Notably, the buying boundary on declines - near $1975 - runs near a critical resistance level seen in August 2020 and April 2022, when sellers prevented gold from rallying again after the surge.
The market dynamics suggest that the recent retreat to the $2000 level is a prologue to further gains rather than the end of an extended rally, as was previously the case. This suggests we will soon see prices above $2050 (previous high area) and increased chances of going above $2075 with a renewal of historical highs in the coming weeks.
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The market dynamics suggest that the recent retreat to the $2000 level is a prologue to further gains rather than the end of an extended rally, as was previously the case. This suggests we will soon see prices above $2050 (previous high area) and increased chances of going above $2075 with a renewal of historical highs in the coming weeks.
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#WaveAnalysis
#AUDUSD reversed from key support level 0.6600
• Likely to rise to resistance level 0.6750
AUDUSD currency pair recently reversed up strongly from the key support level 0.6600 (which has been reversing the pair from November), standing close to the lower daily Bollinger Band and the 61.8% Fibonacci correction of the sharp upward impulse from October.
The upward reversal from the support level 0.6600 stopped the previous short-term impulse wave 3 of the impulse wave (3) from April.
AUDUSD can be expected to rise further toward the next resistance level 0.6750 (which stopped the previous waves 4, A, (2) and 2).
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#AUDUSD reversed from key support level 0.6600
• Likely to rise to resistance level 0.6750
AUDUSD currency pair recently reversed up strongly from the key support level 0.6600 (which has been reversing the pair from November), standing close to the lower daily Bollinger Band and the 61.8% Fibonacci correction of the sharp upward impulse from October.
The upward reversal from the support level 0.6600 stopped the previous short-term impulse wave 3 of the impulse wave (3) from April.
AUDUSD can be expected to rise further toward the next resistance level 0.6750 (which stopped the previous waves 4, A, (2) and 2).
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Almost all the gains have come since the start of the day, coinciding with a fresh bout of fear about US regional banks.
US index futures have risen modestly since the start of the day as the banking problems bring a monetary policy reversal closer. And that is another reason for buyers, in this case, medium-term buyers, to be happy.
The bulls in Bitcoin have pushed the price to $29K, consolidating above the 50-day MA. Short-term attention is focused on the $29.4K area, where Bitcoin fell earlier this month, and resistance runs through the local highs of mid to late April. A move higher would pave the way for another test of highs for almost a year.
According to Santiment, bitcoin whales increased their holdings of the first cryptocurrency by 64,000 BTC in April, contrary to the view that the final direction of the asset's movement has yet to take shape. Major investors continue to believe that there are growth prospects for BTC.
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US index futures have risen modestly since the start of the day as the banking problems bring a monetary policy reversal closer. And that is another reason for buyers, in this case, medium-term buyers, to be happy.
The bulls in Bitcoin have pushed the price to $29K, consolidating above the 50-day MA. Short-term attention is focused on the $29.4K area, where Bitcoin fell earlier this month, and resistance runs through the local highs of mid to late April. A move higher would pave the way for another test of highs for almost a year.
According to Santiment, bitcoin whales increased their holdings of the first cryptocurrency by 64,000 BTC in April, contrary to the view that the final direction of the asset's movement has yet to take shape. Major investors continue to believe that there are growth prospects for BTC.
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ECB slows rate hike, but unlikely to stop
The European Central Bank raised interest rates by a quarter of a percentage point to 3.75%, duplicating the Fed's move the day before.
This was the move that market analysts had been predicting, although some central bank officials had been talking about the need for a 50-point hike for weeks. The market may have priced in some probability of such a move, which put pressure on the Euro following the rate announcement.
In a published commentary, the ECB reiterated that inflation has been "too high for too long". The bank continues to focus on solid underline price pressures despite the decline in the headline annual rate.
The European Central Bank raised interest rates by a quarter of a percentage point to 3.75%, duplicating the Fed's move the day before.
