EURUSD
- The EUR/USD is currently forming a tight trading range above the moving average, with bulls hoping for an upside breakout and bears looking for a downside breakout.
- Traders should wait for consecutive closes below the moving average before looking to sell.
- The market is likely to pull back soon, with the channel that began on March 24th transitioning into a trading range, favouring prior higher lows getting tested.
- The corporate earnings season in Europe saw stock markets rise, led by tech giant Meta Platforms and Mercedes Benz raising its outlook for its vans division, while NatWest Group missed expectations and saw its stock fall over 5%.
- The ECB is expected to raise interest rates in May, with future monetary policy decisions still up for debate.
- The euro zone Q1 GDP is expected to rise 0.2%, while French and Spanish GDP numbers offered hope for an upside surprise as they came in stronger than expected.
- Oil prices edged higher, helped by upbeat corporate earnings, but are set to post a second weekly drop, taking their drops close to 10% over the past two weeks.
- Gold futures fell 0.4% to $1,991.65/oz, while EUR/USD traded 0.2% lower at 1.1002.
| SMA (1D) | Slighty Rising |
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| RSI (1D) | Falling |
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| MACD (1D) | Neutral |
Closing statement: Despite the EUR/USD forming a tight trading range, traders should wait for a strong breakout before making any moves. The corporate earnings season in Europe has been mixed, with Mercedes Benz raising its outlook while NatWest Group missed expectations. The ECB's decision to raise interest rates in May will be closely watched, as will the euro zone Q1 GDP release. Oil prices are set to post a second weekly drop, while gold futures fell.
GBPUSD
- GBP/USD fell 0.1% to 1.2481, with the US Dollar strengthening against the Pound.
- Bearish sentiment persists for GBP/USD as the pair is currently testing slope support and could potentially break lower.
- The upcoming US Federal Reserve meeting is expected to raise interest rates but pause on further hikes in June.
- The Bank of England is expected to hold interest rates steady, but policymakers remain cautious about inflation.
- Inflation numbers from Germany and France, as well as the euro zone first-quarter gross domestic product release, could also impact GBP/USD movements.
| SMA (1D) | Neutral | |||
| RSI (1D) | Slightly Rising |
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| MACD (1D) | Neutral |
Closing statement: The GBP/USD pair fell 0.1% to 1.2481, as the dollar index rebounded from its recent lows. With the Federal Reserve's interest rate decision and the release of the core personal consumption expenditures index coming up, market participants are closely monitoring the US economy and its impact on the greenback. Furthermore, the bearish outlook for GBP/USD indicates a potential continuation of its downward trend if the slope support is broken, with the USDX serving as a key indicator for its direction.
GOLD
- Gold prices fell for a third straight session due to stronger-than-expected US inflation and labour market data, which increased fears of more Federal Reserve rate hikes.
- The softer-than-expected US GDP data showed that the economy was cooling under high interest rates and inflation, but the Fed may still have enough headroom to hike rates.
- The central bank is widely expected to raise interest rates by 25 basis points when it meets next week, with any signals on the future of monetary policy being closely watched.
- Gold may see increased demand later this year, especially if the US slips into recession and when the Fed pauses its rate hike cycle.
- The yellow metal had rallied close to record highs earlier in April on this notion and was still set to close the month nearly 1% higher.
- Copper prices weakened on Friday and were set for steep losses this week as fears of slowing economic growth weighed, due to weak US GDP readings and Chinese data showing that industrial profits shrank more than expected.
- Gold struggles as yields push higher, and investors shift their focus back to inflation.
Closing statement: While gold prices fell for a third straight session due to stronger-than-expected US inflation and labour market data, the yellow metal still had a mild gain this week, snapping two straight weeks of losses. The market is closely watching for any signals on the future of monetary policy as the central bank is widely expected to raise interest rates by 25 basis points when it meets next week. Though gold struggles as yields push higher and investors shift their focus back to inflation, it may see increased demand later this year, especially if the US slips into recession and when the Fed pauses its rate hike cycle.
CRUDE OIL
- Brent/Crude futures for June were up by 0.6%, at $78.84 a barrel, and the more
- The disappointing US economic data and uncertainty over further interest rate hikes weighed on the demand outlook for oil, leading to a second week of declines for oil prices.
- The US Federal Reserve, the Bank of England, and the European Central Bank are all expected to raise rates at their coming meetings, causing concern among investors that potential interest rate hikes could slow economic growth and dent energy demand.
- On the supply side, Russian Deputy Prime Minister Alexander Novak said that the OPEC+ group sees no need for further output cuts despite lower-than-expected Chinese demand, but the organization could adjust policy if necessary.
- Energy Information Administration data showed that US crude oil and gasoline inventories fell more than expected last week as demand for the motor fuel picked up ahead of the peak summer driving season.
| SMA (1D) | Neutral | |||
| RSI (1D) | Neutral | |||
| MACD (1D) | Falling |
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Closing statement: Oil prices managed to eke out a small gain after two days of heavy selling, but the disappointing US economic data and uncertainty over further interest rate hikes continue to weigh on the demand outlook. However, the fall in inventories and increase in demand ahead of the summer driving season may provide some support to oil prices.
DAX
- The DAX index in Germany traded 0.2% higher at 03:45 ET (07:45 GMT) on Friday, April 28th.
- Mercedes Benz (ETR:MBGn) stock fell 0.3% after the German vehicle manufacturer posted a fall in year-on-year earnings even as it raised the outlook for its vans division, seeing higher demand in the U.S. and China.
- The state of North Rhine-Westphalia, Germany’s most populous, released its April consumer price index earlier Friday, coming in at an annual 6.8%, still at an elevated level.
- The euro zone first-quarter gross domestic product release is also due later in the session and is expected to rise 0.2% in the first quarter, an improvement from the flat growth in the previous three months, an annual rise of 1.4%.
- Both the French and Spanish GDP numbers came in stronger than expected, offering hope for an upside surprise in the euro zone GDP release.
| SMA (1D) | Slightly Rising |
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| RSI (1D) | Falling |
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| MACD (1D) | Slightly Falling |
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Closing statement:The DAX40 continues to struggle with resistance at the 15973 level, while European markets are expected to open lower on Thursday due to concerns over the health of the U.S. banking industry and global economic slowdown. Deutsche Bank's better-than-expected 9% rise in Q1 profits may provide some support to the markets.