that includes key economic releases and earnings from top lenders and tech companies on Wall Street.
- The earnings season kicks into high gear this week, with Alphabet, Microsoft, Amazon, and Meta Platforms all due to report. This will be a key test for markets with investors on the lookout to see if strong gains in the tech sector so far this year are justified.
| SMA (1D) | Rising |
|
|
| RSI (1D) | Slightly Falling |
|
|
| MACD (1D) | Neutral |
Closing statement:The week ahead is expected to be eventful, with major economic releases and earnings reports from top companies. Investors will be closely watching for any indications of how the global economy and markets may be impacted, especially amid ongoing concerns about inflation, interest rates, and the potential for a recession.