This was the move that market analysts had been predicting, although some central bank officials had been talking about the need for a 50-point hike for weeks. The market may have priced in some probability of such a move, which put pressure on the Euro following the rate announcement.
In a published commentary, the ECB reiterated that inflation has been "too high for too long". The bank continues to focus on solid underline price pressures despite the decline in the headline annual rate.
Like the FOMC, the ECB today reminded us of the time lag between interest rate changes and their economic impact. The market took this as a willingness to pause on further hikes. However, we must be cautious with this interpretation, as this comment could also justify a smaller hike rather than signalling a pause.
The ECB has started to raise rates later than the Fed, with higher peak inflation. From this point of view, it is logical to expect that rate hikes will also end later. In 2007-2008, the ECB had a rate of 4% before raising it to 4.25% for six months in response to a surge in energy prices. This time, the ECB will likely continue raising rates sooner than in 2008.
The potential for further hikes in Europe and a pause in America could drive a gradual rise in European currencies against the dollar in the near future.
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The ECB has started to raise rates later than the Fed, with higher peak inflation. From this point of view, it is logical to expect that rate hikes will also end later. In 2007-2008, the ECB had a rate of 4% before raising it to 4.25% for six months in response to a surge in energy prices. This time, the ECB will likely continue raising rates sooner than in 2008.
The potential for further hikes in Europe and a pause in America could drive a gradual rise in European currencies against the dollar in the near future.
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#WaveAnalysis
#WTI reversed from key support level 64.40
• Likely to rise to resistance level 70.00.
WTI crude oil recently reversed up from the key support level 64.40 (previous monthly low from March) standing well below the lower daily Bollinger Band.
The upward reversal from the support level 64.40 is currently forming the daily Japanese candlesticks reversal pattern Hammer.
Given the oversold daily Stochastic, WTI crude oil can be expected to rise further toward the next round resistance level 70.00.
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#WTI reversed from key support level 64.40
• Likely to rise to resistance level 70.00.
WTI crude oil recently reversed up from the key support level 64.40 (previous monthly low from March) standing well below the lower daily Bollinger Band.
The upward reversal from the support level 64.40 is currently forming the daily Japanese candlesticks reversal pattern Hammer.
Given the oversold daily Stochastic, WTI crude oil can be expected to rise further toward the next round resistance level 70.00.
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#WaveAnalysis
#NZDCAD broke daily down channel
• Likely to rise to resistance level 0.8570
NZDCAD currency pair recently broke the resistance trendline of the daily down channel from December (which encloses the previous intermediate ABC correction (B)).
The breakout of this down channel continues the minor impulse wave 3 of the intermediate impulse wave (B) from the middle of last month.
NZDCAD can be expected to rise further toward the next resistance level 0.8570 (which reversed the pair multiple times in March, target price for the completion of the active impulse wave 3).
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#NZDCAD broke daily down channel
• Likely to rise to resistance level 0.8570
NZDCAD currency pair recently broke the resistance trendline of the daily down channel from December (which encloses the previous intermediate ABC correction (B)).
The breakout of this down channel continues the minor impulse wave 3 of the intermediate impulse wave (B) from the middle of last month.
NZDCAD can be expected to rise further toward the next resistance level 0.8570 (which reversed the pair multiple times in March, target price for the completion of the active impulse wave 3).
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The cryptocurrency market capitalisation is marginally lower by 0.1% compared to 24 hours ago, recovering from a 2% drop at the end of the previous day. Most of the top ten cryptocurrencies are losing ground over the last day, while Bitcoin and XRP are slightly gaining.
Bitcoin has risen 0.3% in the last 24 hours and more than 1% since the start of the day. In the early hours of this morning, the price slipped close to $29.5K, the highest level since the end of April. The first cryptocurrency overcame a sharp decline on May 1st and is now testing downside resistance through last month's local highs. A consolidation above this level would be a significant signal for buyers and could trigger a growth surge.
Ethereum’s upward-sloping 50-day moving average regularly supports local dips, as in Bitcoin. The 61.8% Fibonacci retracement of the March-April momentum was also a nominal support line. This is also where the former resistance area from March is located, which now becomes support.
Bitcoin has risen 0.3% in the last 24 hours and more than 1% since the start of the day. In the early hours of this morning, the price slipped close to $29.5K, the highest level since the end of April. The first cryptocurrency overcame a sharp decline on May 1st and is now testing downside resistance through last month's local highs. A consolidation above this level would be a significant signal for buyers and could trigger a growth surge.
Ethereum’s upward-sloping 50-day moving average regularly supports local dips, as in Bitcoin. The 61.8% Fibonacci retracement of the March-April momentum was also a nominal support line. This is also where the former resistance area from March is located, which now becomes support.
The Swiss franc is losing ground due to low inflation
The Swiss franc declined, losing about 1% to 0.8920 after a fresh batch of macroeconomic data. The unemployment rate remains at 1.9%, a historic low. But at the same time, inflation is surprising, falling short of forecasts.
The consumer price index was virtually unchanged over the past month, and the annual inflation rate fell from 2.9% to 2.6%, while economists, on average, expected growth of 0.2% m/m and 2.8% y/y,
respectively. The current inflation rate is the lowest in the last 11 months and very close to the SNB target.
The latter fact has spurred speculation that the country's central bank will refrain from further tightening policy after raising rates by 225 points in the current monetary cycle. However, the head of SNB Jordan is in a hurry to moderate these expectations, not ruling out further rate hikes.
The Swiss franc declined, losing about 1% to 0.8920 after a fresh batch of macroeconomic data. The unemployment rate remains at 1.9%, a historic low. But at the same time, inflation is surprising, falling short of forecasts.
The consumer price index was virtually unchanged over the past month, and the annual inflation rate fell from 2.9% to 2.6%, while economists, on average, expected growth of 0.2% m/m and 2.8% y/y,
respectively. The current inflation rate is the lowest in the last 11 months and very close to the SNB target.
The latter fact has spurred speculation that the country's central bank will refrain from further tightening policy after raising rates by 225 points in the current monetary cycle. However, the head of SNB Jordan is in a hurry to moderate these expectations, not ruling out further rate hikes.
Switzerland's significantly lower inflation is mainly due to the performance of the franc, which is now close to the same levels from which it began its decline against the dollar in early 2021. For comparison, the #EURUSD is now 10% lower; at the worst point, it exceeded 22%.
The franc's strengthening accelerated in March, apparently due to the problems of US banks, which caused steady demand for safe havens such as Switzerland. However, having slipped below 0.8900, #USDCHF was close to the levels from which the SNB turned the pair to growth over the past 11 years.
It is hard to believe that this time the exchange rate will be reversed again by the intervention of the Central Bank since this would contradict the primary policy course. But over the years, support has been formed in this area, which will take a lot of work to pass.
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The franc's strengthening accelerated in March, apparently due to the problems of US banks, which caused steady demand for safe havens such as Switzerland. However, having slipped below 0.8900, #USDCHF was close to the levels from which the SNB turned the pair to growth over the past 11 years.
It is hard to believe that this time the exchange rate will be reversed again by the intervention of the Central Bank since this would contradict the primary policy course. But over the years, support has been formed in this area, which will take a lot of work to pass.
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US stocks and the dollar rose on healthy jobs market report
In April, the US economy added 253k jobs, surpassing expectations of 181k. Over the past 12 months, actual data has consistently exceeded expectations for this indicator.
However, the previous month’s downward revision was considerable, from 71k to 165k.
The unemployment rate fell to 3.4%, beating analysts’ expectations of an increase from 3.5% to 3.6%.
The labour force participation rate remains high at 62.6%, approaching the pre-COVID-19 shutdown level of 63.4%. The recovery can be attributed to a reduction in fear of illness and higher inflation, pushing people into work to maintain their standard of living.
In April, the US economy added 253k jobs, surpassing expectations of 181k. Over the past 12 months, actual data has consistently exceeded expectations for this indicator.
However, the previous month’s downward revision was considerable, from 71k to 165k.
The unemployment rate fell to 3.4%, beating analysts’ expectations of an increase from 3.5% to 3.6%.
The labour force participation rate remains high at 62.6%, approaching the pre-COVID-19 shutdown level of 63.4%. The recovery can be attributed to a reduction in fear of illness and higher inflation, pushing people into work to maintain their standard of living.
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Average hourly earnings rose by 0.5% m/m and 4.4% y/y, better than expected. Despite the rise in employment, the index of total hours worked per week has remained flat since the start of the year, a worrying signal also seen in 2007 and at the end of 2019.
Initially, the market reacted with technical selling of the dollar and buying of equity index futures but quickly digested the news and speculation that there are too few signs of inflationary overheating to force the Fed to raise rates further.
The current report argues for keeping rates at current levels for longer. A healthy labour market typically helps the dollar and stock market by highlighting the strength of the US economy compared to other investment destinations.
Initially, the market reacted with technical selling of the dollar and buying of equity index futures but quickly digested the news and speculation that there are too few signs of inflationary overheating to force the Fed to raise rates further.
The current report argues for keeping rates at current levels for longer. A healthy labour market typically helps the dollar and stock market by highlighting the strength of the US economy compared to other investment destinations.
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The total capitalisation of the cryptocurrency market fell by 2% to $1.14 trillion over the last 24 hours. Over the same period, bitcoin lost 2.6%, Ethereum lost 1.7%, and the top 10 altcoins lost between 1.4% (BNB) and 5% (Polygon).
Bitcoin lost around $1500 on Monday to $28.5K amid rumours of a possible collapse of Binance. The world's largest cryptocurrency exchange twice suspended BTC withdrawals due to network congestion.
The technical picture shows local victory for the bears, as the sharp drop in price started from the downside resistance that has been in place since the middle of last month. In a strong move, the price broke below the 50-day moving average. The price is testing support near $27K.
According to CryptoQuant, users withdrew more than 195,000 BTC (over $5.6 billion) from Binance in one day. In addition, according to Bloomberg, the US Department of Justice has launched an investigation into the exchange, suspecting it of violating sanctions against Russia.
Bitcoin lost around $1500 on Monday to $28.5K amid rumours of a possible collapse of Binance. The world's largest cryptocurrency exchange twice suspended BTC withdrawals due to network congestion.
The technical picture shows local victory for the bears, as the sharp drop in price started from the downside resistance that has been in place since the middle of last month. In a strong move, the price broke below the 50-day moving average. The price is testing support near $27K.
According to CryptoQuant, users withdrew more than 195,000 BTC (over $5.6 billion) from Binance in one day. In addition, according to Bloomberg, the US Department of Justice has launched an investigation into the exchange, suspecting it of violating sanctions against Russia.
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For the second month, the Dollar Index finds support from declines in the 101 area. Dollar bulls are defending critical levels in the major currency pairs, which could significantly increase the psychological pressure on the US currency. The resolution of this situation is likely to come from politics and macroeconomic data.
The Dollar Index has been hovering around the 101.30 level for the past four weeks. Attempts to break above 102 have been met with increased selling, but the sellers aren’t picking up the declines below 101 either.
The 101 area of the Dollar Index appears to be more important than the round 100 level, as the Dollar’s rally in the first half of 2020 was halted near this level, apart from a brief spike on the unexpected first lockdowns.
The same level 13 months ago triggered an acceleration of dollar inflows and became a game-changing switch in the currency market. The new switch promises to be as important as last year’s, so it will unlikely be quick and easy.
The Dollar Index has been hovering around the 101.30 level for the past four weeks. Attempts to break above 102 have been met with increased selling, but the sellers aren’t picking up the declines below 101 either.
The 101 area of the Dollar Index appears to be more important than the round 100 level, as the Dollar’s rally in the first half of 2020 was halted near this level, apart from a brief spike on the unexpected first lockdowns.
The same level 13 months ago triggered an acceleration of dollar inflows and became a game-changing switch in the currency market. The new switch promises to be as important as last year’s, so it will unlikely be quick and easy.
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Moreover, this change is going to take much work. Between 2006 and 2014, the area of 89 for DXY was a similar historical resistance. It then became an insurmountable support from which the Dollar was called upon in the recessions of 2018 and 2021.
The more localised picture remains on the sell side of the Dollar. The DXY reversed its decline at the end of September last year on signals that the Fed would slow the pace of rate hikes and pause soon. The rally from February to March was based on hawkish inflation data and expectations that the final rate would be higher than initially expected.
The banking problems nailed the Dollar to support at 101 as markets put an imminent reversal of a rate cut back on the agenda. Last week’s employment data and the Fed’s decision did not change market expectations meaningfully.
The more localised picture remains on the sell side of the Dollar. The DXY reversed its decline at the end of September last year on signals that the Fed would slow the pace of rate hikes and pause soon. The rally from February to March was based on hawkish inflation data and expectations that the final rate would be higher than initially expected.
The banking problems nailed the Dollar to support at 101 as markets put an imminent reversal of a rate cut back on the agenda. Last week’s employment data and the Fed’s decision did not change market expectations meaningfully.
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However, tomorrow’s inflation data for April may do so. Reading well below 5% YoY would allow the Fed to talk more about outperforming inflation and stop raising rates. On the other hand, a sudden acceleration will lead to a pullback in the Dollar as the markets anticipate more rate hikes in June.
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#WaveAnalysis
#USDCHF reversed from key support level 0.8860
• Likely to rise to resistance level 0.8965
USDCHF currency pair recently reversed up from the key support level 0.8860 (which has been steadily reversing the pair from the middle of April).
The upward reversal from the support level 0.8860 follows the earlier upward reversal which created the daily Morning Star Doji.
Given the triple bullish divergence on the daily Stochastic, USDCHF can be expected to rise further toward the next resistance level 0.8965 (which stopped the earlier waves (iv) and (ii)).
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#USDCHF reversed from key support level 0.8860
• Likely to rise to resistance level 0.8965
USDCHF currency pair recently reversed up from the key support level 0.8860 (which has been steadily reversing the pair from the middle of April).
The upward reversal from the support level 0.8860 follows the earlier upward reversal which created the daily Morning Star Doji.
Given the triple bullish divergence on the daily Stochastic, USDCHF can be expected to rise further toward the next resistance level 0.8965 (which stopped the earlier waves (iv) and (ii)).
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#WaveAnalysis
#AUDCAD reversed from resistance level 0.9100
• Likely to fall to support level 0.9015
AUDCAD earlier reversed down from the pivotal resistance level 0.9100 (which has been repeatedly reversing the price from the start of April).
The downward reversal from the resistance level 0.9100 is the 4th consecutive downward reversal from this price level – signalling its strength.
Given the strength of the resistance level 0.9100, AUDCAD can be expected to fall further toward the next support level 0.9015 (yesterday’s low).
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#AUDCAD reversed from resistance level 0.9100
• Likely to fall to support level 0.9015
AUDCAD earlier reversed down from the pivotal resistance level 0.9100 (which has been repeatedly reversing the price from the start of April).
The downward reversal from the resistance level 0.9100 is the 4th consecutive downward reversal from this price level – signalling its strength.
Given the strength of the resistance level 0.9100, AUDCAD can be expected to fall further toward the next support level 0.9015 (yesterday’s low).
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